They are everywhere, literally. We are so used to them that we've become oblivious of their obvious presence around us. I am talking about Samples, Free Trials.
Recently, a young sales guy reminded me of the importance of these tools in the sales process. I went to a shopping mall with my wife, and even before we could enter any shop she spotted 'Cookieman' counter, right at the entrance of the mall. She looked at me, with her eyebrows arched "Don't think we are going to buy any of those butter cookies, I am just going to taste a few." I am not allowed to eat cholesterol rich food so I had to agree to her, but I decided to stay a little away from the shop to avoid that enticing smell of freshly baked cookies.
As she approached the counter, a young sales executive bowed her "what would you be looking maa’m? Let me help you with it," well, she was answerless but she managed "err... I am not sure, give me a moment". The young man bowed again and disappeared and then was back in a jiffy, he was holding a small plate, which had a single cookie on it, with both his hands but he stopped at a distance of 2 ft. from her "This is the very special coconut cookie which is prepared from fresh dough and coconut. The only thing which is more than an hour old in this cookie is the 20 yr old recipe," he said that in a single breath. His pleasant demeanor and the pride and care with which he was holding the cookie made me interested in observing this young professional. His smile was truthful and it seems he was enjoying treating his customer.
Then, with a lot of respect, he moved one step ahead and presented that cookie to my wife, "smell it before you eat it, the smell will last as long in your mind as would the taste in your mouth," he was quick to suggest. My wife was enjoying the royal treatment; she followed the instructions. It was funny to observe as this guy looked at her with his incessant smile as she savored the cookie. And then whoosh... he disappeared again.
Before she could finish the cookie, he was back with another one. "Try this one as well. This is our signature cookie, I am sure you are going to come back again to buy this one", he chuckled and surprised my wife with the new offering, but she didn't mind having another one. Meanwhile I got a phone call and my observation was hindered. By the time I finished my conversation, she was back; and what a surprise! She was carrying 2 boxes of cookies.
I was amused, “what happened?” She made a funny face and laughed, “This guy was so insisting that I couldn’t refuse.” I tried pulling her leg, “How can a young sales guy force such a seasoned sales pro into buying something she never intended to buy?” She smiled, “I don’t know… he never asked me to buy, he just kept on offering cookies with so much delight. And then he asked which ones to pack?”, she explained as she handed over the cookies to me, “he was enjoying his job so much and gave so much of respect to his products that I couldn’t refuse.”
I felt happy and sad. Happy - to see such young lads using samples so beautifully for making a sale. Sad – to observe how most of the sales guys have forgotten this art.
Indian Pharma Industry – Best example of Direct Sales; Worst for using Free Samples.
In my 2 years exposure to pharma industry, I’ve heard about many best practices and seen many of them actually being followed. However, some of the sales practices have been distorted beyond imagination and have lost their purpose; distributing free samples to doctors is one of them.
The concept of free samples in pharma industry came in the initial days of the industry when doctors were offered free samples for trying out the new products to their patients, record the improvements, side effects etc. and accordingly prescribe the medicine or give feedback to the company. However, with a passage of time the concept of samples have gone beyond the new products, sales guys have been asking for free samples of old products (even the best selling molecules also) and companies have been offering them because it definitely results in revenue increase.
However, this additional revenue [because of samples] comes through a different channel. These samples don’t go to all the doctors, they either go to doctors who are planning to organize a health camp, to oblige them and later on to request them for more prescriptions in lieu of this favour, or they are passed on to the dealers and never reach doctors.
The second channel [samples being given to dealers] is not only unethical but illegal also; these free samples [clearly marked as free samples and not for sale] are offered to dealers free of cost if they order a specific quantity of medicines [and thus generate a false temporary demand in the primary market]. The dealers in turn sell it to retail stores in interior markets for a price, who in turn charge money from gullible villagers for these free samples. This boost in sales is a false reflection of the potential of the product and the capabilities of the sales team.
What is astonishing if that from a medical rep to a national sales manager everybody is aware of this practice and nobody thinks even twice to exercise this option to meet their sales numbers.
Another set of medical representatives are those who don’t follow the above route but routinely pass on the free samples to their doctors on their every visit, so that they are able to ask for prescriptions rightfully. This practice had led doctors to believe that giving samples is a standard [read mindless] industry practice and we’ve simply helped them to forgot the real purpose. Doctors would use samples for their acquaintances, friends, relatives, or very poor patients etc. from whom they can’t/won’t charge any money for medicines. Over years, we’ve helped these Doctors lose respect for the samples and the valuable purpose behind them.
Online Industry: Free Trials – Fast loosing the purpose.
There are 3 reasons why I always compare pharma and online business [of jobsites]
a) I’ve worked in both the industries.
b) Both are one of the best examples of direct selling organizations.
c) Pharma is a mature market in India [and hence pharma selling practices are also in shape] where as online market is in infancy [with sales systems being defined, re-defined everyday]
When online products were introduced in Indian market, the easiest way to make an entry into a client was to offer them Free Trial of the products/services. If the client liked it, they’d buy; if they didn’t they’ll give feedback which was used to improve the products [quite similar to the underlying objective of offering free samples of medicine to doctors].
It used to work! And it worked very well for online businesses. And then came the real boom in online market and along came much more organized competition from abroad, PE investors [and all the pressures related to them for higher performance]. This resulted in high pressure on technology, operations and, of course, on sales systems. Sales guys, who at times get more innovative than the tech. and marketing teams, adapted themselves [and sales process] to handle this pressure, in the natural progression of mindless selling.
Clients were offered free trials as a value add with other products, so a wonderful sales pitch from a manager accompanying an executive would be “If you decide on product X right now at ABC price, I’ll be able to offer your 4 days of product Y along with it complimentary”, and he/she will come out of the meeting very proud, “See this works well with every client, now register the sale of product Y as a free trial for this client,” the manager tells the executive and seeds a malpractice into the mind of executive. If it worked, the executive is never going to forget it and probably this practice will trickle down into his/her team as this executive grows in the organization/industry.
We have much more mature sales people than the ‘Cookieman’ sales person and these are the mature sales people therefore they have started thinking that selling online products is much more complex than selling cookies. So they’ve gone innovative and devised ways to use their power to give trials as a tool to increase revenue. This [as explained in the pharma example] results in giving a false reflection of the true potential of product and/or capabilities of the sales team/system.
A more disturbing, and quite contrary, trend is those executives who don’t want to offer free trials to clients. They don’t want to offer a trial for 2 reasons [both equally worrisome] – first, it delays the sale; and second they don’t have confidence on their products. An offer to use a free trial comes as a last resort, when even after a no. of follow-ups the client isn’t ready to buy the product. Cut to the cookieman sales guy, I don't see the 'Cookieman' passion, pride, respect while offering the sample of one’s product in most of my team members.
Like the ‘Cookieman’ sales guy, a trial shall be offered to a client with a lot of ownership and pride, with a purpose of giving him an experience of the product/service and this should be done with a lot of pleasure. One must resist using trials/samples as alternative tools to increase revenues and avoid the thought that trials delay a sale. A wholehearted Trial/sample offering to the client in the very first meeting helps build up a long lasting relation and an obligation to purchase.
Ideally, the no. of trials being given in an industry should grow at a pace of not more than 5-7% year on year in any given industry [irrespective of the growth plans of the organizations]. With the industry maturing and the products being used by more and more clients, trials shall be replaced with client testimonials, which work better than trials. Such low growth in no. of trials also suggests sensible use of trials as a selling tool for acquiring new clients by generating a pleasing pre-sales experience.
The ownership of product(s) leads to a certain body language [of sales guys] which leaves a very lasting effect on the clients. I just hope that this write-up helps sensitize some of the sales people towards the larger purpose of offering free trials and help them use it with more discretion and pride.
Sunday, 19 August 2007
Saturday, 4 August 2007
Jobsites - The New Research Tool - II
It’s been quite sometime since I wrote my first blog on how Jobsites can become a potential research tool for various professionals including sales guys, HR managers, entrepreneurs etc.
At this point in time, however, I would only like to address how sales guys and entrepreneurs can use jobsites to research and improve on their revenue from certain clients/industries.
When I was a child my sister, while reading her science book, asked me a question “Tell me where would you find Potato seeds?” I replied with all my innocence “with the farmers.” My sister and my parents laughed at my answer. Today as I’ve gained more knowledge, I know that potato has no seeds in particular and pieces of potato are sown as potato seeds. However, in all these years the validity of my answer hasn’t changed. This incidence has been narrated to all my relatives, family friends and after a wholehearted laughter they all agreed to the simple logic behind my answer.
The point I want to highlight here is that the question asked was “where” and not “what”. When I think of making a sale I need a product/service to be sold and a customer to sell to. In this blog we would look in to ways to find an answer for ‘Where to sell?’ with the help of hidden information contained in Jobsites.
The rule is simple. Somebody who is hiring many, will also require many other services. An organization which is hiring resources in large no.s would also require infrastructural services, office furniture, hospitality services, transportation, work stations, computers/laptops, printers, vending machines and what not... You don't need to cold call clients to find out potential for your products. Just check if they are hiring!!!
Log on to a jobsite and look for jobs in your city. Every jobsite has a feature where you can see 'all the jobs from a company' on a single page.
If they are hiring sales people in good numbers then they would require raw material also in good quantities. They might be looking to give a boost to sales; maybe they'll consider some advertising/branding campaign as well - time for media/PR organizations to be on a alert; maybe they’d like somebody to generate sales leads for them.
If they are hiring production people in good numbers they might be looking forward to a capacity expansion/ putting up a new plant. One of my friends working in a petrochemical company in Punjab was able to find out that one of his client was setting up a new unit and therefore he struck a deal with them for their additional demand for diesel and lubricants, even before other competitors could get the news for expansion. How did he get the lead?
He was looking for a job for himself on a jobsite and he found that his client was looking for 2-3 senior production professionals. He researched and found a business opportunity.
But what if some organization is hiring HR professionals only? Well... it may indicate 2 things
a) That the organization’s present HR structure lacks a bandwidth
This makes a perfect opportunity for HR process outsourcing firms, recruitment consultancy firms etc. to pitch for their services
b) That the organization is planning a major expansion and they are putting in systems before they could launch full-scale.
Again a bright opportunity for the firms mentioned above and for everybody else who is interested in selling any product/services they might require to support this expansion.
In a nutshell, if there is something different, than the normal pattern of hiring, in the list of jobs that you see for a company then there has to be a good reason behind it. Research it... you'll be surprised by the results.
Apart from an Organization-wise view of the opportunities, you may do a market analysis and spot business/sales opportunities.
To explain this I would like to pick the example of the SAP professionals, discussed in my previous post on this topic, where the no. of jobs for SAP functional consultants have increased by 90% within 3 months. However, the no. of resumes added on the same jobsite has increased by less than 50%.
Now if I am a training organization, I have a clear indication to run specific courses for SAP and help the industry fill in this gap. If I am a headhunter at a recruitment firm I must start mapping all the organizations with SAP professionals and then start charging a premium from my clients for closing their positions in short time.
As a sales person working with a jobsite it is time for me to approach all my clients who have SAP based profiles and suggest them innovative solutions to overcome this demand-supply inequality. These are the situations which push most of the companies to think about branding themselves as preferred employers, when they are under tremendous pressure of attracting resources from a very limited talent pool.
In my opinion the ideal way to start a research on a jobsite is to verify the market/industry trends (from other sources) on a website by making necessary job searches and establishing that the trends are reflected/not reflected on the jobsites. If they are then a sales person should move to organizational level of searches where one finds out what kind of hiring a particular client organization is engaged in. An entrepreneur on the other hand should, after verifying the trends, should do more research on the jobs/hiring scenario in the allied industry/vertically integrated industry.
Hope this article is able to add another facet to the utility of website in your professional lives, apart from uploading your resume ;)
Cheers… Keep Selling !!!
-- DK
At this point in time, however, I would only like to address how sales guys and entrepreneurs can use jobsites to research and improve on their revenue from certain clients/industries.
When I was a child my sister, while reading her science book, asked me a question “Tell me where would you find Potato seeds?” I replied with all my innocence “with the farmers.” My sister and my parents laughed at my answer. Today as I’ve gained more knowledge, I know that potato has no seeds in particular and pieces of potato are sown as potato seeds. However, in all these years the validity of my answer hasn’t changed. This incidence has been narrated to all my relatives, family friends and after a wholehearted laughter they all agreed to the simple logic behind my answer.
The point I want to highlight here is that the question asked was “where” and not “what”. When I think of making a sale I need a product/service to be sold and a customer to sell to. In this blog we would look in to ways to find an answer for ‘Where to sell?’ with the help of hidden information contained in Jobsites.
The rule is simple. Somebody who is hiring many, will also require many other services. An organization which is hiring resources in large no.s would also require infrastructural services, office furniture, hospitality services, transportation, work stations, computers/laptops, printers, vending machines and what not... You don't need to cold call clients to find out potential for your products. Just check if they are hiring!!!
Log on to a jobsite and look for jobs in your city. Every jobsite has a feature where you can see 'all the jobs from a company' on a single page.
If they are hiring sales people in good numbers then they would require raw material also in good quantities. They might be looking to give a boost to sales; maybe they'll consider some advertising/branding campaign as well - time for media/PR organizations to be on a alert; maybe they’d like somebody to generate sales leads for them.
If they are hiring production people in good numbers they might be looking forward to a capacity expansion/ putting up a new plant. One of my friends working in a petrochemical company in Punjab was able to find out that one of his client was setting up a new unit and therefore he struck a deal with them for their additional demand for diesel and lubricants, even before other competitors could get the news for expansion. How did he get the lead?
He was looking for a job for himself on a jobsite and he found that his client was looking for 2-3 senior production professionals. He researched and found a business opportunity.
But what if some organization is hiring HR professionals only? Well... it may indicate 2 things
a) That the organization’s present HR structure lacks a bandwidth
This makes a perfect opportunity for HR process outsourcing firms, recruitment consultancy firms etc. to pitch for their services
b) That the organization is planning a major expansion and they are putting in systems before they could launch full-scale.
Again a bright opportunity for the firms mentioned above and for everybody else who is interested in selling any product/services they might require to support this expansion.
In a nutshell, if there is something different, than the normal pattern of hiring, in the list of jobs that you see for a company then there has to be a good reason behind it. Research it... you'll be surprised by the results.
Apart from an Organization-wise view of the opportunities, you may do a market analysis and spot business/sales opportunities.
To explain this I would like to pick the example of the SAP professionals, discussed in my previous post on this topic, where the no. of jobs for SAP functional consultants have increased by 90% within 3 months. However, the no. of resumes added on the same jobsite has increased by less than 50%.
Now if I am a training organization, I have a clear indication to run specific courses for SAP and help the industry fill in this gap. If I am a headhunter at a recruitment firm I must start mapping all the organizations with SAP professionals and then start charging a premium from my clients for closing their positions in short time.
As a sales person working with a jobsite it is time for me to approach all my clients who have SAP based profiles and suggest them innovative solutions to overcome this demand-supply inequality. These are the situations which push most of the companies to think about branding themselves as preferred employers, when they are under tremendous pressure of attracting resources from a very limited talent pool.
In my opinion the ideal way to start a research on a jobsite is to verify the market/industry trends (from other sources) on a website by making necessary job searches and establishing that the trends are reflected/not reflected on the jobsites. If they are then a sales person should move to organizational level of searches where one finds out what kind of hiring a particular client organization is engaged in. An entrepreneur on the other hand should, after verifying the trends, should do more research on the jobs/hiring scenario in the allied industry/vertically integrated industry.
Hope this article is able to add another facet to the utility of website in your professional lives, apart from uploading your resume ;)
Cheers… Keep Selling !!!
-- DK
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