Business Acumen, the What, Why and How for Salespeople
What sets top performing sellers apart from average sellers? Why are some salespeople more effective at closing deals or building customer loyalty over others? And how do some reps rocket-launch their career trajectory? Business acumen. Business acumen is a term often associated with leadership and thrown around boardrooms. But business acumen is also a key component to excelling new business development.
In this post, business acumen, the what, why and how for salespeople, I'm going to share with you what business acumen is, why it is important for salespeople to possess and business acumen, and how sales professionals can develop their business acumen.
What is Business Acumen?
Business acumen is the ability of an individual to review or study a business, regardless of industry, and recognize the interdependence between all of the different business systems, business processes and different departments. Business acumen is the ability to recognize how a problem with one system or process or in one department will impact other systems, processes or departments. Business acumen is the ability to recognize the cause and effect relationship of interdependence.
Take football for example. Football is a game of high interdependence because if one player is off, say an offensive lineman, the entire play breaks down and results unfavorably. A business including the processes and systems and the people that run and mange the business are even more interdependent than sports teams. For example, what happens in a business when production delays occur and shipping dates to customers are missed? Customer service gets lots of calls from unhappy customers, revenue targets are missed, morale and profits may fall, market share starts to dip. In other words, many people in many functions of the business are impacted. Generally, the "pains" or business issues at one level become reasons for another "pain" at another level level and in other departments.
Your level of business acumen including your understanding of your customer’s interdependence and business "pain" and the impact that pain has throughout their organization is what will differentiate you from your competition. Your ability to cultivate a sales strategy in which you can confirm with your customer their business pain including how that pain flows through their organization including the people and departments it impacts demonstrates your understanding of their business environment. This is business acumen.
Why Business Acumen is Important in Conducting New Business Development
To be successful in professional sales, sellers must learn to position themselves as an authoritative thought leader and equal partner. Selling and new business development is about the seller's ability to create demand for him or herself compelling the customer to consider a solution to a problem that was never on their agenda or under consideration in the first place. Sellers must possess business acumen to perform at this level.
Take Starbucks for example. The coffee shop which now inhabits every street corner did not always sell fresh-brewed coffee to customers. They started off in 1971 selling espresso makers and coffee beans, which Howard Schultz who is the current chairman, president and CEO, fell in love with on first taste. However, after his visit to Italy in 1983, Schultz was determined to actually brew and sell Starbucks coffee in a European-style coffeehouse, and transformed Starbucks into the nationwide java sensation it has become today. When Starbucks made this pivot though they didn’t just go into the coffee brewing business, they went into the retail industry. They went out and started leasing and eventually buying commercial real estate property. But leasing and buying property wasn’t enough. They had to launch a number of other initiatives in order to make this transformation. For instance, they had to invest in a CRM and loyalty management system to gain customer loyalty and get consumers to come back, repeatedly. They also had to implement supply chain management systems to manage the materials from their suppliers that goes into their products. Another major IT initiative they had to take on was investing in POS or point of sale systems that would go inside each and every Starbucks coffee house to process payments. And a nationwide and eventually a global network had to be built out for all of those point of sales systems to run on across the globe.
If you were a sales rep trying to sell software and/or IT services to Starbucks but possessed little or no business acumen, you probably wouldn't have sold anything to Starbucks. But if you did possess business acumen than you likely would have sold millions-of-dollars in business with Starbucks.
Here is Why Possessing Business Acumen is Important
You don’t need to to get bogged down in understanding every detail, but you do need to understand the basics of the business planning process including:
- Companies assess their strengths, weaknesses, opportunities and threats (SWOT Analysis) to help them determine their current state at which point they…..
- Define their desired future state including their goals and objectives at which point they….
- Identify the gaps or disparity that they must overcome in order to arrive at their desired future state at which point they…..
- Determine the strategy or strategies they will implement to achieve those goals at which point they…...
- Determine which key initiatives and projects they must undertake that fit in and support their strategy and them achieving their goals.
You might be thinking, why should I care about business acumen and all of this strategic business planning non-sense? Well, if you can’t develop a sales approach that aligns with your customer’s goals and helping them arrive at their desired future state, you will be nothing more than a commodity supplier forced to sell on price. Your knowledge and understanding of how your customers go about business planning, what their planning for, and why they’re deploying the initiatives they’ve decided to invest in will be directly tied to the quality of your sales approach and how well you align yourself with your customer.
By identifying and understanding your customer’s critical business issues and how “pain” flows through their organization and impacts different departments, systems, processes, teams and stakeholders, you can intelligently position and align your service offerings with top of mind priorities of the key decision makers. It's this very approach that separates top performers from average performers.
Last but not least, customers want to do business with salespeople who whom they feel understand their business because they need to feel understood.
How to Develop Your Business Acumen
Developing your business acumen 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 your business acumen and gain great insight to how your customers think and what they value.
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.