Sales Management That Works: How to Sell in a World That Never Stops Changing, by Frank Cespedes
I learned a lot about marketing and sales from this book, but that’s primarily because I was ignorant about these topics. For me, it was a good introduction to sales and marketing and the considerations that need be made in these areas. At times, I lost track of the acronyms that Frank used; I think that a table inside the front cover with all of the acronyms would have been helpful. There were not many concrete recommendations about how to improve sales; instead, the author provided questions that sales teams should consider, and he also provided some examples of sales and marketing models in other companies. If you are a sales manager or sales person, and you are interested in improving your performance, then I think that this book is a good book for you. For me, the questions and considerations posed in this book were not directly applicable, but they were a good introduction to the world of sales. I enjoy learning about new topics, and “Sales Management that Works” was something new for me.
Some things that I learned
As an ignorant engineer, I was introduced to many new terms, including some basic acronyms, such as B2B (Business to Business), B2C (Business to Customer), Return on Assets (ROA), and SaaS (Software as a Service). As I mentioned above, it would have been helpful to have a list of acronyms in the front of the book.
One of the big themes in this book was that technology does not sell itself. I agree. There are many great scientists and engineers in this world that create some really great tools and technologies. However, without the ability to sell, these technologies go unnoticed. Technology, even great technology does not sell itself. To seize sales opportunities, great technologies need great leadership and customer-management. Leadership and customer-management sells.
In today’s market, there is evidence that customers are becoming less attracted to ads. Instead, many buyers are using blogs, emails and white papers as sources of information. The marketing teams need to recognize these changes in customer preferences and market accordingly – for example, move marketing dollars from ads to the development of blog posts.
Obviously, the easiest way to improve margins is to increase price. It might seem like the price of a product is determined by using some advanced market study or complex algorithm. In reality, price is often set arbitrarily, and it is very difficult to conduct a market study that isolates price. One example of a price study was completed by Jason Fried and his company, Basecamp LLC. They experimented with arbitrarily adjusting the price of onboarding new buyers and measuring how customers reacted and whether the customers chose to upgrade the Basecamp product or not. Basecamp also conducted a price survey to determine the optimal price point. Although I think that price surveys are a great idea in practice, I am skeptical of their utility, since the response rate of surveys is typically only 2-3%.
I thought it was interesting that price fluctuates with demand. For example, the price that one person paid for an airplane seat differs from the price that the person in the neighboring seat paid. I also found it interesting to learn about the different types of pricing models. For example, Costco loses money in its supermarket retail business but more than makes up for this loss with membership fees. Platforms like e-readers, video game consoles, and printers will sell the initial product for little or not profit, but will make up for this lost profit with the sales of books, video games, and ink cartridges. It is important to know the value of your product so that you can maximize profit while simultaneously providing value to the buyer.
Something that I noticed is that the charts in this book are simple and black and white, just like the charts describes in the “McKinsey Way.” Is this a coincidence? I don’t think so. One of the charts that I particularly liked described generic options for growing a business (Figure 3-1):
Enhance the core product by leveraging what you already do with existing products in existing markets
Sell to the same market with new sets of products, features, and add-ons
Expand into new markets with the same products
Develop new products and sell to a new market
(1) Enhance the core product
(2) Expand your set of products
(3) Expand into new markets with the same product
(4) Develop new products and sell to a new market