There are three major ways that a company can increase profits or earnings: (1) increase revenues (sell more), (2) reduce costs (spend less), and(3) better utilize company assets (do more with less). Everything else they do, and every other financial measure they track relates back to these three objectives, to the profits these three contribute to, and to the equity and cash flow that results. Shows the cause-and- effect relationship between these high-level elements of value.
Most companies establish goals and objectives in each of these three areas. Read just about any Annual Report or Form 10-K and you’ll see reference to your prospect’s goals and objectives in the areas of selling more, spending less, and doing more with less. However, they never describe them quite that succinctly. It sounds a lot more impressive when you use fancy business jargon to describe strategic goals. Here are some examples of what you might read:
‘Our objective is to expand our brand equity and global reach to maximize growth opportunities in emerging markets and further penetrate existing strongholds in domestic markets in which we maintain competitive advantage [i.e., they're going to sell more].’
‘In order to maximize our profitability, we are constantly looking for new ways to reduce costs and expenses. Our commitment to continuous improvement focuses on maximizing workforce efficiencies while driving waste and errors from every facet of business operations [i.e., they're going to spend less].’
‘We continue to leverage our core competencies for maximum results. Through our dual strategy of organic growth and selected mergers and acquisitions, we continue to streamline operations and divest of business segments and infrastructure which no longer fit the core focus of our strategic business plan [i.e., they're going to do more with less].’
However your customer chooses to express it, every company is constantly focused on the goals of increasing revenue, reducing costs, and better utilizing assets. In order for us to be successful selling business results (the achievement of these goals), we must learn to ‘Tie our functional capabilities (the things that our products and services do) to the achievement of our client’s goals.’
The problem with the sales approach of some technology companies, for example, is that when their salespeople engage a prospective customer, they talk about technology. Or when a professional services firm engages a potential new client, they talk about professional services. We have to break this pattern of behavior. As sales professionals, we need to quit talking about technology, or professional services, or whatever it is that we sell, and start talking about how those things will help our customers increase revenue, reduce costs, and better utilize assets. It’s the difference between selling technology solutions as opposed to selling business solutions.
It is relatively safe to assume that every business wants to sell more, spend less, and do more with less. I’ve never seen a company that didn’t. But we should try to learn the terms they use to describe these goals, because terms can vary widely, especially across industries. We want to learn to talk about our customer’s business in their vernacular, using their specific lingo.
Take a minute to reread the ‘Business’ section of your target account’s 10-K report. How do they express their desire to increase revenue and sell more? What words and phrases do they use to describe their plans to reduce costs and spend less? Do they talk at all about any initiatives to better utilize their assets and do more with less? Some companies are more forthcoming with their business objectives than others. I have seen some that provide only a vague description of their business plans in their Annual Report or 10-K, and others that not only lay out their goals, complete with target numbers and metrics, but also the strategies they intend to employ to achieve them.