Developing Your Business Acumen: What it is and How to Develop it.
Those who know me know that core my to values and sales methodology is that sales people must have business acumen. More specifically, a sales professional’s ability to demonstrate business acumen is a critical success factor to selling in today’s marketplace. Strong business acumen helps sales professionals understand a prospect's pushbacks, put those objections in greater context, and help mpove the deal forward.
One of the biggest challenges I face as a trainer, however, is getting sales professionals--and often times sales managers--to understand & commit to this. To a certain degree I can understand why. At a high level, business acumen can been seen as a bit abstract and at a granular level it can become overwhelming.
I often hear:
- “What exactly is business acumen?”
- “I never studied business in school.”
- "I just want to make sales calls."
- "How is this information or business acumen going to help me make placements?"
- "I don't understand business concepts and financial terms"
I went to Michigan State University and studied Criminal Justice and Pre-Law. All my friends were in the business school. I had zero interest in business and coming out of college I couldn't have told you the first thing about profit margin, balance sheets. or risk mitigation.
Then I took a job selling IT consulting services. My first employer had a subscription to Hoovers and OneSource. I was told to use those tools so that I could assemble key account data-balance sheets, working capital, customer satisfaction rates, market share, credit rating, yada yada, yada-to make an effective sales call or presentation.
But, like many sales professionals I work with today, I was a fish out of water. None of that information helped me. It only made matters worse. It totally confused me and made me lose focus. Even if I took a class or read a book to understand all of the definitions, how was I going to translate that into my sales conversations with prospects? I wasn't and I didn't.
This is Business Acumen, and If I Can Do It, Anyone Can Do It
Fast forward a few years and hundreds of meetings with IT and business executives and I discovered that business acumen is not about simply knowing these terms or definitions. Business acumen is about understanding how all of the different departments in a company rely on one another in order to produce their product or service. Business acumen is the understanding of how these different teams and departments are interconnected and reliant on each other. It’s about understanding the cause and effect between each department.
Business Acumen - A Story:
For example, when the server that hosts the e commerce web site crashes, shopping carts get abandoned and sales are lost. Order fill rates go down and the customer service department gets flooded with calls from angry customers. As a result the sales team is not happy because they're orders don't get filled. The VP of sales has to have a talk with the IT team about why the server crashed and when it will be fixed. Emotions run high, relationships get strained. Subsequently the cost of sales goes up. Customer loyalty and retention suffers. Investors and/or analysts on wall-street are not happy because they missed their sales forecast. The CFO has to field calls from those angry investors and analysts. As a result the company loses market share and their stock price drops.
While this example is extreme, this is a real world example that happens to companies.
Being able to recognize and understand this is business acumen. Recognizing when something positive or negative (trigger event) happens within an organization and understanding who (or what departments) will be impacted and how they will be impacted is business acumen. It’s this ability to connect the dots or to see and recognize the “chain reaction” of these events.
Here’s the kicker. Corporate decision makers, executives and especially IT decision makers are constantly taking on new initiatives to apply metrics, processes and standards--let's call them critical success factors--to improve the overall performance of their department or business. When corporate decision makers make the decision to change or "re-engineer" a process and it has a positive effect on the business- there is inherit value. Keep reading……
How Business Acument Helps You Close Deals - Why It's Important
If you don’t have business acumen (can’t recognize the “chain of events” and interconnectedness of departments), you can’t recognize or understand what your customer values and why. Take the example from above:
- If you fail to uncover and understand the downstream effect of how rebuilding the server delivers value for not only the VP of Sales but the customer service team and the CFO, you can’t sell business value.
- Not only that, you will never understand your customer and what is important them. This is leaves you in a horrible position. You’re stuck with selling exclusively on price. Not good.
- But if you can begin to build your business acumen and understand this “chain reaction” of events within your accounts, you will transition from “rookie sales rep” to “sales professional.” Why?
- Because now you can actually participate in the conversation you really want to be a part of: the conversation where you diagnose the problem with the client and offer ideas and co-create a solution with your client. But without business acumen, you’re just an order taker fulfilling a pre-defined need.
The last reason why developing business acumen is so important--and this is probably most important of all--is that more important than you understanding your customer’s business is that you make your client feel understood. Customers want to do business with sales professionals who understand their business. Customers want to feel understood. How can you make your customer feel understood if you don’t understand business acumen and what they value and why?
How to Develop Your Business Acumen
It starts with asking your customer’s well thought out questions.
- You might start off by asking them what goals they’re trying to achieve for the quarter.
- When they mention to you that they are having a problem or issue with “X” ask them “why do you think that problem is happening?”
- After their response you may reply with another question such as “how is this problem impacting your business?” Or “what departments are being impacted by this problem?”
By asking some simple probing questions you can develop business acumen and gain great insight to how your customer thinks and what they value. From here you can get into some additional questions such as “What have you done so far to try to fix this problem?” And “why is fixing this problem so important to you?”
Possessing business acumen in today’s marketplace is a must have skill set for selling any product or service to corporate America. You can start to develop your business acumen by asking these questions on your next sales call.
As mentioned in this article, business acumen is going to help you sell better. When your prospect starts pushing back (this will take too long, it costs too much, I don't have time for this right now, etc.), business acumen will help you understand the larger picture, and give a response that shows that you understand what they are concerned about, and show how you can help.
If you're looking for more specifics, we wrote a playbook on overcoming sales objections. There are 20+ common objections in this playbook. For each objection, we give you a statement to make that signifies that you understand their problem, and then a rebuttal for moving past the objection. Click the banner below to download!
About Dan Fisher
Dan Fisher is founder and owner of Menemsha Group, a provider of sales enablement solutions dedicated to helping IT staffing firms improve win rates, shorten their sales cycle, and increase revenue per sales rep. Since launching Menemsha Group in 2008, Dan has consulted with over 200 IT staffing firms and has invested over 5000 hours coaching IT staffing sales reps. He’s authored is his own proprietary sales methodology and has previously spoken at Staffing World, TechServe Alliance and Bullhorn Live 2012. Prior to launching Menemsha Group, Dan spent 16 years in the IT industry running local, regional and national sales teams. Dan worked for Kelly Services, Oracle Corporation and Alliance Consulting. Dan currently resides in Boston, Ma.