Customer profiling is a no-brainer and is common knowledge. Salespeople, especially those that survive and thrive in the game are good at profiling the prospect to gauge fit and to assess needs.
A deep understanding of the prospect’s business, the challenges they face, their competitive environment, the advantages of their products or services, their unique value (and consequently selling) proposition. We as B2B sales professionals must know the customer. It is core to sales. It is mandatory to win deals over. The sales strategy, approach and go to market depends on this profiling. The sales messaging eventuates from it too.
While, many of us are adept at fact finding and profiling, we sometimes don’t consider the “mode” the customer is in. We don’t deliberate as much on the changing mode of their current operational reality. I am not throwing jargon that I picked up in business school. This is also not the consequence of some video on YouTube or a conference I attended. The mode in which the customer is operating their business is an extremely important facet to uncover, discuss and grapple with. So, what precisely do I mean by mode?
All for-profit organisations, and even non-commercial entities, have a mode that they operate in. This is the operational reality born from the strategy at that period.
I have seen for profit commercial organisations generally inhabit one of four operational modes: expansion, contraction, stasis and transformation.
These “modes” dictate almost every decision that is made by the organisation. It fortifies where they spend their time. It approves or declines the allocation of funds and resources. It makes new projects come to life and stops dead in tracks, other ones. It also dictates the pace at which decision making and tactics move.
When identifying your prospects, it is crucial that the matrix you use to score and evaluate them, includes a clear identification of their operational mode.
Over the last 20+ years, I have experienced success in selling to customers who were operating in expansion or contraction mode. Yes, you can sell to a client the is in contraction mode – they are reducing their business flow because they want to survive. More recently, transformation has been all the buzz and I have successfully sold to clients on transformation journeys too. They want to make change.
There is only one, of the four modes I speak of, that beams a warning signal to the enterprise sales professional: stasis. When customers are in a mode of stasis or inaction or apathy or “business-as-usual” you will find them the most resistant to sales messaging, and the least open to change.
But first, let’s explore each mode in just a tad more detail…
Expansion
In this mode an organisation is growing. They are making rapid changes to all or a few operating fundamentals such as hiring new staff, exploring physical expansion, strategising how best to leverage improved cash flow, increasing operating budgets, planning capex spending, breaching new vertical markets etc. This mode is typically brought about by a number of factors, including acquiring new market assets such as a competitor, or a new territory, the results of successful marketing campaigns that rapidly put pressure on production or delivery, capital injections from angel or commercial investors, a successful IPO public offering, etc. At this point boards and management teams are in a form of crisis control, as they grapple with scaffolding existing structures and protocols that can better absorb, manage and leverage the growth phase. As sales increase, customer enquiries and service requests increase, and the after-market nodes of the business begin to take pressure. Customers in this phase are seeking inputs, advice and expertise. In short, they are looking for help, and will be signalling their willingness through deep engagement with the sales literature, active outreach and responsiveness.
Contraction
Commercial business is designed, indeed invoked, to grow. Contraction or reduction in revenue streams, client numbers, share price, reputation or any combination of these will send both the board and management into a “state of emergency”. Any number of challenges, emergent events, global economic changes, natural disasters, social crisis, new competitors, failed product lines, fraud or simple investor sentiment can send a business into contraction mode. The hallmarks of this mode include declining market share, loss of cash flow, plummeting share prices, industrial action by staff, low levels of innovation and productivity, resignations, bad business press and declining investor confidence. As we know, however, ever crisis engenders opportunity, greatest of which is for the vaunted “leadership”. Whomever can step into the void, so to speak, and make the right tactical decisions, at the right time, may emerge from the crisis bearing that all too romantic of monikers: “leader”. This makes certain individuals within the management team ripe for products and services that they can assimilate into their portfolio of recommendations, with an eye on “saving the day”. Contraction modes entail quick reactions, fast decision-making and no small amount of risk taking. As such, enterprise sales professionals will find a willing ear, should they refine and massage their offering as a bespoke and tailored solution to the precise crisis facing their potential customer. Another thing to keep in mind about this mode: it’s not always obvious. Like the swan, serene above water, but paddling madly below, many companies can be handling a contraction phase, while also managing near genius-levels of reputation management. It’s at this point that the well-connected sales person should dig deeper; finding data and contacts that can give a clear-eyed view of the company’s true operational mode.
Transformation
This term, “transformation”, has been used to a point where most in business either live by it or are sick of the term itself. Regardless of where you stand on the transformation love-hate continuum, this mode describes a company that is focussed on developing. The transformation might be associated with growth or contraction. It might even be associated with maintaining an effective and efficient stasis. Here though, it is the transformation initiative itself that drives the opportunity. While growth may not be a specific target for the leadership, they are nonetheless keenly attending to either the factors affecting that growth, or consciously diverting resources elsewhere for the interim. Their objective remains avoiding contraction. In this mode growth may be hampered by external factors which could include the legislative terrain or negative market conditions or internal factors such as a focus on R&D or the development of a new market. So, while growth may not be reflected in revenue or market share, there is certainly a high level of activity and decision-making directed at addressing conditions related to growth. Transformation of this kind is a healthy state for companies who are aware of, and responding to, disruption in their sector and are managing to keep up with changing customer demands.
Stasis
This is an operational mode marked by inactivity within its holding environment, a mode that denotes neither expansion and its attendant high-calibre activity, nor contraction and its characteristic panic. Of course the company remains active, on a day-to-day basis, but in this mode the powerbases within the organisational architecture are uncontested, the economic and market environment enables targets to be met, investors are quiet or satisfied, market share is “as predicted”, and change is made in bare-minimum quotients with pressure on profit centres as well as operations decidedly lacking. What’s interesting about this organisational mode is that it is very seldom a true reflection of what is really going on – somewhere behind the veneer of inaction, lies a crisis waiting to strike. However, due to an almost toxic level of comfort within the ranks of management and decision makers, a collective and subconscious agreement to maintain an even keel tends towards inaction. Stasis is a dangerous mode for companies, but also a death knell for the well-directed, carefully packaged sales intervention. The ambitious enterprise sales professional is well-advised to avoid engagement, until the crisis hits. Which it will. But for now, this prospect is for all intents and purposes dead in the water. Stasis means suspension, sameness or immobility and these types of organisations are the least of all four to respond positively to sales interventions.
Organisations that are operating in expansion, contraction or transformation modes are relatively easy to sell to, compared to those operating in stasis mode. When an organisation is in stasis mode, executives generally don’t take on the pain or the risk associated with change. They focus on keeping business, ‘as usual’. They salesperson, in this case must provide a very convincing business justification to bring the opportunity to life. The other factor that can help move the dial when an organisation is cruising in ‘stasis’ is a senior executive’s decree to drive a particular initiative. If you, as a sales professional are unable to compel, or if a business leader does not lead the charge on an initiative, the chances of selling to a prospect that is in stasis, is very low.
Sales leaders and professionals have a finite amount of resources: time and money. As such evaluating your prospects and exposing them to a degree of rigorous judgement will enable you to correctly prioritise the companies that are in an operation mode most likely to yield sales results.
If you are a business or sales leader and would like to discuss customer operating modes and how best to navigate your sales play, please call me on 0412 517 237 or drop me an email on rk@resonate.com.au. I am very passionate about B2B Sales and B2B Marketing. Let’s catch up for a coffee or a tea and lets have a great conversation about your business.
