To Sell More, Answer These Questions

Many business owners fail to master basic sales concepts. Harvard Business School professor Howard Stevenson suggests ways to improve.

The biggest problem small businesses have is selling, says Howard Stevenson, a serial entrepreneur, professor emeritus of entrepreneurship at Harvard Business School, and the author or editor of 11 books on entrepreneurship. “A lot of people are afraid of selling. I’ve tried to convince schools that selling is important, but try to find a course on sales management in a major university. It’s a hole in everybody’s practical education,” Stevenson says. In his new book, Getting to Giving, Stevenson poses four questions that he thinks entrepreneurs should use to inform their sales strategy and improve it.

 
1. Why is your product or service important to your customers? It sounds simplistic, but too many small business people never determine why a potential client approaches them, Stevenson says. If they don’t fundamentally understand the customer’s needs, they can’t be effective in fulfilling them. And don’t be surprised if even the customer doesn’t know what they truly are, he says.
“This is where you stop talking and start listening,” Stevenson says. “Someone who goes to a money manager may want to get a multiple of capital; others want intergenerational transfer of wealth. One customer at a stationery store wants commodity copier paper and another wants colored tissue. If you’re trying to sell cars, does the customer want to do long-distance travel or get parking in Cambridge?”
Once the customer understands what she needs, the small business owner can show her how his product fills that need. “And if it doesn’t, don’t waste their time,” Stevenson says.
2. Is your company well-managed? In today’s economic climate, one of the perceived drawbacks of doing business with a smaller company is that the customer is not sure the business will be around in six months, Stevenson says. Larger brands often gain an advantage because they can assure customers of their longevity, while small businesses lose out because people don’t like to deal with incompetent organizations.
That’s why small business owners must manage their companies and their employees as well or better than their larger competitors. “Fundamentally, good management is an intense focus on the customer and on serving your customers at a profit,” Stevenson says. He feels that many businesses have fallen down on customer service because in the end, it derives from a positive affiliation between the employee and the company that has been lost in recent years.
“I don’t think people trust the companies they work for anymore, and it’s probably for pretty good reasons,” he says. “It’s not exactly inspiring to say that you get up in the morning to maximize shareholder wealth. Too many business owners are focused on cutting costs and making people work harder, rather than serving their customers and doing better that way.”
A recent experience at a local lighting store illustrates his point, Stevenson says. A store clerk assured him that a particular fixture was in stock and would ship immediately. But after 10 days passed and two of his phone calls were ignored, Stevenson finally reached the clerk, who sheepishly admitted that the items were not in stock after all. “Rather than owning up and telling me he was wrong and suggesting another option, he just said I would get my order in January,” Stevenson recalls. “What’s to stop me from going online and ordering the fixtures from LightingDirect?”
3. How does your company make a difference in the lives of your customers? Fundamentally, small businesses must create a sense of connection to their customers and instill a sense of urgency in them. One way larger businesses create urgency is by lowering prices. “With a situation like Black Friday, where you’re using price to create urgency, that’s the most costly way of doing it,” Stevenson says.
But while most small businesses cannot compete with large-volume companies on price, they can strive to provide the customer connection that is missing in big-company transactions. For instance, they can train sales staff to recognize customers and call them by name. They can suggest purchases based on customers’ values or sense of style. “Especially in tough times, if people are spending money, they want their spending to be meaningful in their lives or the lives of someone they love,” Stevenson says.
Smaller businesses can make all the difference to their clients if they go the extra mile to drop off a purchase at a busy client’s office or home; call regulars up to alert them that a new shipment has arrived; or offer to help select holiday cards or gifts, Stevenson says.
4. Is the experience of doing business with you enjoyable? “We’ve all been in stores and it was a miserable experience,” Stevenson says. “One reason Amazon (AMZN) has become as successful as it has is that they actually thought about the customer experience and devised processes like one-click ordering and customer suggestions.”
Small things that business owners overlook are often the things that matter most to customers, like getting a friendly greeting. Of course, having a salesperson who comes on too strong can annoy customers, Stevenson says, so small businesses must sometimes walk a fine line. “You can’t be a jerk and call customers every week, but there are ways to show the customer you care about them as a person, not just as an ATM machine,” he says.
The key to small business success is hiring good people and then treating them right, Stevenson says. “It’s not a zero-sum game between you and your employees or you and your customers. Particularly if your employees think they’re being maltreated, they’re not going to be enthusiastic advocates for your organization.”
If your company is well-managed, enjoyable to frequent, connected to its customers, and serving their needs, it should be aiming for maximum market share. “I always like to think that small business people should calculate what percent of the total market they can get. A local dry cleaner ought to aim for 100 percent of its customers’ dry cleaning business. A small corner grocery store may not get 100 percent of the total, but it could aim for 100 percent of its customers’ meat business by giving them a better experience on the meat buying than anyone else can give,” he says.

by Karen E. Klein