Monday, April 26, 2010

Firms typically use customer success stories as collateral, working hard to place them in the hands of buyers at just the right moment in the sales cycle.

A little noticed, and quite possibly even more effective approach to leveraging success stories may be to place them, suitably modified, into the hands of sales people as training tools. Common sense, and some long forgotten research, suggests these can have a much more direct and powerful impact on close rates. Here's why.

First, a quick course in creating an overnight sales sensation

In one of the classic experiments on sales effectiveness, the Huthwaite organization worked with a medical products company years ago on the launch of a new device. Obviously, none of its sales people had any experience selling it to buyers yet. So they depended on the firm's marketing collateral to understand the new device. When Huthwaite researchers realized that the collateral focused on the new device's features rather than buyers' needs and solution benefits, they decided to furnish some proper collateral themselves.

In particular, Huthwaite took a small group of the firm's sales people, told them to ignore the product's features, and provided them with a list of specific customer problems and needs which the new product would solve. Using that information, Huthwaite also had the sales people make up a list of customers who might have those or similar needs, and a list of questions that would help them probe to uncover them and their business implications—which are typical steps by sales people trained in consultative selling.

Result: the Huthwaite group achieved a 54 percent higher level of sales than the rest of the sales force during the first year of the product's launch. So much for the need for lengthy experience with a solution to sell it properly.

Success stories are the best resource for creating overnight sales sensations

Take a second look at the collateral created by the Huthwaite researchers: it focused away from features and toward  customer problems and how the device is solving them. That's the spec for a proper success story. Indeed, a well run customer reference program, with its access to customers, can easily probe for additional information useful to sales people, such as questions they might use to probe prospects for similar needs.

Success stories can have a tremendous impact on revenues

Suppose that, for an important offering your firm is selling, 30% of your sales lack the knowledge they need to properly sell it. That figure could be conservative, depending on the newness of the solution, churn in the sales force, lack of adequate or timely training, and so forth. 

If providing success story training materials to the less knowledgeable sales people is even half as successful as the Huthwaite's experiment, then you've still increased revenues for the solution by about eight parent in the first year. Do the math, and for a good sized firm hoping to sell $10 million or more of the new solution, you're achieving an impact in the millions of dollars by deploying easily modified versions of your success story into a new use.