“Troy, I need to diversify.” It’s one of the most common comments I hear from a client, or even just someone that I’m chatting with. Everyone is looking to grow their business, and one of the most common ways to do it is to think about adding new products, new services, and new markets. I’m not immune, either. I am constantly thinking of new ways to offer value to you (or to other customers).

The trouble is that the road to diversification is paved with potholes – which, I suppose, means that it’s paved by whoever does the street my office is on in Kansas City. Diversification sounds great – limited sales effort, incremental investment, and a big win in revenue. Many times, however, it doesn’t work out that way, and if you want to diversify the right way, there are some things you need to be aware of.

When you start thinking about diversifying, there are a few key questions that you need to ask yourself:

1. Can the new product be sold through your existing relationships? This might be the most important factor in diversifying. Typically, the idea behind diversifying is horizontal integration; the idea that you can sell more products and/or services to existing customers (thus a lower cost of sales). That can work – IF you are selling into your current contacts. On the other hand, if you have to forge new contacts, that lower cost of sales can quickly go away.

   One example that I’ve seen in several cases is companies that sell office supplies and decide to diversify into promotional products. It sounds appealing. Both are incremental sales with a strong recurring revenue potential. The problem was that the sales processes go through two different departments. Office supplies are typically sold to a CFO or Office Manager; promotional products are usually sold through the marketing department – and all their current contacts could provide was an introduction. Some were able to succeed. Most weren’t.

2. What new infrastructure do you need to be able to service the customers? Any time you bring in new products, you need a new infrastructure or part of one. The biggest question is – what level of infrastructure do you need? Some companies – Grainger comes to mind – simply build a business model around moving boxes from one place to another, and what’s in the boxes isn’t overly critical (according to a quote from the president of Grainger that I read years ago). In that environment, the incremental cost of new products is very low.

   For most of us, that isn’t the case. Your company is probably set up with one specific service and delivery model, and the critical question is to understand what modifications will be needed (new personnel, space, processes, equipment) to service the new product. This seems obvious, but you should figure out ahead of time what it’s going to take. More importantly, figure out what pace you can use to add the new resources. You probably don’t need to add everything at first; you can sell ahead of the infrastructure to a certain degree.

3. How does the new product fit with your current sales and service culture? Some sales environments require more hand-holding than others. The key to understand is – how much hand-holding and service is required for the new products? This is one of those issues that seems to have an easy solution but doesn’t. If you have a high service model, your customers are going to expect that model even if you add a low service product. On the other hand, if you have a low service model, your new product had better be a low service product – or you won’t be able to meet customer expectations.
4. What’s the competitive landscape? Again, this seems to be obvious – but based on what I’ve seen in the world, it’s not. If you’re diversifying, are you moving into a stronger or weaker competitive landscape? Sometimes companies have a knack for jumping out of a frying pan into the fire, and walking into a tougher competitive situation.
5. How good is your sales force? I’m putting this last on the list, but it should be one of the first considerations. Sometimes the urge to horizontally integrate is driven by a low performing sales force; the idea is that if the current sales force isn’t good at getting new customers, maybe they can at least sell more stuff to current customers.

   The trouble with this idea is that a sales force that isn’t good at getting new customers usually isn’t that good at executing in other phases of the sales game, as well – so the result is that you free the sales force from trying to get new accounts in favor of focusing on more sales to current customers, and you get neither. Horizontal integration isn’t a solution or a sidestep for a weak sales force.

Diversifying can be a great way to build your business, but you have to have your act together first; it’s not an answer for nonperformance in other parts of your business.

This is an answer to a question that I get asked every now and then. “Troy, how do you get and stay productive?” I’ll be honest enough to say that my own productivity system has been a work in progress for most of my career, and it will continue to be so (I’m always learning). Some of the techniques have come from reading, most from practice, and many from my passion for building race cars and hot rods.

Yes, I said race cars and hot rods. It’s a hobby that has taught me a lot over the years about problem solving and work habits. There’s no such book as ‘Seven Habits of Highly Productive Gearheads,’ but if there were, some of the habits below might be in it.

Game-plan every day: This seems obvious – but many people don’t do it, and in fact, I didn’t do it for many years. Every day has a game plan for me. The obvious components of the plan are ‘live’ activities – appointments, speaking engagements, and the like – but I always have some phone calls to make, some tasks, and some work on at least one long-term project. I also plan in my personal projects (I still work on cars and motorcycles) and my workout time. Rigid? Yes. But planning all this is what gives me time for family, believe it or not.

Write it down: OK, call me a Luddite if you wish, but my game plan is always written down with a pen on real paper in a real (inexpensive) planner book. I’ve tried using the task management components of Outlook (I use Outlook for my contacts and appointments), but I find that it’s too easy – at least for me – to simply put a new date on an old task. Writing implies permanence and commitment (which are also reasons that handwritten thank-you notes are particularly effective, but that’s a different story). I like CRM and use it – but there’s still a place in my world for a pen and paper.

Make appointments with yourself: My phone calls are programmed into my day, including the time slot that I’ll be making them. Particularly for telephone prospectors, it’s vital that you block time into your schedule – ESPECIALLY for those parts of your job that you don’t love. If you don’t, it’s too easy to slide them off.

Checklists are great: I like lists. I like them a lot because they keep me focused. Admittedly my use of the word ‘checklist’ is a bit loose, since I’m a crosser-offer instead of a checker, but you get the idea. Again, this is a benefit of writing things down instead of using Outlook. For me there’s a satisfaction involved with taking a pen and crossing an item off my list.

Touch big projects every day: This is one that I learned from racing and hot rodding. Sometimes a car build can stretch out over years, and if you lose momentum on one….well, Craigslist is full of aborted projects being sold at a heavy discount. You lose momentum by taking one day off, then another, then another…..and soon your project is gathering dust and you can’t remember where you left off. When I’m working on a car, I touch it every day, even if it’s just to change a light bulb or do a little sanding on a fender. When I do this, I never lose momentum and I never lose track. This method has segued over to business projects, as well. To write “Sell Like You Mean It!,” I spent an hour every day working on the manuscript for six months. I’ve used the same method to write my new book, which you’ll be hearing more about soon.

Work ahead: If you’re making calls today for appointments tomorrow, you’re already sunk. Don’t be that guy or gal. Instead, work well ahead. This article was written two weeks before I posted it. Why? Because I was inspired, and my own history tells me that when I get inspired to write an article, I’d better go ahead and write it, even though I might have a couple of articles ahead of it in line.

Stop when you have to: One of the things that I’ve learned through painful experience with my cars is that, sometimes, it’s best to stop in the middle of a task or project if you’re thrown a curveball, and reapproach it with fresh eyes later. A couple of months ago it was late in the evening and I was installing a part on my bike, and I was determined to get it done that night. The problem was that a bolt hole wasn’t lining up and I was starting to cross-thread a bolt. Now, intellectually, I know that this is bad and that I should stop – but I didn’t. Instead I turned the ratchet harder (perhaps hoping that the bolt gods would smile upon me and magically make the bolt line up), and messed up the threads. At least now I stopped. The next day, I got a tap, recut the thread on the motorcycle frame, and as I was doing it, an easy method for making the parts line up popped into my head. Ten minutes later it was done. I could have saved myself quite a bit of time if I’d stopped when things started to go bad.

Find your idea time: We all have times during the day when our mind is unfettered and is likely to give us great (and, honestly, sometimes not so great) ideas. For me, that’s the last hour before bed. I need to keep my mind unoccupied with important tasks (so, no business work during that time), and I need to keep my planner handy so I can capture those ideas. What do I do during that time? I watch TV, I read something unrelated to business…..but I am ready to grab a good idea when it hits me. Find yours and use it.

Keep a diary: Okay, okay….if you prefer to call it a ‘journal,’ go right ahead. I suppose that’s more manly. On the other hand, George Patton called his a ‘diary,’ so I think I’m OK on that count. At the end of every day, I write a little summary of the day in the same planner book that I use to plan my day. I do this for two reasons: First, I want to see if I accomplished my mission for the day. Second, sometimes the big success of the day wasn’t planned, and I like to keep track of positives. I do this because it makes me my own accountability partner. I never want to write “pretty pointless day,” so I strive to make it a day that advances me somehow.

There’s one other aspect that I didn’t mention, because it’s highly individualized. Do what works for you. You don’t have to use all my nine steps; heck, you don’t have to use any of them if you have a system that really works for you. But you should have a system and you should faithfully execute it, day in and day out. Until I did, I often had days where I sat in the evening wondering where the day went and why it didn’t produce a result.

We used to think it was good news. “Hey, I got a call-in!,” we’d say excitedly to our boss/co-workers, and we’d eagerly schedule the appointment. And why not? After putting in hours of prospecting each week to set our appointments, a decent call-in felt like pennies from heaven. They didn’t all result in a sale, but they were a higher percentage than prospected opportunities.

Nowadays, however, call-ins sometimes produce more fear in salespeople than prospecting, and this is due to an oft-quoted statistic that “these days, 57% of the buyer’s process is done before they ever call you.” The stat comes from a survey of 1,400 B2B purchasing executives, and was conducted by a company who markets a ‘radical new sales approach’ – so it might be just a tad bit skewed. Still, I think we can agree that when a customer calls you, at least some of their buying process has been done without you – and in today’s internet driven environment, more of that process might have been completed than in yesteryear. So, as salespeople, what do we do to succeed in this environment?

Before we dive into this, let’s review the customer’s buying process for a moment:

Motivation: Something prompts the customer to realize that they have an unmet need that could be met by making a purchase.

Investigation: The needs are defined and product/service solutions are measured against the needs.

Evaluation: Price and terms are defined and measured for value, affordability, and timeliness.

Decision: The customer buys or doesn’t.

In most B2B environments, the call-in used to come after the Motivation step, which left us free to complete the biggest parts of the buying process. The bad news today is that, with product and service information so readily available via the Internet, your customer has probably completed all or part of the Investigation and perhaps the Evaluation steps. The good news is that you’re still part of the process.

This, however, is the moment that too many salespeople lose the sale. They do so by going to one of two extremes. Either they assume that the customer has done no research and treat the customers as unintelligent, or they expect tha the customer has done all their own research and attempt to move the process forward faster than the customer wants to. In both cases the customer is annoyed and likely buys elsewhere. Here’s what you must do when the customer approaches you:

Find out what parts of the process the customer has completed. This isn’t as difficult as it sounds. Simple questions like, “What research have you done so for,” or even “how did you find us,” can get you a long way toward a common understanding with your customer. They show that you respect the customer’s intelligence and are willing to move forward with the customer and not against the customer.

Find out what gaps exist in the customer’s knowledge. By “gaps,” I mean that in many cases, the customer thinks that they have completed knowledge in a particular topic area, but thye have not. This isn’t uncommon, especially when the research is Internet driven. Understanding what the customer knows and what the customer doesn’t know is improtant. It’s also important to be diplomatic when filling these gaps.

Find out what the customer knows that is wrong.   If it’s on the Internet, it has to be true, right? I’m laughing right now. As you probably know, there’s a site called “Snopes.com” that exists to debunk urban legends. Sometimes I think we need a “Sales Snopes” to debunk false claims in selling. This is where your diplomatic skills really come into play, because the customer may be married to a piece of knowledge that is incorrect.

Pick your battles carefully. If there are gaps, or if the customer has an incorrect piece of knowledge, you have to quickly assess for yourself how important these issues are. For instance, if the customer has discovered a ‘fact’ on the Internet that isn’t a fact, BUT is inconsequential to the customer getting the result that they want and is inconsequential to the sale you need to make, you may want to let it go. There’s no need to provoke a contest that doesn’t matter in the end result.

Be efficient with the customer’s time. Your customer has done their own research in an effort to be efficient and effective with their time. When you cover ground that your customer has already covered on their own, you become repetitive and the customer gets bored. Remember, Comfortable Customers Buy. Bored customers aren’t comfortable. Simply pick up from where your customer left off.

Never be afraid of your customer. Fear is the enemy of all good things in selling. Few things can be scarier to some salesperson than an educated customer. Your customer hasn’t educated themselves in an effort to be your opponent – they simply want a higher level of participation in the buying process. Allow them that, and you’re going to win.

By the way, while call-ins will happen, it doesn’t mean that you shouldn’t be expending significant efforts on a good prospecting effort. The earlier you get your customer, the better. If the customer sees YOU as a reference instead of the Internet, you’re going to be in great shape.