Entries Tagged 'Solution Evaluation' ↓

Playing hard to get in action

Mad customerIn the previous post, we talked about the basic sales strategy of playing hard to get. This post will look at an example pulled from a real-life sales call.

To set the stage, imagine that you have developed a manner by which to produce a material that no one else can currently manufacture. The competing material fails in service so often that designers are desperate to design it right out of service, but they are forced to use it because it’s all that’s out there.

OK, so you trot into your prospect’s office and lay out some parts that you made from your new material and their jaws instinctively drop to the ground in amazement, they rush out of the room to huddle and come back in much more composed.

You run the rest of the meeting and collect some cost data on their current practices and gather some forecasts for what a successful material could do in their market place. You leave them with the impression that you’ll get a formal quote to them in about a week but that they should be prepared for an expensive number because your processing route is very costly.

After about a week you overnight them a shiny proposal for your material at $500 per pound – knowing that the competition costs them about $125 per pound. You get an immediate call:

Customer: “This price is unacceptable and you need to resubmit.”

You: “I understand your frustration, but as we detailed in our last meeting, our manufacturing route precludes us from competing with the price of your current solution. Perhaps this isn’t a good fit for our material after all.”

Customer: “Please take another look at your numbers and get back to me next week with your best and final offer.”

A week passes…

Customer: “Have you had a chance to rework your numbers?”

You: “I reviewed our quotation with the production team and we really can’t do much. I could probably shave off about $3 per pound if it would help close the deal, but that’s it.”

Customer: “That’s not even close to enough, this deal is dead!”

You: “Very well then, please keep us in mind if you come across any applications that can bear this increased cost.”

A week passes.

A month passes.

Customer: “Uh, yeah, hi, it looks like we might have found a few applications where your high costs can be acceptable.”

You: “Great, let’s talk!”

A note of caution: this is a very delicate sales strategy that can easily backfire if you’re not completely in tune with your customer’s needs and your competitor’s offerings. It isn’t for the faint of heart.

James Dyson, my hero

Dyson AirbladeOK, I have to admit that James Dyson is one of my all-time heroes.  The guy struggled for years and years to get his cyclone vacuum into people’s houses.  People laughed at him and the big companies ignored him (and subsequently copied him), but he kept on inventing and selling until he became a household name.

I’ve been eagerly searching for one of his new Airblade hand drying units and found one at a local resort this past weekend.  I must have gone into the bathroom four times before my wife asked if everything was ok.  I told her what marvel lay in the latrine and she said “not Dyson again!” – I was on a big Dyson kick for a long time after reading his autobiography – which I HIGHLY recommend.

So how does the awesome new hand dryer lend itself to a sales lesson?  Well at his heart, I sense that James is an engineer that simply wants to solve problems.  Now he went about it and actually solved the problems himself – I’m not suggesting that you have to do that.

But why not look for your customer’s problems that your company might be able to help alleviate and work with your team to at least propose a better solution.  You can bet Hoover laughed at Dyson until they noticed significant market share going his way – what if one hard working Hoover sales engineer would have spotted the need Dyson recognized, do you think Dyson could have survived?

I contacted Dyson’s PR department to ask for permission to use this photo (granted) and to see if I could shoot Mr. Dyson a few questions about his sales philosophy – I was told that they had to prioritize his time and he was too busy; oh well, it didn’t hurt to ask.

BTW, Mr. Dyson, if you ever read this I have a few product ideas for you that I think your cylclone technology would perform brilliantly at and the markets are enormous.

Example sales scenario

Knowledge is powerThere are so many purchasing scenarios that it might seem difficult to choose a representative example. If you really look at this layer, however, the steps don’t really change much regardless of if you’re selling chewing gum to Wal-Mart or heating shields to NASA.

Setting the stage for this example requires you to picture yourself as a raw material provider to a medium size business that is making a lot of money by turning your material into finished goods. You have competition, but your two advantages are that you are the only domestic source and your quality is second to none. Your weaknesses on the other hand are price, and lead-time.

Based on all your work up to this point, you know that they really want a domestic source for this product and it might even become mandatory in the future. They like your quality, but others are also acceptable. You need to work on lead-time, and then there’s the price issue to deal with.

You go in with your zero-surprise proposal and go over it in detail with your contact Sally. No surprises are found and she assures you that it will fly through procurement and you should see an order in about a week.

A week passes by.

Another week, still nothing, but you don’t want seem desperate, so you don’t call.

Finally on the third week you call Sally and she doesn’t even know where it’s at in the process. Perhaps you should have scheduled a call two weeks ago. At any rate, she checks into it and Jack the CFO has it. You’ve never met or even heard of Jack, but he now controls your destiny. You ask Sally for permission to call on Jack and she gives you his number.

“Jack, this is Eric on the line. I’m calling to check and see if you have any questions on our proposal.” To be honest Eric, it isn’t that big of a priority to us right now and I haven’t even looked at it. “Oh, I see. I must have misunderstood Sally; I thought you needed this material delivered by the end of next month in order for you to win the GE account?”

Complete silence…how could you possibly know that!!!

As the oft quoted saying goes – knowledge is power.

Jack thought he had the upper hand because you’ve never met him and he has a big scary title. But if you did your homework, you have the leverage because he doesn’t know exactly how much you know.

“Jack, are you still there?” Uh, yes. Well would you be willing to come in next week to present your best and final offer.

Oh how the winds of desperation have shifted.

You now have the leverage, don’t give it up. You are providing a valuable service and helping your prospect get a large amount of business and deserve to be properly remunerated for it.

The final proposal – best and final offer

Befriending your buyerIn our last post, we talked about how your customer might bring in the big guns with Jack, and how you can mitigate that situation. Now that you’ve dealt with Jack, we’re most likely back to the original team, possibly with jack as an observer. You will probably be asked to come in for a final proposal with your “best and final offer.” Translation: “You better discount your price if you want our business.”

What happened to all the camaraderie that you built up with everyone? It’s out the window for now my friend. But don’t fret, after slushing through this process, your relationship will be right back on track – business is business after all.

At any rate, oblige them and go in for a presentation. Only we’re going to do it with a twist. All of your competitors are going to offer a price break and have a professional presentation bragging about how many divisions and people they have and showing all their glorious equipment with pictures taken at least ten years ago. You’re going to do something quite different.

Your sales presentation, in contrast, is going to be professional but understated. Your presentation is going to focus on what could go wrong during and after the project.

What? This probably goes against every fiber in your being. You should be boasting about how big and great you are and how happy they will feel with you. Why would you want to bring them down with a dreary presentation about everything that could go wrong? Because:

While you’re thinking of how great it will be to receive all that money, your prospect is thinking of how much she is sticking her neck out by spending all that money.

Put yourself in her shoes (and take off yours first). She has probably had nightmares about all the things that could go wrong and doesn’t want to talk about them. Ignoring them and hoping that they won’t happen is much easier than fleshing them out and dealing with them. But by you bringing them up and confidently displaying how you would deal with each situation, you will show experience and, more importantly, competence.

You can close with, “And as fro the best and final offer, that really what we originally presented to you. If you need me to shave 0.5% off to close the deal I can probably do that, but we came in with that offer to win this business and solve your needs, so we don’t really have any wiggle room.” Again, remember that anything you give up here will be the defacto norm for all future dealings with this company.

I once told a bully buyer that instead of honestly quoting work in the future, I would quote it higher so that I could subsequently discount it and make it look like he was doing his job. He promptly kicked me out. I’m now often welcomed back – and he’s not.

Evaluating your sales solution

Tough sales negotiatingIn “Positioning Your Proposal” we reviewed the basic steps on how to make sure that your prospect and you were on the same page in terms of your proposed sales solution. While that all sounds fine and dandy, Sally (the engineer) and her buyer may only be the beginning of the chain of command that you need to wade through.

Oftentimes, in larger companies, they will bring in a ringer at this point in the sales process. You’ve never met this person and have never even heard of their name. They will be brought in “because we are placing a lot of emphasis on the project and Jack has a lot of experience in this field.” Translation: “Jack is here to kick your butt until you give up some margin!”

I don’t want to get into too many negotiation tactics here, that is for the “Negotiating With the Bean Counters” series, but the above tactic is so common that it’s worth mentioning here. At any rate, you just tell Jack that you are happy to meet him and you wish that you have been able to fold him into the mix earlier on and that you’d be happy to answer any questions that Sally wasn’t able to handle.

You see Jack is used to people rolling over because they aren’t prepared and don’t have internal buy-in like you do. When you push back ever so lightly, Jack will usually drop it because there is much more low hanging fruit elsewhere that he can go after.

Remember that once you give something up in the buying process, they will expect to get that every time – forever.

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.