ADVERTISEMENT

Why waste time with your Corporate Background?

March 2006 Selling

The time that salespeople spend with prospects is a valuable and precious commodity. Who wants to waste it with a corporate backgrounder?

Really, on the priority list of things to communicate during a prospect interaction, the corporate background is pretty low. Many salespeople would rather spend their time discussing the features and benefits of the products and services that they deliver. Better salespeople would rather spend their time discussing the value that they deliver to their clients. Even better salespeople want to uncover the challenges facing the prospect and reveal their solutions to the prospect’s challenges. And every salesperson needs to ensure that they uncover all other parties that will contribute to the decision and cover their bases throughout the organization.

Given these options, why would we want to spend time discussing the corporate background? The corporate background seems like a pretty low priority compared to uncovering key pieces of information and communicating the key selling points. Shouldn’t we just skip it?

Woops! A trap lies there. By skipping over the corporate background discussion and making a beeline to the endgame, salespeople are missing a valuable opportunity for laying the foundation to trust.

You deserve their trust, now let them know

The corporate backgrounder is necessary dimension of prospect meetings because of its ability to support the legitimacy of the claims that will be made during the sales process.

When salespeople fail to address the issue of corporate background, they leave open the opportunity for others, including your competitors, to sow the seeds of Fear, Uncertainty, and Doubt, or FUD. FUD routinely kills or slows the sales process. (1,2)

Even if the sale goes through, FUD can reduce the price. People purchase based upon their perception of value. Also, people discount their perception of value based upon uncertainty.(3) Therefore, FUD lowers prospects’ willingness-to-pay.

Unlike saying the words “trust us”, which often raises more distrust than the phrase was intended to mean, the corporate backgrounder provides evidence that people trust your company. It demonstrates that the company has earned the privilege of deserving trust, and it implies that the prospect should trust the company to solve their problems and leave them better-off by engaging the relationship.

Earn their trust with Evidence

For the corporate backgrounder to be effective in laying the foundation of legitimacy for the claims that will be made during the sales process, it needs to include evidence. Evidence that trust is warranted must demonstrate competency, demonstrate that others are placing trust within the company, and demonstrate that the company is committed to serving customers like the prospect that sits before them.

Potential sources of evidence include:

  • Customer testimonials
  • Client success stories
  • Analyst statements
  • Press stories
  • Market share numbers
  • Revenue growth history
  • Length of industry experience

For new companies or companies that are entering into a new market or product offering, the above sources of evidence to support trust may not be available. In these cases, the corporate backgrounder can communicate that trust is warranted by demonstrating that the company is structurally sound, financially solvent, and market committed.

Evidence for new companies may include:

  • Investor strength
  • Executive team strength
  • History of the solution development effort

In each of these cases, well known investors, managers, or technical development resources will lend credibility to the message that the company deserves the prospect’s trust. This might mean mentioning the name of few superstars or nationally recognized development lab.

Use Judiciously

No one is suggesting that the entire sales meeting be consumed by discussing the corporate background, but it is suggested that executives spend a few moments communicating the evidence that trust is warranted. Corporate backgrounders contain this necessary evidence. Even captured clients can benefit by being reminded of the value that you have delivered to them and the value they are gaining from investing in a relationship with you.

Whether you do it in the first 3 slides, or in the first 5 minutes of conversation, prospects need to know where the company is coming from before they can engage the company to take them to the solution to their challenges.

_______

References

(1) P Doyle and J. Saunders, “Measuring the True Profitability of Sales Promotions”, J. Operational Research Society, (1986)Vol. 37, No. 10, p 955.
(2) T Smith, “FUD – Use with Care”, Wiglaf Journal, 15 April 2005. Web http://www.wiglafjournal.com/Articles/2005/04-15-FUD.htm
(3) D. Kanhneman and A. Tversky, “Prospect Theory: An Analysis of Decision Under Risk”, Econometrica, (1979) Vol. 47 No. 2, p 263.



About the author

Tim J. Smith, PhD is the Managing Principal of Wiglaf Pricing, and an Adjunct Professor at DePaul University of Marketing and Economics. His most recent book is Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures.

Tim J. Smith, PhD
More by Tim J. Smith, PhD