Hare & Tortoise

Speed kills sales deals; so does overselling.

As true road safety experts will tell us the killer is inappropriate speed for the conditions; this is also the case with sales deals – the pace of engagement needs to match the needs of both parties. Overselling is characterised by the sales person doing more than is required and never quite getting to the point of asking for the order and they usually lose as the prospect will have passed the point when they were most likely to have said yes. This is an example where the speed is too slow for the conditions.

A common example of a situation where the speed is too high for the conditions is the classic double glazing story where the sales person takes up residence in the potential customers lounge and stays until they get the order. The householder may well say yes just to get rid of the sales person but cancel the order the next day. Not only is this a waste of time for both parties it will cause some damage to the supplier’s brand.

To understand these two related issues and offer some insight to the antidotes and potential cures we look at these two prime culprits below …

Speed Kills? So set the pace appropriately!

Hare & Tortoise

Should I be Mr Hare or Mr Tortoise today?

There is a general feeling these days that everything has to be instantaneous but impatience is now a common cause of poor decision making. The example quoted earlier, where a prospect says yes at the point of sale then cancels the order later, is what is known as “buyer remorse”. Having acted in haste, the buyer is avoiding the second part of the saying which is to repent at leisure. Even worse, not only does the first company lose the order it often opens the door for a competitor – the first company does all the work educating the prospect and a competitor collects the prize.

In business there are guidelines such as calls to be answered within three rings, or if someone making an enquiry leaves details we must get back to them within two hours. While I fully agree with the setting of targets it becomes an issue when the speed of response is deemed more important than the quality of the response which, in my experience, is often the case these days.

I mentioned the example of the double glazing sales person in the domestic setting and other examples would include the various miss-selling scandals connected with financial products. Most of us have experienced this or at least know someone who has but the problem is not the preserve of the domestic setting and is also present in B2B sales. This behaviour is typically driven by the supplier wanting the deal to be done this; day, week, month, quarter and is a clear case of the commercial needs of the supplier driving the rules of engagement. This pressure often leads the supplier’s sales people to ignore or subjugate the needs of the potential customer and is at its worst when sales people are “commission only” as they need to make sales to live

This behaviour usually comes with inducements from the supplier such as; discount, BOGOF, free maintenance, pay for 12 months get three extra months free, etc. This is a major cause of mistrust of sales people as the “offer” can feel too good to be true which leaves the prospective customer suspicious when what is required for effective commercial engagement is trust.

An alternative word to speed, which perhaps better portrays the topic, is pace. For a business negotiation to proceed successfully, the parties need to be moving towards the shared goal at a similar pace and towards an agreed date for arrival. There will be typical patterns for different industries and types of proposition. The sales cycle for commercial aircraft is measured in many years while a decision to move to a hosted cloud solution might be two to three months for a small business stretching out to nine to twelve months for a large business with multiple sites and 100s of users.

So, knowing your industry and what might be typical is an important input to the thinking. Of greater importance to knowing the industry norm is putting in the effort to “know” the individual prospect otherwise the result will be a generic response to an individual need.

Here are some tips for creating your own rules of engagement:

  • Review the timescales associated with deals you have done in the past two to three years. Look for patterns to create guidelines that you can apply to future deals and be aware of changes that may have happened over the period of observation (many businesses are reporting lengthening sales cycles).
  • Lay out the steps you need to go through in getting from a first meeting with a new contact through the point of identifying an opportunity for which you will submit a proposal. Allocate the time you think will be required for each step taking account of the information you have about past deals.
  • Define the steps required to pursue an opportunity through to the point of decision. You will need to give due regard to all the factors the typical customer expects; formality/informality, RFIs/RFPs, allocation of time for; multiple meetings with multiple contacts, presentations, proposals, site visits, etc. If you collaborate with people outside of your business to help win new work you will need to consider their time constraints.

The combined results of these steps, will enable you to create a framework – a skeleton plan and timetable – for a typical scenario when taking a new contact through all the stages of becoming a customer for you.

Combining all of the above you now have the makings of a process of prospecting for new business, you have a model timetable, your staff know what they must do and by when and you know what you need to do to meet prospects’ expectations.

As mentioned earlier to be successful you must consider the individual customer, so why not ask the customer if they have a preferred decision model and associated timetable?

  • If they do, review it and if you are happy with it formally agree that is what you will work to.
  • If they have a decision model but from your point of view there are critical gaps, then negotiate to fill those gaps and get sign off on the new composite model and timetable.
  • If they do not have something, which is more common than you might think, then present your model and ask if they are agreeable to work to it. There may be some debate around detail but reaching agreement should be quiet straightforward and as before both parties should sign off on what has been agreed.

Either of these last two approaches will lead to a win-win scenario in terms of building trust and helping one another to improve the engagement process.

You now know the appropriate pace of engagement for your market and you have a mechanism to determine the correct pace for each prospect so you can set expectations with the prospect, your staff and suppliers. This structured approach will, over time, also enable you to build more realistic and reliable sales forecasts.

This approach will also help in cases, as discussed in the June newsletter, where customer decision making is unpredictable – with an agreed and common process outcomes will be much more predictable.

Health warning – the proposed approach will probably make life harder initially but once the process is established the rewards will become obvious.

Overselling overwhelms?

Overselling is about doing too much, doing the wrong things and/or doing things in the wrong order. In most cases overselling also leads to suppliers taking too much time to get the prospect to the point of stating their decision.

Keep calm & do your homework

Remember the 5 Ps

Too many products. If you have multiple products or services focus on the ones that directly relate to the issue the prospect is wrestling with at the time. By all means make them aware of the full range of what you do but in a 30 minute meeting this should take 2 minutes with the rest of the time being focused on the matter at hand and the solution you are offering.

Make sure you do the first deal very well and there will be plenty of time to come back and sell them more of what you do; give them the taster for your solutions and they may be more willing to commit a larger investment next time.

If during the conversation about the current issue they raise a separate unrelated matter, acknowledge it and ask if they are happy to “leave that to one side for now”. If they have decided issue two is more important you can switch, otherwise stick to plan.

Too many benefits. Can there be too many I hear you ask? There can; this starts with an approach where the sales person assumes they know what will be of benefit to a specific prospect. For example, it is common for suppliers to assume that everyone wants/needs to save money. Of course no one wants to pay more than they need to but equally no one wants to buy something that is inferior or unreliable for the sake of saving a few percentage points on the price. A subject discussed in previous articles, is the need to appreciate the difference between Price, Cost and Value when making buying decisions and sales people need to have this in mind when presenting their offer and the benefits.

A tool to help work out what might be beneficial to an individual prospect is FBIFeature, Benefit, Incentive. The approach:

  • In the early stages in the engagement with a new prospect you establish what matters to them with respect to the solution you are discussing; size, colour, weight, speed, delivery time, maintenance intervals, throughput rate, service intervals, repair response times, power usage, … It will differ from industry to industry and within that from prospect to prospect.
  • Consider each feature of your proposition and how it can deliver against the criteria that matter to the individual prospect. For example if your product delivers a very high throughput rate, and this is significant to your prospect, they will see it as a benefit of choosing your solution. If this was not an issue then the prospect may see the feature as irrelevant and potentially something that makes you more expensive than a competitive offer.
  • Summarise all the relevant benefits your proposition can offer and ask the question “If I can demonstrate that our solution will do; X, Y and Z, and that we can deliver by dd:mm:yy will you go ahead and order from us?” The demonstration that you have the features to deliver what the prospect needs and that you can deliver in a timescale that you know matters to them provides an overall benefit for them in dealing with you which in turn will act as the incentive to go ahead with you.

A benefit only applies if it satisfies an explicit need and anything else is just hot air that, far from adding value, is certain to detract from the things that you can do that actually matter to your prospect. Scary I know but even for complex deals three or four benefits are probably enough.

Over promising and under delivering. Do I need to say much on this? Too many potentially good relationships are spoilt by suppliers offering more than they can deliver and even if the prospect needed everything offered it would be far more honest to offer what can be delivered well, as you will be quickly found out.

In summary

Find out the real needs, focus on your features that satisfy those needs (by delivering the benefits that matter), confirm and re-confirm that the list of requirements is complete and that your prospect acknowledges that you can deliver the complete solution.

Now; some good advice from way back runs “ask for the order and shut up”. We all have two eyes, two ears but just one mouth; use them in that proportion. Don’t break the silence, don’t offer to do more; make the offer, ask the closing question and shut up.

Advertisements
Courtesy of Microsoft & Bing

21st Century Sales – don’t let the myths stifle your success

Courtesy of Microsoft & BingThe overarching myth is that selling in the 21st century is in some significant way different to the approaches of earlier times. You only have to consider the many cold calls made to your home phone or the PPI/accident compensation texts to your mobile to realise the worst techniques of the past are still alive and kicking albeit under a different disguise.

Then there are the “new” approaches to selling that you might find under titles such as; Modern Selling, The Challenger Sale and Sales Enablement. When you explore these ‘new’ phenomena you will probably find they simply describe how professional selling has always been conducted. Current technology has certainly provided new tools but we question whether technology enables you to be more effective and productive, and if it always make doing business easier?

This post will help anyone struggling with questions such as; “is the B2B sales person a dying breed?”, “is the cold call dead?”, “what is best in 2015; in-bound or outbound marketing?”, and “can technology solve all of my marketing and sales issues?

Myth One – buyers have changed significantly

We have written on a number of occasions about the savvy well informed buyers that many consider a significant feature of the commercial landscape of the 21st century. You know them; they are 57% of the way through the buying journey before engaging with suppliers. Belief in this fact has led to a ‘self-fulfilling prophecy’; if your sales people don’t put in the effort to engage early then of course the buyer has no choice but to make the journey towards a decision on their own. When the buyer eventually needs to contact suppliers they will have made many decisions for themselves leaving the suppliers in a position that all they can do is react and comply.

However, the evidence is that sales people who do engage early in the buyer’s journey, or better still before it commences, are seen as a valuable resource to the buyer and they will get a bigger share of the business that is going to be on offer.

Debunking this myth is the foundation to dealing with the others.

Myth Two – B2B sales people are a dying breed

They certainly are if your go-to-market strategy is based on the assumption that the buyer will come to you when they are ready. In this case all you will need are good sales order clerks empowered to give discount and offer special terms to secure the business. However if you take into account the fact that 75% of the orders for new business go to companies who engage early then you need well equipped B2B sales people who will be out hunting for you if you don’t wish to be left scrapping over the remaining 25%.

To make sure you are out there fighting for all 100% of the business you need sales people who are able to engage early and ideally before the prospect even realises they have a problem to solve. Sales people need to be equipped to help the prospect through the awareness stage which includes the vital process of education; when the prospect needs to learn about the various solutions that might be appropriate.

Fresh off the press research from SiriusDecisions states that B2B buyers want to interact with sales people at every stage of the buying journey. The findings “challenge the common industry view that b-to-b sales representatives’ roles and importance are declining due to a disintermediation by digital buying behaviors.”

Myth Three – The cold call is dead!

The truth is, the cold call was never alive. What has changed is that people are now very unwilling to take unsolicited calls, which generates that feeling that the approach is dead. However, even when times were different and most people did accept unsolicited calls, they rarely produced anything of value. This is a classic example of mistaken identity where activity was assumed to equate to progress.

Unsolicited calls are still a very useful tool in the prospecting kit bag but those calls need to be well researched and informed by the facts. When the call is made the caller must demonstrate an understanding of the individual prospect’s business, potential business issues and the state of the prospect’s industry. The caller needs to be able to educate the prospect based on their wider general knowledge of the issues at hand and the potential solutions.

Myth Four – outbound marketing is dead; inbound is the only way

Our view is that some businesses will do better from outbound, others from inbound but most will benefit from a blend.

In a recent conversation with Michael Packman of Nexus B2B he explained how their research had led them to create a blended or, as he calls it, a hybrid solution which provides both outbound and inbound in the appropriate proportions for each customer. Michael runs what I consider to be one of the very best outbound lead generation businesses so I feel very confident in his findings.

When you drill below the surface of this issue, outbound vs. inbound, another issue is exposed. Although people talk about inbound marketing replacing outbound marketing a subtle change occurs in the expectations where “inbound” not only replaces outbound marketing it also replaces the need to sell. If this is what you want then there is no issue but beware of the hidden change that could occur.

So we bust two myths for the price of one; inbound will generally be most effective when blended with outbound marketing, and inbound marketing is not a substitute for selling.

Myth Five – technology can satisfy all my marketing and selling needs

I am no Luddite, in fact I have worked in the IT industry since 1969, and I have made extensive use of technology in my own businesses since I first started in 1980. I was sending e-mails to selected customers from 1982 and commencing in the same year I provided a cloud (wasn’t called that then) service to companies with mobile sales forces.

So, if not a Luddite what am I? Answer; sceptical. Having mainly worked on the supplier side of technology I know only too well that we can get carried away with the claims we sometimes make. Most technology companies are fundamentally genuine in the claims they make but all are commercial businesses who need to make sales to survive and it is this simple commercial fact that sometimes applies a rosy tinted filter to reality.

In the interests of keeping this short; technology can be extremely useful in marketing and fairly useful in selling. In certain circumstances, technology can all but replace the need for human involvement e.g. when you are ordering something on line. However in B2B sales human-to-human engagement is essential and some of the reasons why have been covered earlier.

Don’t be seduced that technology can do it all and don’t be seduced by the cost argument – technology may be cheaper than human beings but when you find the orders are not flowing as expected the outcome might prove very costly.

Myth Six – technology enables my sales people to be more effective

Always? As a result of technology your sales people can access huge amounts of data both internally and externally about your prospective customers and their markets. All very empowering! However, we see a lot of cases where sales people are literally swamped in data.

Before making a call they check; CRM, LinkedIn, Social Media, Google, credit rating agencies, maybe Companies House and they will typically access internal documents such as call reports. After the call they send a meeting invite, populate the calendar, send a confirmation e-mail, prepare some material for the meeting (perhaps a PowerPoint), and check with marketing for case studies and other sales enablement material. Then a further set of activities follow on from the meeting, and so it continues.

All of this activity looks like work but the ultimate test is whether it makes the sales people more effective and productive or just busy.

Technology should be used sparingly to empower the sales people to make better calls and conduct better meetings but ensure the proportions are right. If your sales people are spending more time in front of the screen than they are on the phone or in the customers’ offices the proportion is probably wrong. The other thing to ensure is perfect alignment between the needs of the sales function and what marketing is delivering to support it. All too often sales people have to spend time re-working things to suit their needs.

A myth is defined as something fictional or unproven
– not a great foundation for business success!

The ACD of buying behaviour

Many organisations that we work with struggle as their customers often prevaricate when it comes to simply saying yes we will go ahead and buy what you have proposed. Although not the preferred answer, even a no would be acceptable because it is at least certain. What none of us likes is the uncertainty of will they won’t they.

Understanding what happens in someone’s mind when considering whether or not to buy can help the seller both to understand why there might be a delay in the decision and more usefully what can be done to minimise or eradicate that delay. The three main stages in a buying process are Awareness, Consideration and Decision. The solution to eradicate or at least minimise delayed decisions can be found in the earlier stages of awareness and consideration. Waiting until the prospect has entered the decision phase to influence how it might proceed is too late and the seller has, in the main, become a passenger in the process. That said, many “purchasers” don’t have a process for making the decision so there is nothing obvious the seller can do to apply influence.

By the way; I am of course fully aware that the majority of people reading this wear both hats; sellers and buyers and understand the ACD of buying behaviour can benefit all.

Looking at the three stages and what happens in them gives a valuable insight to what sellers can do to influence buying behaviour. The messages in the article are designed to be of equal use regardless of which hat you may be wearing; seller or buyer – no one wants to waste time prevaricating over a decision any more than they would wish to wait for that decision.

Awareness

This is the point or, more likely, series of events that makes a prospect aware that they have a problem that may need to be solved. Imagine; you have had an occasional mystery noise from the car but ignored it. Then there comes the rainy night when it won’t start but eventually it does, then it does it again, then it runs badly in hot weather. Eventually you will conclude that this series of issues might just be clustering together into a real problem. You are now aware.

The above scenario is common in a domestic setting but there is another more common scenario in the business world. As business leaders and other decision makers typically have a multitude of competing issues to consider, the process of issues “clustering” to create an actual problem may take quite some time. This is where the role of a sales person or account manager can provide a valuable service to the prospective buyer. The sales person who understands the industry that the prospective buyer is in will be familiar with the typical issue and problems of that industry so can play a valuable part in raising awareness and in many cases before the problem stage is reached.

Consideration

LI Choice
This will include; can I ignore it or must I fix it, when does it need to be fixed by, can I fix it myself, how much will it cost to fix/ignore, how will I finance it, what impact will the decision have on the business? There will be many other factors especially when making complex business decisions or potentially costly personal ones.

We have written in previous articles about the research which suggests that a “buyer”, especially for a complex or bespoke solution, will on average be 57% of the way through the buying journey before they engage with potential suppliers. We have also publicised another piece of research that found some 75% of new business orders go to suppliers who engage before the potential buyer has reached the 25% mark in their buying journey. We have drawn a number of conclusions from these two sets of findings:

  • The supplier who engages early will be in pole position to win more of the available business
  • The suppliers who wait for the buyer to engage them will be left fighting against pre-conceived ideas, or just fighting over the crumbs and in most cases will need to compromise on price and margin to win the work
  • The buyer who engages early benefits from the suppliers’ knowledge and experience to inform the process of consideration
  • The buyer who engages with suppliers late in the process may fail to get the optimum solution as the engagement process typically focuses on price not value. Critically, they may also address only symptoms and miss the root cause leading to new symptoms popping up. (the operation was successful, but the patient died)

Most cases of prevaricating buyers are found in late engagement scenarios. This is bad for both sides; the buyer is delaying solving the problem which often causes waste (time, money and other resources) and the seller does not have a clear picture of future revenue as the sales forecast cannot be relied upon.

Decision

Hopefully this won’t offend too many of our readers but most people are poor at decision making. The cause is the lack of a systematic process for evaluating and selecting a solution. That process should mainly focus on clinical matters such as; performance, reliability, quality, service levels, etc. It is also natural that the process will include an element of emotion as the decision maker will be concerned about the consequences of making a mistake and this leads to risk aversion behaviour driven by fear, uncertainty and doubt.

A common mistake made by both sellers and buyers is to try to mitigate the risk by doing a financial deal. How odd – “I am uncertain about your offer but if you make it cheaper I will go ahead”. Who is kidding who!? How can a lower price suddenly make a risky purchase acceptable? Similarly, how can a lower price make something that was not ideal for the job at a higher price an acceptable option?

The decision process is always smoother and more predictable, for both parties, when the initial engagement point occurs early in the buying cycle. One key reason is this gives more time for the parties to work together which means more time to test the potential relationship; principles, ethics, capability, delivery mentality, etc. It also allows time for the seller to meet and understand everyone who will be involved in the decision and for the parties to work out a mutually acceptable decision making process.

Another important factor in decision making arising from early engagement is that it gives suppliers time to understand the real problem, not just the symptoms, which in turn enables them to offer the correct solution. Some of the more cynical amongst us might consider this allows the suppliers to have too much influence over the thinking of the buyer to which I would say the buyer always has the ultimate sanction – “NO!”

In summary:

  • Engage early – this is good for both seller and buyer but is more likely to be driven by sellers.
  • Engage widely – both sides need to meet all key people who will be involved in the delivery and operation of the solution as part of the process of deciding the best fit for a successful implementation.
  • For the buyer – choose your preferred supplier before starting to look at solutions; someone that understands your problem and empathises with its impact on your business. A key reason leading to delayed or failed decisions stems from confusing the selection of the supplier with the decision over the product or solution. The initial effort should focus on building the working relationship including how and when a decision will be made.
  • For the seller – decide who you want as your customers and proactively approach them. By all means accept introductions and referrals but beware of compromising your market strategy – you don’t have to say yes to everything!
  • Once the parties have agreed they wish to work together then they can focus jointly on designing and building the solution. This can now be done from a position of mutual trust and interest which is the best way to get the optimum solution while controlling the risks.

Get the ACD right and the decision will flow naturally from the process with a contract close behind!

Adapting to the Supplier Lifecycle

Why is it important for salespeople to understand their customers’ or potential customers’ supplier lifecycle?

It is an undeniable fact that the more we know about our customers’ requirements, the more we know about their procurement and selection process, the more successful we will be. No sales organisation would disagree with this statement; any sales training consultancy would claim that they train sales people to be customer focused.

However, isn’t the reality that usually the first time we get to see the customer requirements clearly defined is when we get sight of the RFP? The same RFP that prescribes what information you must provide, and in what format. If you have not been able to influence the RFP in any way, your chance to differentiate your offer, post RFP, is limited.

So how will understanding the supplier lifecycle help you – not just in the pre-sales phase, but post sales as well?

Put simply – understanding the supplier lifecycle will enable you to map your sales process and thinking to the process and thinking of the customer. This is because the supplier lifecycle is a holistic model – of which procurement is just a part. It covers activities pre RFP and sourcing, and those post engagement – how the customer seeks to work with a supplier once the service delivery or project is live.

As with sales models and concepts, there are a vast number of supplier lifecycle models; however the generic 5 stage approach described here is typical.

“IRSID”

Identify – For the product, service, or project in question – establish objectives, outcomes and the detailed requirements at the business, user and technical levels

Research Investigation and planning before moving to sourcing – to ensure that the strategy is focussed on the most effective engagement models with the right “screened in” potential suppliers

Source The formal procurement phase – the step of going to the market with defined requirements, receiving proposals and making selection decisions against pre- defined criteria

Integrate Engaging and transitioning -The iterative stage between sourcing decision and deliver. Designed to ensure that people and processes are aligned in moving from current state to the new business as usual

DeliverImplementing and developing -To ensure that the supplier delivers, as a minimum, what they are contracted to deliver, to quality, time and price. Developing is about investing in the relationship, to enhance performance, and maximising value.

So how can you use this understanding to help you win more sales, and to develop an account?

  1. Use your contacts in your customers to find out what the lifecycle model looks like in their organisation – just asking the question will demonstrate you are trying to understand their world
  2. Investigate to find out who the key stakeholders are at each stage of the cycle
  3. Use your awareness of the integrate and deliver stages to highlight in your RFP response that you understand their expectations of you as a supplier throughout the service/ project duration
  4. Demonstrate your understanding of this holistic approach by asking in depth, searching questions for each phase; more than the usual questions, important though they are, of “what are your requirements?” and “what is your decision making process?”
specialist in improving management of strategic suppliers

improving management of strategic suppliers

Richard Moxham is MD of Supplier Management Training Ltd, a specialist consultancy advising and training clients in improving their management of strategic suppliers – in performance and relationship terms. In a previous life he worked in a number of sales and sales management roles, so can see the world from both customer and supplier perspectives

Helping Buyers to buy

Should sales people break the rules to win?

In his article Richard says “Put simply – understanding the supplier lifecycle will enable you to map your sales process and thinking to the process and thinking of the customer.” I heartily agree but would add that from the suppliers’ point of view, there is a risk that they could end up in a restrictive process with limited scope to demonstrate the things that differentiate them from others bidding for the same work. This is also a risk for the potential customer as although they will of course get answers to questions they have asked, they probably won’t get answers to the questions they should have asked.

Incidentally, supplier lifecycle may mean a formal process with RFI, RFP and the like but the points made in this article apply equally well where there is no formal process. In this case when we talk later about the supplier and the users cooperating to define the ideal solution they will also be cooperating to define a mutually acceptable buying process.

Provided the procurement process allows suppliers some space to make a ‘freeform’ presentation then the potential customer could get the best of both worlds. All responses will conform to a standard structure so all will provide answers to a set of fixed questions but the prospect will also gain an insight to the suppliers’ knowledge and experience if they are allowed to also present their own thoughts and ideas. After all, prescription will constrain innovation, but we acknowledge that not all customers will be happy to be on the bleeding edge.

If the procurement facilitates both a fixed and a flexible response then both the suppliers and the prospective customer apparently have the ideal situation. So why might sales people need to break the rules?  There are two main reasons;

  • Firstly if a prospect has a very strict and restrictive procurement process then the sales people may need to find other ways to gain visibility of the things that really make their company different.
  • Secondly, even a flexible procurement process will tend to sanitise the responses such that the solutions all look rather similar with the main differentiators being price and terms & conditions.  If the intended purchase is something such as a piece of equipment with a very clear functional purpose, then a restricted purchasing approach will usually work.  However, if the intended purchase is for a service or a solution, then for the customer to enjoy the best outcome the procurement process will need to be more interactive and flexible.

How has the procurement scene changed?

We quoted the results of a couple of surveys a few months back which demonstrate clearly that the real issue for suppliers is the easy access that potential customers have to apparent information.  Apparent as much of what is found on the web is often just data and unsubstantiated opinion.

A further piece of recent research suggest that ‘buyers’ are some 60% along the way through their decision making process before engaging with potential suppliers and as a result the buyers are in the driving seat.  This often leaves the potential suppliers with the task of dealing with the consequences of misinformation and this task is not easy if the procurement people are, as is understandably the case, of a skeptical nature.  This is a classic procurement scenario where the engagement is led by the ‘buyer’ with the potential supplier being left to react when responding.

Another piece of research sends a dire warning for those suppliers who wait for the prospect to contact them as it found that 76% of the orders go to the suppliers who engage early leaving just 24% to fight over for those who wait to be approached.  This supports a long held view that ‘blue birds’, opportunities that turn up unexpectedly, are often just a prospect wanting a few make-weight bids and that the likely winners of the work are already well entrenched.  Many companies qualify out such apparent opportunities saving themselves the time, effort and money of bidding for something they almost certainly cannot win.

Why and how should sales people break the rules?

The why is simple; if the situation is that the prospect has a restrictive procurement process then the sales people will need to act to change the ground rules to improve their position over that of competitors who will be bidding for the same piece of work. To some this will seem very self-serving of the suppliers but the reality is that the ‘users’ of whatever is procured as a result of a more open approach typically get a better outcome hence both sides benefit equally. If the procurement specification is restrictive and the ground rules can’t be changed then, as with the blue bird mentioned earlier, consideration should be given to whether this is in effect an opportunity to be qualified out.

The how is also not too difficult;

  • Scenario one is that sales people build relationships with the procurement people in their target prospects and the engagement process is then driven by the procurement rules.
  • Scenario two is built around the idea that the role of the sales person is to engage long before a procurement process has begun. That engagement will commence with the user community and the financial people, then the procurement people and other stakeholders who might have a say or an interest in the decision that will be made.

Scenario two will be familiar to anyone who has been involved in professional selling over the past 10 or more years but may be less familiar to those who have only more recent experience. It is a tried and very well tested approach that hinges on one key strategy; suppliers must engage with the prospects they are targeting before there is a requirement. The objectives can be summarised as:

  • Building relationships with those who will use the solution, once it is acquired, as well as those who will be involved solely in the procurement and decision making process
  • Use this period before procurement commences to understand the full set of issues the users are struggling with
  • Use the time to demonstrate to the potential users’ new and different ideas they may not have thought of.  Suppliers are an excellent source of information in effect providing a free source of research so the suppliers need to ensure there is mutual respect in the relationship at this point
  • The interactive nature of the relationship building process enables both the supplier and the users to influence and shape the eventual opportunity to the advantage of the user, who will get a closer fit to their real need.  This is also an advantage to the supplier who will be seen as providing thought leadership creating a shared vision of the final outcome and this will put them in a strong position when the formal procurement process commences.

We would think that scenario two would appeal to many suppliers as it leads to more business for them and more happy customers but, to enjoy the benefits of this approach, one important change in thinking needs to be made.  Many companies now focus their sales and selling efforts on working with prospects that have an actual and current requirement.  If this is your situation then you will rarely engage with a prospect before the requirement has been defined internally which means you will miss out on the opportunity to build the relationships before procurement commences.  This also means you will probably end up fighting over that last 24% of potential new business.

So, the question is; are you willing to change your go-to-market approach and modify the objectives and incentives of your sales people to encourage them to build relationships rather than simply chase already defined requirements?

In his article Richard makes the point that “Any sales training consultancy would claim that they train sales people to be customer focused.”  In most cases this is based upon the supplier’s view as to what customer focus should look like.  Real customer focus is demonstrated by those suppliers who are willing to let the end user have a say in what they want the supplier to focus upon and how (part of the Identify stage).

In summary; our current experience demonstrates that the optimum go-to-market model for a supplier in the 21st century is a proactive outbound strategy designed to engage widely across the prospect organisation before the formal procurement process begins.  In working with the user community the model should be focused on demonstrating the Unique Value Proposition the supplier can deliver but that UVP should be arrived at cooperatively with the prospect rather than being assumed and imposed by the supplier.

This is a simple but powerful approach to supplier/customer relationships that we know works – if you haven’t already, why not try it?

How the Customer decides

Last month we defined a number of terms we will be using through this series of articles. Two additional terms are Decision Making Unit (DMU) and Decision Making Process (DMP).

“It is better to listen in order to understand than to listen in order to reply.” ~Unknown

“It is better to listen in order to understand than to listen in order to reply.” ~Unknown

The DMU identifies all of the people who will be involved in making the decision whether to buy what you are selling. The DMU includes people who are not directly involved in the decision, but who influence it because their opinion is sought and respected.

The DMP defines the steps, stages and processes the prospect uses when making a decision on a new purchase. Examples will include their rules for selecting potential suppliers, what form of response they expect from you; written proposal, response to their tender document, presentation, references, etc., how they will create a short-list, how they will make the final decision, and what criteria will be used in making that decision.

A basic rule if you want your selling efforts to be as productive and effective as possible;  ensure you understand the DMP and that you get to know the DMU at an early stage in the engagement with new prospects.

Be aware; anyone you contact at a new prospect could be a part of the DMU or may be a respected influencer.

New Year: New Broom?

Be SMART with your resolutions.

Be SMART with your resolutions.

Although not my habit I know a lot of people like to make New Year resolutions so I thought I would start this newsletter around this theme.

How was 2012 for you?  I have asked a lot of people this question in recent weeks and almost all of them said something like; tough, tight, difficult, delayed, etc.  I found it interesting to hear business people, almost universally, admitting that things have been tough where their normal habit would be to put a positive shine on whatever had really happened.  So, it seems that there is now a general acceptance that the prevailing economic climate is the new normal – none of us like it but we have to accept it.

On asking additional questions I found a number of common themes and three particularly interested me:

  • A common complaint was that after what appeared to be a positive first meeting, where the prospect expressed apparent interest in the solution being discussed, nothing then happened. No response to follow up calls and no follow-on meeting. The supplier may have sent a proposal or quotation but still could not get a response.
  • Many people also reported having a sales pipeline full of great prospects but none were making decisions.
  • The buying process used by most prospects has become convoluted and drawn out.

These points interested me partly because they are real show-stoppers for anyone in B2B selling and hence are really important to solve which is why I have chosen as the main topics for this newsletter; handling objections and influencing prospects’ decision making.

A thought for you to kick-start your year – “If you keep doing what you have always done you will keep getting what you have always got”.  We have referred to this well-known quote on a number of occasions and we repeat it here as it could be the reason people are not making decisions, not getting back to you or the buying process they are using seems convoluted to you.

One quick example; if you have sent a proposal because that is what you have always done when the prospect reaches “Stage-X” in your selling process you need to ask yourself whether this is still (if it ever was) the right thing to do.  Perhaps prospects now expect something different from suppliers and therefore your proposal may fit your selling cycle but it does not fit their buying cycle.  You need to understand what the prospect expects; content, timing and sequence.

So for those whose resolution is to go on the offensive and drag yourself out of the gloom, read on

Influencing the prospect’s decision making process

The first thing to consider is whether the prospect actually has a process for decision making. When they get your proposal or quotation what will they do to systematically make a decision and to make the right decision when choosing between different suppliers’ proposals. This pre-supposes that receiving a proposal is a part of their buying process.

“It is better to listen in order to understand than to listen in order to reply.” ~Unknown

“It is better to listen in order to understand than to listen in order to reply.” ~Unknown

If you want to influence the decision making process you need first to understand it. At a very early stage in the sales engagement cycle you need to find out how they will make the decision, what you need to provide, how and when, and anything else you need to do to make it easy for them to evaluate what you are offering.

To expand on this a little:

  • In many cases today decisions are made by a number of people, we call this the decision making unit (DMU).  The people that make up the DMU will wear a number of different hats such as; user, influencer, decision maker and budget holder.  You need to know who these people are and engage with all of them as early as possible.
  • What you need to provide will be determined by the individual when you meet them.  By way of an example; if you are supplying a piece of equipment to a factory the DMU is likely to include such functions as; engineers, health & safety, facilities manager, general manager and finance director.  Each will have a different need in terms of the information they want from you; finance may want a RoI justification, H&S will want certificates and other relevant information and so on.
  • Now you know the people, the hats they wear in the buying process and what they will want to see, you need to establish what format they want the information in and what critical timings they want you to meet.
  • You need to understand the specific process they will use and key timings.  If the actual decision will be made at a steering committee meeting that is held every quarter it is obvious what you need to do.

Once you understand the people in the DMU, their relative power and interests, and the process they will use, you must tailor your selling process to mirror their decision making process.

If the prospect does not have an established decision making process you need, ideally at the first meeting and certainly before you expend significant effort, to agree on a process that will suit them, and that they are willing to commit to actually making a decision at a specific point in time.  Document this and send it to them and anyone else they have identified as being involved in the decision. From this point the process is the same as that above except you are likely to be driving the process harder than they will.

If you have sent proposals but received no decisions or feedback it may well be because you sent the proposal at an identified point in your selling process but that it was not relevant to their decision making process.  You need to go back and ask them tough questions like; did you actually want what we proposed and if so when and how will you make the decision?  This will be tough because you will have to accept that some will not turn into new business but at least you will know where you stand.