Strategic Stuff

What does commercial excellence have to do with, say Architects and Architecture?

By August 28, 2018 No Comments

Commercial excellence is understanding that when you, independently of the size of your business, or what product or service you sell, should be aiming to dominate a market segment, creating an unfair advantage towards your competitors, and maybe even redefining your niche or category.

Commercial excellence is the series of practices, ideas, models, even beliefs that lead you to grow your business, get customers, get more from your customers, increase revenue, all at the same time delivering amazing value and helping them succeed.

The contents of this post apply to many small businesses, including startups. I chose to go along with the Architecture example, partly because I love architecture, and respect this profession a lot and partly because, I’ve been in touch with Architects lately, related to a “business readiness” research project I’m currently conducting.

The Challenge

Along the years I’ve spoken with many entrepreneurs, small business owners, and startup founders. When it comes to selling, selling better, selling more, selling faster, etc., these are the things that I found in common that keep small businesses startups, and independent professionals from a healthy growth path:

1. They “don’t go out of the building” I like this expression, it means that when it comes to decision making, many people tend to process things internally a bit too much, as opposed to going out, asking, researching, benchmarking and finding information and data to make a better quality (or at least a better informed decision). Unfortunately, creativity and being smart, do not equate to having the right information.

Take action

Reaching out for tools, information and expertise can go a long way in accelerating success, and decreasing the chance of failure. Most successful people have data, information and different approaches to try in different situations. 

2. Related to the previous one, very few received formally or informally the “education necessary” to succeed in business. I’m not referring only to sales training, but customer success, how to make a case with ROI, sales forecasting, pipeline management, how discover customer needs, personal finance… not to mention business communication, marketing, social media, presenting… The glitch is not there, but in the fact that explicitly or not, they define themselves as architects (or engineers, lawyers, consultants etc.), or as a team of experts, but not necessarily as entrepreneurs, not as business people, much less as sales-people (yeech!).

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Besides… the more customers you have, the more people are touched by your amazing products or services.

3. Based on their results, they are aware that selling and closing a deal is sort of a process, but can’t hardly articulate what phases, in what order, or what should be the outcome of each. Selling and producing results becomes a series or random events that sometimes result on a project.

Take action.

Sales is a process, and can be managed. Research and try different templates to create your own. This is serious stuff, you would not engage in an architecture project without having a process in place and understanding the stages therein.

4. Related to the previous one, some business owners don’t dare to set ambitious growth goals, how could you when the uncertainty is so big? Hence goal setting is based more on past performance, than on the potential they have. In practice this approach results in moderate, reasonable, low risk/achievable, and in many occasions de-motivating goals on one hand, and is never enough to create substantial advantage towards competition. 

Take action.

If you think it is impossible to grow, say, 100% per year, what you are saying is, it is impossible with your current set up and skills. I think in this context “entrepreneurship” is creating the conditions to make it happen. But what then if you miss those goals? Let me tell you, nothing happens.

5. They heavily rely on reference selling, that is, selling to contacts and existing network, and that is good right? However they don’t always understand the mechanics, and the science behind expanding a network, what types of networks there are (from the business perspective), or how to create a ripple effect through the nodes to create massive growth.

Take action.

Sooner or later you will have to be in the position of pitching people that don’t know and don’t care about you, your company and your services. There are gazillion articles on pitching, presenting, selling on the phone, sending engaging emails. Learning “to sell” is the one skill that will open more doors for you than anything else.

6. Based on their results, they have one main approach when dealing with customers, and this is based more on assumptions than thoroughly testing, getting feedback and adjusting. Since not all customers are created equal, and customer interactions and their context variate, a single approach delivers limited results.

Take action.

Engaging on the exercise of defining your “buyer personas”, and customer segments is an amazing learning that will provide clarity on what they want, and how. A must.

7. They are not skilled negotiators. In (very) general terms this means that they tend to take positions too quickly, and too often, and/or they struggle changing position or perspective during a negotiation. This hinders or blocks the communication before they can influence decisions. Unskilled negotiators also tend to think that the responsibility of “getting it” or understanding relies on the other party, rather than in their communication.

Take action

Being a good negotiator is not about being smart. Is more about understanding the mechanics, the stages, and practicing a lot. Easy step you can take. Get yourself 3 books and subscribe to 3 blogs about negotiation. This is also stopping looking for inspiration in what you know.

8. They believe that if they had branding, “a name” and could advertise everywhere they would succeed. This is only partially true. Actually is about 30% true at the most. Wait what? First hand experience: most powerful brands in the world know that 30% (max) of their income comes easily and with “no questions asked”.  It also means that the most powerful brands in the world have to fight for and defend the other 70% of their income, as any one of us.

Take action. 

Build a brand with consistent, smart and agile effort. Be everywhere. Don’t sign up customers but create promoters of your company, your brand and your team. Make a lot of noise about it!

9. They struggle to understand what is the real value that the customer is getting, many even get self-conscious on the value of their offer, sadly giving up in price and margins. Although this is the right thing to do in some specific contexts, it should not be a standard practice.

Take action.

Take the time to create a survey and interview your present or past (the ones that never came back), learn what went well or not.

10. They are all really experts in the characteristics, quality and features of their product or service, but struggle when articulating how their solution actually solves customer’s problems. The classic example for this is a mechanical engineer who knows every piece, specification, every function of a car, but can this person actually engage and sell a car to the average user?

Take action.

How does that function, that piece, that feature make life easier for your average buyer? Buyers are not engineers, are just average people. If you like statistics, less than 20% of people who buy computers truly understand, and care about technical specs as a buying decision factor.

11. Related to the previous one: Their “value proposition” (or why customers buy from them) relies heavily on the technical aspects of their product or service. This again is performing based on assumptions. We all tend to think that what is important for us, will be so for other people, which is not always the case.

Take action.

The process of translating technical features and turning them into user “scenarios” and solutions, is the process of creating a formal value proposition. There are great tools for this, like the Value Proposition Canvas or the Lean Canvas. 

12. Sooner or later they hit a “roof” in their growth path, and they stay there. From the business perspective, a business that is not expanding in healthy cycles is stagnating. This is also why they tend to do good when the market is good, or bad (in different degrees) when the market is bad. Related to architecture, data (ACE)  says that in the last 6 years or after the financial crisis of 2008, 20% of independent architects have chosen to join larger firms, and only 10% of their revenue comes from newly acquired customers.

Take action.

Without  professionalizing your “sales machine” you can hardly expect a different outcome. A starting point I’ve recommended in the past is: grab 20 job descriptions for Sales Manager or Sales Director Jobs, spot the trends, incorporate things in your own job description.

13. When experiencing growth, they tend to hire people with a similar profile, mindset and set of values than theirs (it sounds logic, right?) The glitch is that that does not incorporate new capabilities, new ways of thinking, and is based on an idea of linear growth, a risky idea/strategy in the era of hyper-changes where playing “safe” is turning out to be riskier than before… From the business perspective, this is related to risk aversion, and the opposite of embracing diversity. To put things in perspective (sadly) this is an extended practice in corporate too.

Take action.

When hiring, think in terms of incorporating capabilities currently missing, and that will facilitate growth, not only in bringing more of what you like and have. Click To Tweet It also helps acquiring yourself the skills to make you an outstanding interviewer and understanding the balance between experience and potential of growth.

14. This is a counter-intuitive one:  When they actually get to the point of hiring sales people, they tend to sell better than them. Why? Because they are passionate and committed, and that sells, because they’re experts, and that helps. But also because they don’t have the competencies to hire, develop and lead a champion (in practical terms they struggle transferring that passion and expertise to a new hire, statistically making it not to work often.

Take action.

Success of your new hires is a shared responsibility – theirs and yours. The swim or sink approach is way too old school, and there is a full discipline and science called Sales Management .

Conclusions

Growing a business is about understanding what competencies are needed to succeed, and  incorporating those competencies, either by learning them, hiring people who has them, subcontracting them, and getting the tools and technology to deliver on them.

Above all, growing a business is a steep learning curve, and entails embracing challenges, testing ideas on a continued basis, and failing fast and reacting to change, hopefully before the competition.

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