Sales Training: Cash the Greatest Pain
Published: Friday, September 30, 2011
Sales Training Insight: Cash - The Corporation's Greatest Pain
By John Kearney, Sales Benchmark Index (SBI)
The Federal Reserve has infused the economy with capital intended to stimulate growth. The greatest growth has not come in investment or hiring, but rather in cash on hand. S&P has reported that while not all industries have seen this influx of cash, most have.
S&P has also stated that cash on corporate balance sheets has grown for 10 straight quarters, with 58% more cash on hand today than in December 2007.
This is somewhat counterintuitive, as executives prefer that their capital is out earning them a higher return than it would be sitting in the rainy day fund. The problem is uncertainty. It's harder than ever to determine what state our economy and our political system will be in down the road. The majority of health care reform that will effect corporations will go into effect in 2013, the impact of which is currently unknown. The Fed just announced that interest rates will stay low until 2013. An election in late 2012 could change the course of fiscal policy. This means that investment beyond 2012 is a tough sell. But what about short term investment?
If you're a sales executive, I hope you're salivating. We know corporations have a need. Their cash is losing value every day and they don't know where to spend it. Putting together a short term investment strategy for your clients should be your first priority.
• Focus on the products or services that have a history of quick returns. Show your evidence. With 1 year Treasuries yielding .1%, a robust 5%-7% return on a short term opportunity with little risk should be an easy sell.
• Illustrate how this new solution will position them ahead of their competition, which is also sitting on large cash reserves.
• Explain that shareholders love to see such progress at a time when their investment portfolios are otherwise stagnant.
None of this is to say that a sales force should not be looking to gain long term commitment or that corporations should not be looking to invest for the future. Provocative selling is still needed to address the pains that a corporation does not yet know exist. The elephant in the room, however, is that a large pain exists and it's the top line of every corporation's balance sheet. Acting quickly to ensure short term commitments now will lead to long term relationships. When the economy does turn around and the future looks promising, your customers will remember who got them through the tough times.
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