Last week, we hosted the first installment in Vertical IQ’s free fall webinar series—a presentation entitled Red Ocean vs. Blue Ocean Sales Strategies by Ray Adler, banking sales coach, strategist, and change catalyst with BTI Growth Advisors. While Ray’s presentation discussed sales from a banking perspective, the lessons are highly relevant to anyone in a professional services sales or business development role—accountants, financial planners, lawyers, etc.—who call on small to mid-sized business (SMB) owners.
The banking industry is one of many that is experiencing a lot of disruption: innovation that is changing the way banks do business and the way customers expect to interact with their bank. This applies to their sales strategy as well, where successful banks are shifting from a red ocean (inbound marketing tactics) to a blue ocean (outbound marketing tactics) approach to prospecting and business development.
Red ocean sales strategies
A “red ocean” sales opportunity, Adler explained, is where traditional centers of influence (COIs…like CPAs, realtors, existing customers) refer professional services providers to deals with SMB owners where typically three to six other competitors are bidding for the business. Think of the water during a shark feeding frenzy! These traditional referral-based deals are often only minimally profitable due to heavy competition. They are transactional, so there is little emotional connection between you and the customer.
In short, red ocean deals are ones that you wait to come to you, the relationship takes little effort on your part to develop, and because pricing is usually a driving factor, margins and fees are low. The service you provide is, in effect, commoditized.
Too many people in sales are overly reliant on these red ocean deals. This, Adler says, is the reason that 60 percent of bankers fail to meet their annual sales goals. People who call on SMB owners need a “second deal flow spigot” in order to meet their targets. And that’s where blue ocean strategies come into play.
Blue ocean sales strategies
The best time to begin to develop a relationship with a qualified prospect is when the SMB owner doesn’t yet need your services, referred to as “blue ocean” sales opportunities. Think of a calm ocean where there are no other boats in sight. This is a pipeline of prospects, often in the same industry, that you create—first via warm introductions then through nurturing the relationship over time by using effective marketing.
The big advantage of a blue ocean approach is that your only competition is the prospect’s existing service provider. But Adler drives home the point that, when a prospect says they are happy with their current provider, what they are really saying is that no one has come along and shown them that they should expect more value or better service than what they’re currently getting. This gives you an enormous opportunity to differentiate yourself. Use a blue ocean strategy to show that prospect how you can add value and provide a deeper, more consultative relationship by asking better questions.
Creating your blue ocean outbound marketing strategy
- Develop some type of industry, product, or economic expertise, and amass more knowledge than your competitors about it. (Vertical IQ can help you do this!) Use this niche expertise to differentiate your communications with prospects by asking smarter, more tailored questions. This will help position you as a consultant and valuable advisor. It will also help you get warm referrals to other businesses in your niche.
- Determine who among your existing prospects is an ideal (A) or quality (B) prospect, and who isn’t (C prospects), and make a new prospect list that includes the names of the A and B company owners. Consider factors like the prospect’s industry, revenue range, and the length of time they have been in business.
- Leverage your industry, product, or economic knowledge to position yourself as an expert and differentiate yourself from the countless generalists within your profession. Seek out speaking opportunities or write articles for industry trade associations. Write social media posts on the topic to show off your expertise and raise your visibility.
- Better utilize your LinkedIn account by updating your profile and increasing your professional network. Also write and post articles that showcase your industry expertise and frame you as a thought leader.
- Don’t discount the value of providing warm introductions too. It helps position you as a valuable resource, and it can open doors both for you and your colleagues.
Remember: An effective blue ocean strategy takes patience and persistence. It can take 5 to 20 touchpoints (phone calls, emails, lunches, meetings, etc.) with an SMB owner over 1 to 2 years to acquire their business.
Get in the blue!
Meet or exceed your sales goals by working smarter, not harder, to develop your secondary deal flow. Using these blue ocean marketing techniques to differentiate yourself, you’ll gain efficiencies by focusing your efforts on prospects in a particular niche. You also will boost your sales pipeline and become less dependent on COIs to meet your sales goals.
To see a full replay of this webinar, please email us.
Upcoming free webinars in our 2019 Fall Webinar Series:
October 30, 2019 at noon EST
A Winning Game Plan: How Banks Are Playing Both Offense and Defense to Prepare for the Future
Mary Beth Sullivan, Capital Performance Group
- Create context for today’s strategic priorities for most banks given the pressures building in the external environment.
- Explain the critical nature of the need to transition away from commercial lender to trusted advisor.
- Review the strategies on the radar of top performing commercial teams as we head toward 2020.
November 6, 2019 at noon EST
High Touch Coaching in a High-Tech World
Tony Cole, Anthony Cole Training Group, LLC
- Learn how to leverage technology and data to uncover the story beneath – where a salesperson might be struggling.
- Understand and address typical weaknesses of Sales Managers.
- 5 Keys to Coaching - the Why, What and How to improve coaching skills immediately.
To learn more or sign up for our next two free fall webinars, visit: https://go.verticaliq.com/fall-webinar-series-2019-0