Entries from February 2008 ↓

How To Accept A Purchase Order

At last – after all your hard work the fax machine finally spit out that order you were desperately waiting for. Now you can sit back on cruise control for a few weeks and enjoy the fruits of your labor.

Not so fast. There are a few things you need to do right now that are basically the equivalent of pushing papers around; which I know we all hate. It is important at this time, however, to make sure the order is as expected and nothing changed on either end that will put the timely completion of that order in jeopardy.

Purchase Order

It doesn’t seem like there should be a problem here does it? Well, there probably isn’t, this is more of preventative maintenance. You need to make sure that all is well and as expected before you close the book on this order.

If something is wrong with the order and you catch it right now, it can usually be resolved with a quick phone call. If, however, many thousands of dollars of work is put toward completing that order and then you realize there was an error in the paperwork, tempers can flare and relationships become ruined.

We’re going to develop a checklist in this article to help make sure that the purchase order you just received doesn’t become a headache you can’t get rid of. The steps to be covered include:

  • Verify purchase order components
  • Record order in your CRM system
  • Double check delivery date
  • Issue internal job order number
  • Acknowledge receipt of order

Verifying Components of a Typical Purchase Order


This one is pretty easy. Make sure that the per unit price and the total price matches the values put forth in your quotation. If they don’t it is usually a simple mistake on their part and a quick phone call to the buyer will clear things up. I like to handle this one by calling the buyer and not the engineer – no need to give the engineer extra work to do at this point.


This is an important item. It can be months from the time you quote your work until you see a purchase order. The lead time originally quoted might not be valid anymore and you need to rectify that and set the buyer’s expectations straight. Here you need to call the buyer to fix the problem and the engineer to explain the situation. If it’s a dire need that they have faster delivery, see if your team can work weekends and overtime; but never promise a delivery you can’t meet just to make your customer happy in that moment.

Payment Terms

Big powerful companies will often ignore that you quoted “net 30 days” and put “net 60 days” on the order. Your call what to do here. Typically there isn’t much you can do to sway their position; if you can live with it, I’d let this one go. Then the next time you quote it, build the extra 30 days of extended pay into your quoted price (i.e. 30 days of interest on the total proposal value). If you get questioned about the slight price increase, tell the truth and stand your ground.

You might also see something like “1.5% net 10” that means that they can deduct 1.5% of the total contract value if they pay within 10 days of receiving final delivery of your product – or receiving your invoice. I have a big customer that takes their net 10 days discount after about 90 days on terms of net 45. And you know what? There isn’t a darn thing I can do about it. Ever hear of dancing with an 800 pound gorilla? You can’t lead them.

If their payments stretch well beyond even their stated terms you can tell their buyer. “Look, I accepted your terms over our’s because I value your business, but we just can’t afford to finance your projects like this anymore. If you won’t pay on time, you’re going to force us to put a payment penalty clause in our next contract with you.” Act humble and almost embarrassed that you have to say this – don’t be rude or act mad.

Contract Terms

Typically when you quote out work, you attach your general terms and conditions to it. When you receive a purchase order, it typically comes with its own set of T&C’s, as they’re called. Again, not offering legal advice here, but you need to be careful here. When you acknowledge and accept their order, it can mean that you accept their T&C’s over your own. Even if you don’t acknowledge their order, a lack of action on your part may imply acceptance, so you’re still in the same boat. Bottom line here is to review the attached T&C’s and talk with your attorney about how you should handle competing terms. I usually state on the quote that our T&C’s supercede anything that the customer puts forth in response.

Shipping Method

Typically a quote goes out for the price of goods and does not include shipping. If this is the way you quote, make sure that’s clear on your quote so that the buyer isn’t surprised when there is an adder onto their invoice that puts them over some predetermined spending limit. Also, oftentimes, your buyer will have an account with their preferred shipping vendor. Take heed what that is and make sure that you use it come shipping time. It might not seem like details such as this should fall into your responsibility as a salesperson – but it is your responsibility to ensure that the buyer’s expectations are met at every step of the sales and order fulfillment process.

Order Verification

It is common that a purchase order will come in with a blank box calling out for your signature and return as proof that you received the order and accepted it. This starts the clock on the delivery promise. This is the time and place to rectify any discrepancies between your quotation and the order. Each company is different on how they handle this step; I prefer to have the quality manager sign off on this rather than sales. Doing so provides a safety check to make sure that you’re not missing something.

Record Order in CRM System

Even if you have to use a combination of Excel and Outlook, you need some type of customer resource management (CRM) system, or at least a contact management system. For small to medium size companies, and even large ones that isolate sales from the rest of the operations, software such as Act! and SalesForce.com are a perfect solution. There will be other white papers to follow on how to effectively use these tools, but an important component is to record when you get an order against each quotation you send out.

After several orders come in, you will begin to decipher patterns in your customer’s buying behaviors. Do they buy once every six months? Have their quantities been going up? Down? Dig in and understand what’s going on. If they often complain that your twelve-week lead time is too long and you’ve uncovered a pattern of orders every nine months – call them five months ahead of time to secure an order and make your lead time seem acceptable.

Sometimes you have to help manage your customer’s business for them.

Double Check Delivery Date

As mentioned above, one of the very first things you should do when a fresh order comes across your desk is to verify that you can still meet the project delivery date. Sometimes, the engineer will call and tell you that an order is on the way. You patiently wait for the fax to come through to start the work (and the clock). The customer, however, probably started their clock when the engineer blessed the order and sent it to his procurement department, which can take weeks to actually issue the order. This lost time is not your fault, so catch it and fix it now.

Issue Internal Job Order Number

Every company handles this task differently. Make sure that you get your new order an internal job number as rapidly as possible so that production is aware of the order and can start fulfilling it. I typically recommend sending production a heads-up that the order has been received and they will see it tomorrow (or however long it usually takes to route through your system). Again, take this task as your responsibility.

Verify Receipt of Order

After you’ve reviewed the T&C’s and double-checked with production on the scheduled delivery date, you’re ready to acknowledge the order with the customer. As I’ve mentioned above, executing this step relays to the customer that you accept their order and all terms attached or included with that order – so be sure to review it carefully.

If there are items in the order that you don’t agree with, you have two options.

  1. Call the buyer or engineer and tell them (a) what you have a problem with, (b) why you have a problem with it, and (c) how you propose to rectify the issue. An example would be that you have a problem with the delivery date of April 3 because you quoted a four week delivery after receipt of order and today is March 30 and you’d like to have them change the date to April 30. After agreement is made on the call, send them a confirmation email detailing the call.

  2. The second option is to fax or email the order acknowledgement to your customer with your exceptions clearly stated in writing. An example would be “Your order number P1234 has been received and [your company] accepts it with the exception of the delivery date. A delivery date of April 30 will be accepted.”

I’m not a fan of option number two, although it is a more popular option for certain. The problem is two fold. You miss out on an opportunity to talk with the customer and understand why the order was wrong in the first place. And secondly, it seems a little legally unclear if your stated exceptions are now the agreed to terms, or if the customer needs to reply back in writing that they accept your modifications.

Negotiating With the Bean Counters

This post focuses on dealing with the business and financial people in your prospective company (i.e. the bean counters). You’ve been working with the key technical people all along by following the preceding posts in this series. Those technical contacts helped you get your foot in the door and develop a practical and affordable solution and accepted your proposal the day it was delivered. But they seem to always lose their clout at this layer in the sales funnel to the powers that be.

Negotiation layer of the sales funnel

No matter how hard you work to uncover all the right people in the buying process up front, a bean counter always seems to slither in on you at the last minute. You go from the euphoric high of getting ready to close a major deal, to the basement low of realizing you might have to start over from scratch again.

The problem here isn’t the bean counters per-se. Rather the problem is what they seem to stand for. They typically don’t care how technically eloquent your solution is. Their measure of success is simple. They’ll tell you ROI this and ROA that and payback this and lifetime costs that. But I’m convinced that they get rewarded by a more basic and simple formula.

quoted price – negotiated price = saved dollars

They want to be able to tell their bosses that they “saved” the company $25,000 on this deal. And they did it by beating down their supplier; not by re-scoping the statement of work – that would be way too much work.

Negotiation Tactics

Negotiation by itself is not a dirty word. In fact it’s a necessary part to any healthy relationship. I often negotiate with my wife about where to eat dinner on Friday night – although I never seem to win that one.

I’m going to break up the strategies based upon where you are in the sales cycle even if some of the strategies get repeated for different cycles. This way you’ll know the most appropriate time to use them.

Sales Cycle Scenario 1: Bean counter is in the technical meetings

This is really the best situation and what I preach is to integrate the bean counters into the mix from the very beginning. This way they will be educated in the economics of the situation along with everyone else. You will get less overall resistance and greatly compress your selling cycle.

The advantages to this strategy are numerous; unfortunately it can be difficult and time consuming to pull off. Here are a few of the pluses to working this strategy.

  • The buyer can voice incremental cost concerns as the solution is developed and you can deal with them piecemeal.

  • You can educate the buyer on the economical and technical repercussions of each decision point along the way. The beauty of this is that you will lay out the technical consequences to the buyer in front of the engineers.

The engineers will suddenly become your ally and fight to keep the best technical solution, regardless of the cost.

  • With the engineers fighting on your side, you can revert to a more humble and helpful role that only wants to do what’s best for their company. After the engineers pitch their case and things quite down, look directly at the buyer – and only at the buyer and ask, “I’m glad this discussion came up now rather than later. The original solution is certainly the best and what I would recommend, but if you can get away without that level of quality/service/purity we can work toward a cheaper alternative. How would you suggest we proceed?”

  • Finally, there won’t be much to negotiate at the end. You and the buyer have been keeping a tally of all the associated costs along the way, now you just have to sum them up. How can they argue with that? They can’t.

Sales Cycle Scenario 2: Bean counter is brought in at the end to negotiate price

This is the more typical scenario that you’ll find yourself in. You’ll work with the engineers and come up with a smashingly good technical proposal that will “sail through procurement” only to get a call saying that “there’s been a snag in the purchasing department, can you come in for a visit?”

There are a few things that you can do beforehand to better prepare yourself.

  1. Call your high-level engineering contact and do some detective work. Does she know what the situation is? If it’s price, what technical features are most important to her so that you’ll know what features you need to keep in the proposal? Can she join you in the meeting? Is this typically done? Has anything changed since the last time you spoke to her?

  2. Call the buyer a few days before the meeting and ask what specifically they want to cover. Try to ask a few specific questions about your proposal. Your goal here is to see if they’ve even read it. Many times, they haven’t. That’s killer information that means this is just a typical negotiating step and you can play hard ball.

  3. They will most likely try to make you break up your proposal into line items so they know exactly what everything costs. This is a pain in the butt to do and you can fight it to some extent. “I can’t really do that because this price is based on our costs of doing all the items in one project. If things need to be broken out in a menu fashion, it will substantially add to the overall costs and it will take me some time to put that together. What portion of the proposal seems to be causing you trouble?” Even with that, make sure that you know the line item costs relative to the overall project costs. If there is something that they deem unnecessary, know what that would do to the price and delivery schedule – as well as its impact on the technical merit of the project.

  4. Research your competition. If you don’t already know, find out how your product or service is superior to the competition. Don’t ever bash them, but concentrate the talks on areas where you know you are strong.

  5. Role play the meeting with someone at your organization. Have them play hardball and ask you difficult and even unfair questions.

  6. After the meeting, update your engineering contact with exactly what happened and what the consequences of that meeting will be.

The main strategy to follow here again isn’t much of a tactic at all. You simply need to have a conversation with the buyer and take their temperature. What are his main concerns? Get them all out on the table – don’t let him talk about each one individually. Start the bulk of the meeting off with:

“Can we please list all of your concerns out on the whiteboard? [physically walk up there right now] I’ve found that getting everything out in the open from the start will let us both focus better on moving this program forward.”

You then want to make them rate their issues in order of importance. You should know your rating scale also, but keep that to yourself for now.

What did we just do here? We took about 70% of the negotiation tactics that a buyer can use against you off of the table.

The white board issue strategy really is a great way to take back control of what can be a sticky situation.

Sales Cycle Scenario 3: Secret bean counter is a surprise near the end of the negotiation

I consider this negotiating in bad faith, and I’m not afraid to tell them that if things get hairy. What usually happens is that you’ll get your deal worked through engineering and the identified bean counter. Everyone seems happy. Engineering is excited to get going and the bean counter seems relieved that he can move on. And then all hell breaks loose.

The mystery man comes into the picture, usually two days after you think the deal is going to close, and says that they can’t come up with the money and if you want the work, you need to drop your price by 5%.

And my response: “Mr. Mystery Man, I certainly wish you would have been in all our previous meetings to voice your concerns. I have a few problems with your new position. First, I was negotiating in good faith and offered the lowest possible price to your company that makes this business possible for my company to accept. And secondly, your seemingly arbitrary 5% discount certainly implies that I have excess margin built into the price. I can assure you that our price is based on cost and not excessive margins. If my final proposal is not acceptable, I’m afraid we’ll have to walk away from the business.”

Sales Cycle Scenario 4: Bean counters beating you up at an annual review

This is quite common when dealing with large companies. They will meet with you on an annual basis and tell you that you need to decrease your costs by 5% or you risk losing their business.

There are two ways to go here. The first way, which you might expect me to recommend, is to tell them to shove off and that you not raising prices is actually like you decreasing prices because you didn’t adjust your prices for inflation. I’ve gone as far as graphing consumer price index (CPI) data against my historic prices to show that my prices have effectively fallen over the past few years. The problem is that while this sounds good on the surface, it hardly ever works. People just don’t buy it. So that’s why I don’t do it much anymore – although there are certain times it can be effective.

A second and usually more effective strategy is to anticipate this situation (do your homework and find out if they do it to other vendors) and build a case over the year to hold in your quiver for your annual meeting. During the year offer the buyer that you’re dealing with possible ways to reduce costs. There are always ways to do this, even if it means purchasing capital equipment.

I struggled with how best to write this strategy up. I’m afraid that in reading this you will think that it’s high level talk and not useful or practical. I work quite hard to make sure that my strategies are practical and can be implemented tomorrow. The feedback I’m getting from folks is that they don’t have these types of cost savings. I can tell you that in 100% of those cases that we explored further, we were able to identify numerous cost savings and put together a very effective summary document to take to the annual meeting. Specific examples can be found in the accompanying article to this post.

At any rate, once you have your litany of cost saving suggestions listed, put together a professional summary document to take with you to the meeting. Never send it ahead of time; you need the element of surprise here.

Positioning Your Proposal

Here is a layer where you really begin to see the fruits of your labor from following our Sales Funnel Selling method over the majority of other sales philosophies being taught and practiced out there.

Solution Evaluation Layer

You can almost cut this layer completely out of the funnel all together. Your prospect already knows just about everything in your proposal. Heck, she helped write it. If she didn’t, please review the post “Developing Winning Sales Solutions.”

We’re going to continue working with Sally the Technical Consultant who is at the top of the technical pecking order within her company.

At this point in the process, you should be fairly confident that your proposal is going to be chosen as the winner. If you aren’t at least 75% sure, something went wrong somewhere along the trail.

You role now is to track the proposal and know who all is reviewing it and how much their input is worth. You should already have uncovered that information by following the previous articles. If not, you have some catch up work to do. But other than keeping tabs on the reviewing process and answering any last minute questions, this layer should be fairly painless.

The Waiting Game

Just because you’ve made connections with all the right people and your gut tells you that you’re proposal is exactly what they need and want doesn’t mean that in two days a purchase order will show up on your fax machine.

Oftentimes, someone in the review line wasn’t uncovered in the beginning. This is usually someone in the buying line, like a purchasing agent or, the even more fearful, purchasing manager. They know how to play hardball and don’t really care how close you and Sally the engineer have become.

It can be hard, very hard, not to rush in and try to push the proposal through; “But Mr. Purchasing Manager, Sally said that this is what you need.” Trust me, this won’t work, they will smell your desperation a mile away. Your attitude needs to be; “I’m sorry I didn’t include you in the earlier meetings Mr. Purchasing Manager, please feel free to ask me any questions that Sally can’t answer for you.” If you’ve done your job and started at the top of the pecking order with Sally, she will have some serious throw weight and Mr. Purchasing Manager will already be feeling the heat.

Stay detached from the process. By this I mean, after the initial call to check in, try to just sit and wait. If it’s near the end of your quarter, this can be drudgery – and the buyer knows it. Be cool, they have a deadline too. Let’s go through a basic step-by-step procedure.

Solution Evaluation Process Steps

  1. Get the prospect on the phone and tell them that you are clicking “Send” right now to submit your proposal and would like to remain on the line to make sure they get it and that it opens up – if they have the time to spare at that moment.
  2. After they say that they have received it, ask them if they mind opening it up to make sure each section is what they expected.
  3. Literally go through each section and get their buy off that it is what they expected. This includes price, delivery, and payment terms. There should be no surprises here, but you need to make sure that your contact is prepared to be the champion of your proposal in your absence.
  4. Ask when you could contact her again to see how the review process is going. You should already have a pretty good feel for who will review it, but you might not know how long this typically takes.
  5. Reinforce your willingness to answer any questions and volunteer to come out for a site visit to talk about the project.

While that all sounds fine and dandy, Sally and her buyer may only be the beginning of the chain of command that you need to wade through. Future posts and the article that accompanies this post delve into those details.

Calculating Your Product’s Worth

This post focuses on strategies to dig into your prospective client’s organization to determine what your product is worth – how else will you know what to charge? The key to optimizing profits and sales is to put a proposal in front of your prospect that exactly reflects what they think you and your product are worth. If you over price, chances are that you’ll be pushed aside in favor of a cheaper product. If you under price, you run the risk of diluting your brand and looking like a second-rate operation. So why not just ask them what your product is worth…

You: “Do you want to buy my fabulous new gizmo?”
Prospect: “How much does it cost?”
You: “Well, what’s it worth to you?”
Prospect: “What the heck kind of question is that!!”

As can be seen from the above fictitious discussion, you usually can’t come right out and ask a prospect what your product/material/service is worth to them. It puts both parties immediately at odds and strains further discussions.

Propose Solution Layer

Better yet to get back to our engineering roots and follow a more scientific approach to uncover a product’s true worth or value. The first step in the process is to determine who the stakeholders are in your prospect’s company that will be affected by the purchase of your gizmo. Typical stakeholders include (1) the engineer you’re dealing with, (2) her manager, (3) a purchasing agent, (4) the chief financial officer (CFO), and possibly (5) the CEO.

All too often we, as salespeople, work with the engineer and never ask how the ultimate purchasing decision will be made – big mistake. You need to completely understand the prospect’s buying procedure to ensure that everyone in the chain understands the value that you’re bringing to the project. Not knowing this data could lead you down a six-month path selling to an engineer, only to have a purchasing agent strike down the deal as soon as he hears about it.

Once you know the players in the chain, you need to understand the motives of each player. The purchasing agent, for instance, may only be concerned with price, the CFO may focus on financing options or return on investment, the engineers are usually concerned with quality and service, and the CEO may have politics in play that are pushing him toward a particular supplier.

Of course all these individuals house a different amount of leverage, or pulling weight, at the prospect’s company. Would the engineer tell the CEO that he is wrong and ignore a direct order not to buy your product? Doubtful.

In order to track these different weights, a variable is assigned to each stakeholder’s view of the product’s worth and the relative weight each stakeholder carries in the purchasing decision (the total pulling weight, must sum to one).

Engineering Gobbledygook

The following table lists the needed input from the respective stakeholders.


Perceived value

Relative pull




Engineering Manager



Purchasing Agent










Value, or better yet, perceived value, is the sum of the weighted values of the stakeholders. The specific Perceived Value (PV) for our situation follows; of course it can be generalized for any combination of stakeholders and relative weights.

PV = (ep*ev) + (emp*emv) + (pap*pav) + (cfop*cfov) + (ceop*ceov)

The prospect company is most likely to buy when the collective perceived value is greater than or equal to your product price (PP).

PV >= PP

Developing Winning Sales Solutions

There comes a time when you hang up the phone or leave a sales call and you have to go to your technical team and tell them what you signed up for. After being called crazy and subsequently promising that you won’t do it again and that you’ll have someone from engineering come with you on the next call – you and your team come to the realization that you need to solve this problem and the fun begins.

Develop Solution Layer

The arena of problem solving and group interactions is way beyond the scope of this article, or the series for that matter. But what we can offer here are tips on high-level things you should be doing to help ensure that whatever solution you find and propose is chosen as the winner by your prospect.

The journey from getting a prospect to be interested in your solution to having them cut a purchase order against your proposal can be a trying experience to say the least. Just the thought of typing up a jumbo proposal with all the gory details can take months of preparation. If all that work is for naught, you lost not only that business, but all the opportunities that you could have been working on instead. Economists call these opportunity costs.

We preach the creation of a “zero-surprise proposalTM” for complex sales. This means that by the time your prospect gets the proposal in the mail, she already knows what it says – and she certainly doesn’t have to flip to the back page to find the price.

The trick to creating this zero-surprise proposal is to involve your prospect in the solution development stage. Getting her input has two major benefits. First, you’ll be able to ensure that your solution satisfies the technical and business issues that she’s mostly concerned with. She will know and understand the economic issues of implementing any suggestions that she provides you with. And secondly, if she provided input into the solution, she now has ownership and all the pride and attachment that come with that. This is a bond that your competition will almost never have – and never be able to break.

So the problem to be solved is when and where to bring your prospect into the solution design stage of the proposal to help make sure that your business case matches up with your client’s business case needs. They should ideally meet at a single point of agreement and information should flow between the two organizations as these business cases are developed. In fact, in the end, the two business cases should look as if you cheated off of each other.
Business case matchup

Melding Engineering and Business Brains

How you handle integrating your prospect into your solution brainstorming sessions can be quite a delicate situation. Is she technically competent and ignorant of business issues or is she a buyer with no technical knowledge? The way to handle it, is to create a team of participants from the prospect’s organization so that every aspect of the decision is represented and enough buy-in is fostered to make your ultimate proposal rise to the top of the heap.

The need to possibly coerce a team of volunteers to continuously evaluate your proposal is why we stress to start as high in the organization chart as you possibly can when prospecting out your target (see “Getting the Initial Sales Appointment” for tips on doing just that). Let’s say that you started up a relationship with the CEO of a medium size business and you were trying to sell your modeling consulting service to them. He’ll tell you to talk to Sally in engineering because “she deals with that stuff”. Thank him for that lead and ask if there is anyone on the business side that you should also be talking to. “Our controller Sam takes care of all that business”. There you have it, you need to tie in Sally and Sam, and you can bet that they both will play ball with you – because the CEO said so.

You now have the necessary players identified and committed to at least review your proposal along the way and offer their incremental insights.

It’s like you have an insider pulling for you.

The next step is deciding how and when you want to roll them into your process. Too early and you give them too much control and information about the solution. Bring them in too late and you run the risk of them telling you that you need to scrap everything and start over in a different direction.

Present your two or three proposed paths and ask them which they prefer and why. Would they change anything? Do they understand the different economics at play between the two options? Would they be available for conferences as the ideas are further defined? Do they see any technical, financial, or political constraints that would be a barrier for either of the proposed solutions? And so forth.

Be careful not to patronize them here. Let me be clear that you are not integrating them into your team simply to get a soft advantage when the award stage comes to pass. You are using them to help design a solution that will best serve their needs. This is having high intent and their best interest at heart. If you are using them to play games on the surface just to get a feel good advantage, they will see through it and your plan will backfire. No one knows the issues better than them, so they are a great resource to help solve those issues.

NOTE: A word of caution here regarding intellectual property (IP). A downside to bringing in the prospect during the solution design stage is that they can possibly claim that they helped you design the product or process and fight you for the IP. Typically, you want to work on the proposal on your own dime to make it a little more clear who owns what. But when they provide input, it can get messy. I’m not allowed to give legal advice here other than to say that if you think that one of your solutions is a novel method that could be patented or you want to keep a trade secret, consult with an attorney before bringing your prospects into the loop.

Ask the Right Sales Questions

In the “Calculating What Your Product or Service is Worth” article, we talk about how important it is to get a keen understanding of what your prospect, and their internal buying team, really thinks that your product or service is worth.

How do you actually get this understanding?
By asking the right questions in an open and honest format.

It is your duty to get to the heart of your client’s needs and wants, and knowing the difference between needs and wants. This article assumes that you’ve read and followed the article titled “Getting the Initial Sales Appointment” in that these sets of questions take place either during or after your initial meeting – not during a cold call.

Uncovering facts in the sales process

There are lots of books and papers out there offering suggestions for discovery questions. “Ask open ended questions”, “You need to ask questions to qualify your prospects”, and “Don’t ask questions unless you know the answer” were the top few results on a recent Google search. I thought I was actually on to something with number four when it started out saying “good sales questions is the single most powerful sales tool”, sounds good, let’s see what else they say; “A good question from your salespeople helps focus and shape the direction in which your customer’s mind works.”

If I wasn’t sure that I had a duty to write this series of article’s before I got to this point, I’m certainly sure now.

There isn’t much of anything out there giving you solid, concrete advice and examples of what questions to ask and when to ask them.

Questions and When to Ask Them

I think the best way to give truly meaningful content here is to list sample questions for the various phases of the sales process and then provide detailed examples in the accompanying article and future posts. I originally wrote this section with the format of a sample question followed by my philosophy for asking that question, and I was up over twenty pages of great information that no one would ever read. So I trimmed my philosophies down to a few words in brackets after some of the questions.

It’s easy to fill page after page with questions for each of the below timing points. In fact, it’s a piece of cake. What’s far more difficult, but immensely more useful, is to boil all those questions down into a few in each category that you can actually remember and use in practice.

Questions to ask yourself

  • Why would they ever accept a call from me? [figure out your in]
  • Do I truly feel that my solution is the best choice for them? [if not, recommend a better choice]
  • Am I moving forward with high intent and my customer’s best interest at heart, or am I succumbing to quarterly numbers pressure?

Questions to ask your prospect before your first meeting

  • What are the key topics that I could hit on to make certain that this is a beneficial meeting for you?
  • Will there be anyone else in the meeting? [depending on the complexity of your sale, you could push here to have all the necessary people in the first meeting, I like to have them in the second meeting so I have more background information, see below]
  • I typically just sit and have an open conversation, but I can prepare a formal presentation if you would prefer that?
  • What could happen at this meeting that would make you think “wow that was a fantastic meeting?” [this question is a little hokey, but it could give you some real insight – I don’t use it all the time]

Taking your prospect’s temperature questions

All you need to do is have a conversation with your customer and discover together the best solution for them going forward. If it’s you, fantastic. If it’s not, that’s ok too; you’ll be at the top of the list the next time a problem comes down the pike.

  • Before we get too buried in detail, do you mind if I ask about your history with the company? [you’re looking to sure up buying power here and political power]
  • Rather than going into our services and solutions, I’d love to start off with you actually explaining the current situation if that’s ok? [here they will tell you something like, “well, we make this part with 14 other parts and the welding costs are out of control” – make sure you know the real underlying issues before leaving this bullet, use the general probing questions below]
  • Can you please explain your current solution to this issue?
  • And what concerns do you have with the current way business is done?
  • If you could change one thing about the current solution what would it be? [this and the two previous questions will uncover who your entrenched competition is and how you can position yourself to be better]
  • Are you looking at any other solutions other than us? May I ask what type of solution those are?
  • Do you have a feel for the real life cycle costs of {current solution}? [Here is where you start to get a financial understanding of your competition and where you need to be in order to compete]
  • As we go along here today, I’ll be taking notes to prepare a life cycle cost analysis of what we can provide. Is that something you could go over with me, assuming we reach a decision that this makes sense to move forward? [wow, we now have their pressing problem, how they currently solve it, where their current solution fails, and an idea on how to be cost competitive – it’s almost like insider information, and you weren’t sneaky or slimy about getting it]

Moving forward questions

At this point in the game you have a pretty good feeling that your solution is the best choice for your prospect and you need to understand how their company works so you don’t waste your precious time and energy on non-productive tasks.

  • Well Ms. Prospect, from my side, it looks like we might have a workable and economical solution for you, would you agree with that?
    • [if yes] Great, then do you mind if we talk a bit about your business process and how we would fit in?
    • [if no] Ok, can you please help me understand where you think our solution is lacking?
  • How soon would you be looking to implement a change such as what we’re suggesting?
  • OK, could you give me a sense of what type of milestones you’d like to reach during the implementation phase? [this gives you insight into how to break up your eventual quotation to them]
  • Would you consider this a priority issue and do you think others in the evaluation/buying process would evaluate it likewise? [need to know who all the players are]
    • OK, who are all the others that would be in on this decision? [push them here, did they think of legal, accounting, maintenance, etc.]
    • Could you help me sketch out an organization chart so that I can best understand what this process will entail?
    • Who do you think we should bring in from this list for the next detailed meeting?
  • Could you walk me through a typical evaluation and procurement cycle for something like this? [make sure that the names mentioned here coincide with the names gathered from the previous questions]
  • What do you see as your greatest risk and benefit with solving your current problem?
  • And what do you see as your company’s greatest risk and benefit?

General probing questions

These questions can and should be used during all phases of questioning to help you dig deeper and gain a better understanding of your customer’s needs. If asked in a genuine and sincere manner, they will not be offensive or pushy.

  • I think that this is a key issue here, can you help me understand this a little better?
  • What exactly do you mean by that?
  • Do you mind if I give you my understanding of {that issue} to make sure that we’re on the same page?
  • As you may know Mr. Prospect, I’m an engineer by training, one of our lean mantras is to ask five ‘why’ questions when we are dealing with a key issue. I feel that X is a key issue here today and would like to ask a few why questions about it. [literally just ask why, why, why 5 times to get to a root cause]
  • Can you give me an example of that?
    • I see, would it be possible to have another example?

Questions to ask on a continuous basis

These are questions that you need to keep track of at all times and double check answers from various people with each other to make sure that you’re getting the whole story. People won’t normally lie to you (well buyers might), but more often than not, some folks just don’t know exactly how things work in their own company so you have to put the puzzle together for them.

  • Would you agree that we’re at step X in your evaluation and procurement process?
  • Has anything changed in the buying process that I should know about?
  • Anything I should have asked, but haven’t?

Account maintenance questions
As I like to preach, don’t take this section for granted – stay in touch with your current customers. They’re your best prospects for future business.

  • Was everything delivered/installed/reported to your satisfaction? [right after delivered]
  • How is everything working out? [after installation or enough time has elapsed to implement your recommendations]
  • Is there anything that you wish we would have done differently?
  • We’re putting together case studies to showcase some of our projects. Would you be interested in participating in a case study with us?
  • Do you think this solution could transfer across into your other divisions? [start churning new business only after your initial solution is deemed successful]
  • Are there any other areas in your business that you could see our technology being valuable? [keep churning]

Getting the initial sales appointment

After reading “Where do sales leads come from?” you no doubt have a threatening large pile of leads – now what are you supposed to do with them?

The most obvious answer is that you should get in touch with them and setup an initial meeting. And in fact that obvious answer is the correct answer. This post will begin to give you the tools to get your foot in the door. The accompanying article will get your entire leg in the door.

It seems that at every layer in the sales funnel, you can say that you’re at the most important layer. But getting that initial appointment is truly one of the most important steps in the sales process.

Initial Communication Layer

It should be noted here that the goal of this meeting, once we get it, is to disqualify the prospect as rapidly as possible. Yes, you read that correctly, disqualify. Let’s talk about that for a minute.

Using the selling techniques that we’re developing here, you will soon have more leads and repeat business than you can handle.

As such, we need to make the best use of our precious time. And that is accomplished by catering to our repeat customers and focusing only on the best fitting prospects. This may seem counter-intuitive, but prioritizing prospects will save you time and make you more money in the long run.

It’s time to put some meat on the bones of this abstract idea of getting a lead to invite you to do a sales pitch. Going from the pile of leads to setting up a meaningful meeting is a five step process.

Prioritize prospects

Even if it’s not politically correct to say it, not all prospects are created equal. There are countless people out there that are more than happy to slowly bleed technically competent salesmen out of all their knowledge and then simply walk away as a smarter jerk and leave you hanging. You need to rank those leads.

Sales appointment flow chart

The first step is to see if you know any of the companies in the list – this is a great way to pull out top prospects and dump a few losers. Next look at what industries the leads come from. Maybe you want to steer away from the automotive world because of the oppressive cost pressures or perhaps you want to get in good with academia to get your name in publications. Finally, look at your prospect titles and choose accordingly.

Gather background information

Even with a manageable stack of leads now at your fingertips, you’re still not quite ready to pick up the phone and try to close a sale – although many so-called professional salespeople will do just that. What we’re going to do now is become somewhat knowledgeable about our prospect’s company and industry. You can become knowledgeable by looking at the prospect’s Web site, searching for news articles and press releases, reviewing annual reports and talking to others who have insight into this company. We’ll cover many ways to do this in upcoming posts.

A word of caution is in order here, as I’ve seen it happen multiple times. You need to be careful that you don’t come under the illness know as “analysis paralysis”. This happens when you feel like you’re doing meaningful work, but all you’re really doing is printing out Web pages and reading stories and filing papers. Always ask yourself if what you are doing will help you make that initial contact. If the answer is marginal, sit down and make the call instead of wasting any more time. This is one of the biggest mistakes that I see salespeople make.

Make the contact

You might already have the right phone number of your contact from your lead list. But many times your only lead is that you think you could sell into, say, Wal-Mart with your new inventory tracking technology. You can usually guess the title or at least the department of the right person to talk to.

You want to start the contact off at the highest practical level that’s possible.

You’re not going to call on the CEO of Wal-Mart, but Susan, a VP of Logistics would be a great fit. Typically when you start high, the end result will either be an excited buy-in right from the start, or at least a referral like, “Talk to Larry he’s in charge of innovative logistical technologies.” Starting high has major, major benefits because now when you talk to Larry, you can say “Susan thought that our new tracking technology was interesting enough for further consideration and suggested that I contact you to see how we should move forward.” Well if Larry’s boss said to look into it, you better believe Larry will look into it.

There are a lot of tricks to finding and making the initial contact; here are a few of them.

  • Google them – what more needs to be said about this one?
  • If your prospect is a technical contact, conduct a journal article search. If they were the lead author, their contact information will typically be contained within the article.
  • Search on-line networking sites such as www.LinkedIn.com and www.Jigsaw.com These two sites are worth their weight in gold and cover tens of millions of contacts.
  • Call the base number and change the last two or three digits. A typical corporate number is 123-456-7000; what you want to do is call 123-456-7xxx, until someone in the company answers. You respond “Oh, I’m sorry, I had this as Steve Smith’s number, is this extension 7xxx?” They will respond with the correct number. Sneaky? Yes, but terribly effective.
  • Search on “(123) 456-7” Oftentimes, this will pick up at least some of the contacts in the office you’re targeting.
  • Nothing yet? Well a last resort is to call the main number and deal with the gatekeeper. Here’s how to do that: “Hello, this is Joe Schmo from Schmo’s Industries, I was wondering if you could help me find the person responsible for purchasing widgets.” If you read up on sales, most texts will say that this approach is crazy and should never be used. I think that’s bologna, and I’ve used this exact introduction to reach countless prospects. There are very few hard core gatekeepers anymore, most places have a central receptionist/secretary that serves twenty people or so – they’re too busy to be guarding gates. See the accompanying article for a more formal guide to this technique.

Disqualify, disqualify, disqualify

You made the initial contact, congratulations! Now do your best to try to get rid of them. What?? You can spend your entire professional life consulting with and selling to prospects that will never buy one thing from you. You can’t waste your time here.

So the trick is to try to disqualify prospects without coming off as rude or insensitive. Because if they happen to be qualified, you don’t want them to think you have the tendency to be a jerk. You can easily walk this thin line by being upfront and letting the prospect know what you’re doing.

Set up meeting or phone call

So now you’ve made the initial contact, and haven’t been able to disqualify the voice on the other end of the line. Let’s get them to agree to a meeting or at least another phone call.

“Well, Mr. Prospect from my side it would make sense to set up a meeting and talk a bit more about a potential project here – would you say the same from your point of view? [Yes] Great! I’m on an east coast road trip in three weeks; would you be available say on the 14th around 2:00 PM? [Yes] Fantastic! Is there anyone else in your organization that we should bring in at this point to participate in the initial talks?”

Good job! You’re now in a position to take your pending sale to the next layer.

Where do sales leads come from?

Sales leads are so important that they occupy the topmost position in the sales funnel. They take center stage in the New Opportunity layer. Sales without leads is like flying without a plane – it’s possible, but it sure makes the journey much more of a challenge.

New Opportunity Layer

As I was writing this post and the accompanying article, it quickly became apparent that I could fill an entire book on this subject alone. I needed to pare it down to something digestible and understandable. I ended up breaking up the process of generating the leads into two groups. Group one contains methods where you go out to gather the leads, and group two contains methods to lure leads to you. I’ve tried to limit it to one sentence for each bullet point. The accompanying article to this post is nine pages long and chocked full of practical advice on how to put each of these prospecting methods to use.

Prospecting on your own

These methods are where boys become men and girls become women. This is the nitty gritty of uncovering new business opportunities, chasing them down and converting them into sales. For those of us that love the thrill of the hunt, this can be very exciting and rewarding.

  • Contacting article authors
    An absolute favorite technique of mine is to track article authorship in subject areas that I’m interested in. Authors are almost always eager and proud to discuss their work with anyone.
  • Contacting press release sources
    In addition to technical articles, you should also feverishly track press releases of your competitors, customers, and prospects.
  • Internet networking sites
    Sites such as www.LinkedIn.com and www.Jigsaw.com contain a tremendous amount of useful contacts.
  • Trade show exhibits
    Books and more books have been written about how to exploit trade shows to get the most benefit so I don’t want to get too into it here – perhaps I should create an article just on trade shows.
  • Conference talks
    I talk a lot about becoming an expert in your niche area and there’s no better way to display this expertise than by giving technical talks at relevant industry conferences.
  • Author papers
    Writing papers takes time and expertise, but if you can get an article published in a peer-reviewed journal, you will gain instant credibility that you can leverage into initial meetings.
  • Issue press releases and newsletters
    I’m a firm believer in the power of press releases and newsletters. The key here is to not make it sound salesy. It should be informative, lighthearted, and possibly highlight case studies if you customer will allow it.If you’d like to see an example press release and newsletter, please email me at Eric[dot]Bono[at]EngineersCanSell[dot]com and ask for a free sample – I’d be more than happy to send you one over.
  • Attend industry conferences
    Attending these conferences has three benefits. First, you can catch talks and keep up with the state of the art technology for your industry. You can also typically check out talks by your competition or cruise by their booths and see their new offerings. Finally, you can catch up with old friends and make new contacts.
  • Join relevant industry associations
    I’ve seen mixed results with this strategy, but some folks swear by it. It all depends on what field you’re in.
  • Leverage your educational network
    If you graduated from a school that has an online alumni directory, that can be a superb source of leads.
  • Get referrals from current customers
    If you’ve performed well for your customers, don’t be afraid to ask them for a referral. Just be sure to give them an out so that they don’t feel like they are disappointing you if they don’t cough up a name.
  • Bulk email list
    Depending on what you’re selling, bulk email lists are for rent for just about anything you can imagine.
  • Cold calling based on industrial classifications
    You can run to the local library and look up SIC and NAICS codes for businesses that you typically sell to and then generate a list of similar companies.

Letting the leads come to you

As you might have already guessed, the way to get leads to come knocking at your door is through marketing – online and offline.

  • Online marketing
    For our purposes here, there are two main types of online marketing; search engines and ad placement. Search engine marketing can be further broken down into organic (i.e. free) search engine placement and paid search engine placement (e.g. Google Adwords).
  • Offline marketing
    Here is where most people go by default when they think of marketing their products or services. This includes advertisements in journals and magazines, listing in directories like Thomas Register (although they’re strictly online now), sponsorships, signage, and media advertising to name a few.

Don’t let the fact that there are far fewer suggestions in getting leads to come to you shade your view toward these strategies. Millions have been made through simple search engine optimization strategies. If you have a product or service, you can bet the house that someone somewhere is searching for it right now. We just need to make sure that they can find you.

What is a sales funnel?

This post marks the end of the introductory phase of this blog and begins to dig into the meat of what we’ll be talking about here for all time to come. And that’s the sales funnel. We employ a sales philosophy that has as its backbone the sales funnel – oddly enough, we call it “Sales Funnel Selling.”

A great way to learn what Sales Funnel Selling is all about is to read our free white paper “What is a sales funnel?” It represents the first in a long series of papers that will dig deep into our philosophy and provide tools and tactics that can be put to immediate practical use.

Just like a typical funnel moves liquid from the big end to the small end, a sales funnel moves opportunities in a predefined path from initial contact through receiving a purchase order. Think back to when a big order came through your company’s door. Did it magically appear on your fax machine or in your in-box? Doubtful.

Think farther back. Back to a time before you even knew this client. From the day of first contact to getting that sweet piece of paper from your fax machine, that client went through several steps, transforming themselves from an unknown outsider to one of your most cherished customers. Those steps are what the sales funnel is all about and why it is the key to any sales process or philosophy.

A sales funnel illustrates how your sales pipeline is flowing now and what it might look like in the future.

What is a sales funnel?A typical sales funnel is shown here. The key to surviving in sales is to make sure that each respective layer never goes empty – it really is that simple. You should always know how many companies are in each of your respective layers – in general there should be more and more companies as you move up in layers. New opportunities are put in the top of the funnel and walked through the maze of layers until they either become disqualified prospects (hopefully we find that out early) or they give us a purchase order and fall to the bottom layer.

Now it could take weeks or months to bring this prospect through the entire funnel, so you better have some deals close to the bottom of the funnel or you’ll be going hungry until you push something down. And don’t think for a minute that a purchasing agent doesn’t know when your funnel is a bit dry. They can smell that a mile away and make you pay dearly to expedite the sales process.

So the bottom line is pretty straightforward.

Make sure that you have action at all levels in the sales funnel and you’ll never be desperate for a close again.

When you aren’t desperate for opportunities in the bottom end of the funnel, you can stay detached from the prospects in the top of the funnel. Detachment means that you aren’t pressuring you or your prospect to move too fast through the sales process because you don’t need the sale. Once you begin to feel that pressure, you can lose sight of the real goal – to help your client. And when that insight is lost and you don’t have your client’s best interests at heart, you can damage your relationship and reputation beyond repair. Nothing is more important to your clients than your integrity.

A well populated sales funnel gives you the time to help ensure that your proposed solution becomes the chosen solution.

Although we can’t go into too much gross detail here because of space requirements, each layer of the sales funnel is briefly defined below. Remember to download the What is a sales funnel? white paper for a much more detailed explanation regarding the sales funnel process.

New Opportunity – This layer contains new leads that you’ve either uncovered or that were passed onto you from the marketing department. See the “Where do sales leads come from?” article for information on how to make sure this layer is chocked full of thirsty prospects.

Initial Communication – Will it be the dreaded cold call, or do you have an in because you both graduated from the same school. The article “Getting the initial sales appointment” details the process for getting yourself noticed and gaining the all important foot in the door.

Fact Finding – This layer is where you ask question after question after question to make sure that you exactly understand what the real problem is. “We need a lightweight material for this shaft” is not a problem statement; “We need to reduce our fuel consumption by 15% because of new FAA regulations” is a problem statement. Do you have anything in mind that can help them save fuel; perhaps a lighter material for that heavy steel shaft?

Develop Solution – After all the facts have been gathered, collated and restated, work with your technical team and do what you do best and come up with a proposed solution. Depending on the complexity of your product, try to have your client in on some of your brainstorming meetings to get their buy in – even if it’s over the phone. Do you think you would have an edge in winning the work if the solution was partly your client’s idea? I’d bet on it.

Propose Solution – This is the layer where the gross glossy proposals and PowerPoint sludge-pits are created. You won’t be doing that however. Since your prospect was intimately involved in developing the solution, they already know basically everything that’s in the proposal including the price. You’ve created a “zero-surprise proposal”, and your prospect loves you for it. As an added bonus it’s only four pages long compared to your competitor’s 28-page behemoth that no one is going to read anyway.

Solution Evaluation – This is the time that your prospect earns his keep. Since he already bought off on the proposal, you need to work with him to push your solution through his buying process and not worry about selling him anymore. Of course you already know what that buying process is from the Fact Finding step right?

Negotiation – Ah, yes; if you buy today I’ll knock off $300 and throw in a free oil change! We certainly don’t want to come off like Crazy Jerry from Crazy Jerry’s Used Cars. Of course since we’ve had the client involved in the process the entire way and created this wonderful zero-surprise proposal, we should actually be able to skip this step on many occasions. As deals get bigger and more complex, however, the legal, purchasing, and accounting departments usually want to take a few swings at you. Don’t fret; you’ll be ready and waiting.

Purchase Order – Here it is, the big rush of getting exactly what you were expecting at the exact time you were expecting it. But even knowing that, it’s still a climatic experience that will drive you to jump back in the funnel and keep shuffling deals downward.

Account Maintenance – Don’t think that this is an afterthought; it is one of the most important layers in the funnel. I’m sure that you’ve heard how much easier it is to sell to an existing customer than to acquire a new one, well it’s true. You’ll be able to skip the first few layers and jump right into developing solutions with your client right at your side.