Posts filed under 'Buying'
Economic news these days is a jumble of cries about double dip recession and the U.S. succumbing to a Japanese-style “lost decade” with multiple recessions.
From the media’s perspective the economy is a very frightening animal. Fear-inducing articles sell ad space.
So their perspective is often short-term, the immediate take on last month, quarter, or year. Keep the fear factor up and so goes ad revenue.
Until one looks at a more historical view, which is what “The Recession Dating Game” by Michael Boskin does. He presents a longer term perspective on the economic situation and puts it in historical context.
Evidently recessions are never straightforward affairs. There’s always ups and downs, and ups and downs again. That’s normal for the abnormality of recessions and recoveries.
While things are definitely not so good now, they’re likely not as bad as the general media hype.
What’s this mean for Sales, Selling & Salespeople?
Whatever you’re prospects are feeling in this economy it’s likely to be around for a number of years. So here are four “B”s that might help you stay sane, maybe even increase your success.
#1 BE Aware of Changes in Buying Behavior
What’s changed about the way your prospects are buying your service in this economy? How has their behavior changed because of what appears to be a long, slow recovery? Are they:
* Taking longer to make decisions?
* Highly price sensitive?
* Contracting for shorter periods of time – 1 year instead of 3 year contracts?
* Procurement involved in every bid?
Whatever these changes might be, they’re your new sales reality. Recognize and adapt to them, whether it’s a re-honed message or different approach.
And with your changes, still hold true to universal, timeless truths (WIIFTP: what’s in it for the prospect?) and your personal values (you’ve still got ‘em right?).
#2 BE Focused on a Plan
Have a long-term plan (1 year minimum, 3 years is probably too far). Plans provide gravity, emotional stability and personal fortitude. They make us feel as if we have control over something, and that’s a good lie to live with.
Don’t have an individual sales plan? Here’s a free one in “Sales Plan-o-rama“.
#3 BE Flexible in Approach
Seems contrary to #2′s having a plan, but a plan requires you to spell out your approach in a strategic way.
#3′s Being flexible in approaching prospects is tactical. It’s what you’ll do on a particular day. You start from your plan but now you’re now faced with an alternative. Don’t shun it. Sniff it, ponder it quickly, then act. Maybe it’s meeting prospects in new ways, such as:
* Attending a Sustainability networking event
* Introductions via LinkedIn
* Participating on committees of trade associations
Here’s more info in “Selling in our Millennium“.
#4 BE Topical in Conversation
Prospects’ attention, like ours, is pulled to the new crisis of the moment, whether its the economy, upcoming legislation, emergent threats or latest technology.
It’s the salesperson’s job to connect the relevance of the service being sold – to – the survival and success of prospect’s business.
That’s an easier conversation when it begins (appropriately) with the topic of the moment. The salesperson connects that upcoming legislation, emergent threat or latest technology with an impact on the prospect’s business. Then shows how the salesperson’s service can help the prospect solve their business pains and achieve their goals.
Here’s an article that speaks to the salesperson’s job of making the connection, “The #1 Secret to Sell More Service Contracts“.
Unfortunately, the future of the economy is unclear, but hopefully your selling will continue to be successful. Good luck.
August 5th, 2010
If there’s one must-have, die-without sales training, it’s understanding Points of View (POV)…that are not one’s own.
POV is the genesis of customers buying, contracting, managing, and changing suppliers. Of contractors selling, serving, retaining, and profiting from customers.
Can’t understand a customers’ POV? No business. Period. End of story.
Understand how customers view the world, and contractors can:
- Help customers buy
- Make customers look good
- Work on the customers side of the desk (partnering anybody?)
Free Training
Here are a number of past blogs and articles that focus on the customers POV, specifically when they’re buying.
Buying in General
3 Stages of the Buying Cycle: Start here if you’re trying to sell, the PDF download details specific seller activities based on where the customer is in their buying cycle.
Voice of the Customer in the Buying Cycle: You can almost hear them speak (shouldn’t you hear them anyway?).
Crystal Ball
Overcoming Recession Reluctance: NOTE the date, Feb 2008. Wow, got this one right.
Horse’s Mouth
Procurement Talks: An Interview with Microsoft, Expedia
Procurement Mindset
Selling to Procurement: A look at 2 styles of procurement and how sellers can approach them.
What’s the Right Price for Service?: Hand this to customers/buyers. Help them understand it’s a SERVICE, not a PRODUCT!
Reversing into Darkness: One of my favorites. There’s a great comment from an outsourcing procurement firm, wonderful insight into the buying POV.
Good Luck.
~~~~~~~~~~~~~~~~~~~~
Chris Arlen
President, Revenue-IQ & Service Performance
July 24th, 2010
Obviously we do if we’re selling or managing sales. But buyers (aka prospects or customers) have no reason to care. They receive no benefit by helping sales people.
As dumb and basic as this sounds, most sales people still work as if this wishful thinking were true. They expect buyers to do the sellers’ work, helping sales people sell.
Doubt this? Ask a salesperson to answer the following:
- What message do you leave on buyers’ voicemail that gets a return call?
- What do you email buyers that gets a reply?
- How do you get buyers to call you from your web site or direct mail piece?
- How do you get a face-to-face intro appointment with buyers?
- How do you elicit open & honest communication with a buyer you’ve just met?
- How do you gain a buyer’s trust so they share complete & thorough information about their situation?
- How do you secure a face-to-face meeting to submit your proposal to a buyer? (when not part of an RFP process)
- How do you engender fair & value-based consideration of your proposal
- How do you get timely & honest feedback from buyers after your proposal & presentation?
2X Questions
Tough questions to be sure, but asking them provides focus and can mobilize sales efforts to come up with answers, even though the first ones may not be ideal.
They’re also trick questions too.
Because whatever the answers are they’re describing what sellers want – not what buyers want. And to win sales means satisfying buyers’ wants.
Those seller’s questions can help translate seller’s wants into buyer’s wants. For each question above try to:
1) Identify a matching buyer want, then
2) Develop an action that satisfies the buyer’s want
When sales people can do this successfully they’re able to advance the sale to the next step, and the next, and the next, right up to the buyer signing.
What Buyers Want
Buyers want many things, but you already knew that. Their wants can be grouped into Business-Related and Personal-Related. Here’s a simple list for both:
BUSINESS-RELATED WANTS
- High-value suppliers sourced & vetted
- Trusted supplier-partnerships established
- Vendor/service management time reduced
- Costs lowered
- Defects/deficiencies minimized
- Output/yield/throughput increased
- Customer satisfaction raised
- End-user productivity raised
- Value from spend optimized
- Service contributions valued
- Service performance visibility
- Regulatory compliace ensured
PERSONAL-RELATED WANTS
- Recognized for personal successes
- Justified budget & headcount
- Tasked with high visibility/importance initiatives
- Increased job security
- Optimized performance-based bonuses
Connecting the Wants to Actions
The exercise of translating seller’s wants into buyer’s wants, then developing seller’s actions might look something like this:
SELLER’S WANT: To elicit open & honest communication with a buyer you’ve just met.
BUYER’S WANT: To find high-value suppliers that can become trusted supplier-partners.
SELLER’S ACTIONS:
a) Present evidence to buyers of seller’s long-term valued customer partnerships, in testimonials, case studies, white papers, videos, etc. – avoid bragging
b) Get buyers together with your reference customers, at lunches, in seminars, in benchmarking groups, on site tours of your references’ facility, etc.
c) Tell buyers what you’re going to do, do it, and then confirm that you did it. Do this in everything, especially little things, like calling back on a certain day and time, emailing materials, etc. Always follow up with a call, voice or email to show you met your follow-up commitment. Your actions live the promise of reliability and trust that buyers want.
d) Plan and implement a series of small events/activities during the initial contact period that deliver value specifically to what the buyer is interested in. This means fact finding early and repeatedly so that you’re delivering specifically what they’re looking for. Even if it’s as simple as a restaurant recommendation.
In the End
Our success as sellers is based on first identifying what we want and then translating those into buyers’ wants. Once done, we can focus on how best to deliver and get both.
~~~~~~~~~~~~~~~~~~~~~
Chris Arlen
President, Revenue IQ
June 17th, 2010
Moving up the business food chain requires understanding nuances, whether as an employee inside or salesperson from the outside.
Yet there are business practices that occur 1,000s of times and we botch them as if we have our head in a bucket.
Simple little things, but with huge impacts.
Like this one: What’s the difference between a meeting and a presentation?
The question is rarely asked and virtually never answered.
You’re probably thinking “why does it matter?” Stick with me here because at the bottom of this post there are 6 Tips for Persuasive Presentations. But before that, let’s explore this idea a little further.
The hair splitting between meeting and presentation becomes more important the more sophisticated your world becomes.
Those who don’t understand the difference between a meeting and a presentation inevitably:
1) Treat a presentation like a meeting and end up making awful presentations that fail miserably (sayonara sale)
-or-
2) Treat a meeting like a presentation and end up irritating participants and wasting their time (adiós funding)
Each meeting or presentation is a time-based opportunity.
You have the chance of working with others who can impact your business. Who knows when these individuals may be around, or in their current capacity, or frame of mind?
But if you’re holding a meeting when you should be making a presentation – or presenting when you should be holding a meeting – you’ve just wasted an opportunity.
What’s the Difference?
Although you can present information in a meeting, and meet for a presentation, as business practices they exist for different reasons and have different strategies for successful outcomes.
Unfortunately, the words meeting and presentation are not well defined in dictionaries for business. Most of us can’t make a clear distinction in practice either.
As a starting point of departure, here’s a couple of dictionary definitions:
Meeting: an assembly for a common purpose
Presentation: Something presented as a descriptive or persuasive account (as by a salesman of a product)
While these definitions don’t help much, they do provide a step towards defining meetings and presentations in a way that enables us to be more successful.
Meeting: Defined as a Business Practice
Business meetings are held for many reasons, i.e. to inform, delegate, gain consensus, train, etc. Their purpose differs.
Because meetings are held for many different reasons, they’re best defined as a business practice, rather than by their purpose.
Therefore, meetings are something that’s done, without always having the same purpose. And that’s what makes a meeting different from a presentation.
Presentation: Defined by its Business Purpose
A presentation has only one purpose; to make a sale.
Literally, to get your customer (audience) to take the action you want, such as:
- Selecting your firm in a bid process
- Funding your proposed project
- Adding headcount or responsibilities
So, a presentation’s purpose is to make a sale. It’s single purpose is what makes a presentation qualitatively different from a meeting.
In a sale, you have to persuade the audience to select your offering – a much larger proposition that attending a meeting.
Persuasion requires making an emotional connection with the audience and supporting their choice with logic.
All sales decisions are based on emotion and justified with facts. The heart and head connection must be made for the sale to occur.
And that’s what a presentation does, it’s where we connect the audience’s head and heart to our desired outcome.
6 Tips for Persuasive Presentations
As a presentation’s purpose is to make a sale – and a sale requires persuading the audience – it’s obvious that a persuasive presentation is required. Towards that end, here are 6 tips to help:
#1 Design for an emotional appeal
Design your presentations intentionally for an emotional appeal. This means adding a little excitement, a little warm and fuzzy, a scary thought to some old school thinking.
#2 Tell stories & show pictures
Stories and imagery are far more effective than volumes of text and numbers for connecting emotionally with your audience. This doesn’t mean littering your presentation with kittens and bunnies because they’re cute.
#3 Don’t wimp out on passion during the presentation
Make an emotional connection with your audience during the presentation. This means speaking with passion about the important stuff, which can’t be everything because you’ll wear out your audience and yourself. Please, no crocodile tears, ever.
#4 Engage your audience in a conversation
Get your audience asking you questions, which means you’ll have to prep them for that, and then be open to go where they want to. This is a far better way of connecting with them than guessing what they want. Remember, when they’re talking, they’re interested.
#5 Create presentations that can be navigated non-lineally
Design your presentations to enable your audience to direct you to the info they want. They’ll be far more engaged when they get their questions answered when they want to hear/see it.
#6 Help your audience envision your solution
Specifically, in your descriptions, stories and images create a mental picture of your offering solving the audience’s problems and making their life easier. Isn’t this what they’re buying?
Good luck and do the right thing at the right time.
~~~~~~~~~~~~~~~
Chris Arlen
President, Revenue IQ
April 1st, 2010
An article in today’s New York Times describes a possible change in the way federal contracts are awarded, and it specifically calls out facility service contracts.
Plan to Seek Use of U.S. Contracts as a Wage Lever
The Obama administration is planning to use the government’s enormous buying power to prod private companies to improve wages and benefits for millions of workers, according to White House officials and several interest groups briefed on the plan.
By altering how it awards $500 billion in contracts each year, the government would disqualify more companies with labor, environmental or other violations and give an edge to companies that offer better levels of pay, health coverage, pensions and other benefits, the officials said.
Because nearly one in four workers is employed by companies that have contracts with the federal government, administration officials see the plan as a way to shape social policy and lift more families into the middle class. It would affect contracts like those awarded to make Army uniforms, clean federal buildings and mow lawns at military bases. (read the full article)
How might this effect Facility Service Contractors?
Is this good or bad for contractors, those going after federal contracts? Why?
Obviously, this is for federal contracts only….at the moment. If this change were successful with federal contracts, would city, county and state be far behind?
What about the private sector? Specifically high profile firms like those in consumer goods, banks and academic institutions. Their purchasing decisions already pay attention to maintaining a good public image.
I’ve started asking contractors what they think about this change and here’s the first response.
I think it would be great if we could all compete on an even playing field with hours, wages and benefits set in advance. I believe our company (IH Services) provides the type of work environment, management expertise and forward thinking that could get us more contracts in this environment. We do not have employment violations because we follow the rules, not like some of our competitors.
Taylor M. Bruce, Jr., President, I H Services, Inc.
What are your thoughts?
What do you think? Share your comments in this post. I’m very interested to hear your perspective on the future.
~~~~~~~~~~~~~
Chris Arlen
President, Revenue IQ
February 26th, 2010
Here’s a customer-contractor situation that, although it doesn’t happen too frequently, is extremely dicey when it does.
Your customer wants a non-contract service from you, but the project isn’t in their budget.
To pay for your project they need an amount from you so they can find a place to allocate that unplanned spend.
You provide an estimate to be billed on actual per-unit-pricing because you know the scope of this particular service varies hugely. Not because you’re a poor estimator or a sloppy provider, but because customers always get excited and want more, or your customers’ end-users want more.
Either way, your scope typically increases substantially from the original estimate and that’s why you provide pricing based on a per hour or item basis.
But here’s the rub. Your customer took your estimate as an absolute, and communicated it upstairs for approval. Without your knowledge your estimate is now a fixed fee.
Sure enough, you get started with your non-contract service and your customer gets excited and scope expands.
You believe it’s all covered because you priced it on a unit cost and your customer is happily increasing scope.
Unfortunately, once the work is done and your bill arrives, your customer changes from ectastic with your results to letting you in on their little failing. Your estimate became their not to exceed budget.
Customers do that sometimes. Either because they feel they can’t get their pet projects funded, or don’t want to upset their bosses with a larger, more conservative number in the first place.
To keep it under the radar your customer presents the financial picture in it’s most humble light. They figure they can sort it out after the fact. And of course that means you’ll help them figure it out.
What to do?
At this point in time almost every solution will be uncomfortable, for you and/or your customer.
The following are some possible ways out, but they’re not for everyone. If any of these make you feel uncomfortable, by all means skip them.
Bill overage onto 2nd smaller invoice
Spreading actual amounts above the estimate onto a second smaller project your customer can get through on a different Purchase Order (PO). Customers usually have other projects and some will have a little left over space on another PO.
Of course you only take this approach with your direct customer’s full knowledge and approval.
Carry overage onto 2nd project
Hold off billing for the overage on this project and include it on the next project. Ask your customer to guarantee the next project and get a start date. However, if projects are competitively bid it’ll be tough to cover overage costs this way.
And again, you only take this approach with your direct customer’s full knowledge and approval.
Eat the overage & not bill
You can take the loss and not recapture your billing. It’s the least palatable for you but may be required depending on your customer relationship. Also, the size of the overage will also dictate whether you can live with this option.
If you go this route, make sure your customer knows what you’re doing. Hopefully it’ll be worth the brownie points.
Hold fast & bill full amount
This may be the least palatable for your customer. But if you submit your bill with your written proposal that clearly states billed per actual unit then you’re telling the customer “you made the mistake, you sort it out”.
This option depends on your customer relationship and the overage amount in question. Also, even after approval, your payment may take a while to get paid if your customer is no longer willing to shepherd it through their A/P process.
Educate & communicate with a hammer before doing the work
The best solution is always to avoid the problem in the first place. When asked to provide a pricing, consider your customer may likely consider that a budget amount. Since you can’t reasonably provide a fixed amount, you’ll need to educate the customer to why you’re pricing the work on a unit basis, to bill on actual incurred:
Try:
- Communicating the variables beyond your control
- In person or on the phone, explicity cover the per unit pricing & how those variables impact total spend
- Always confirming everything in a written proposal/estimate
- Adding text to your proposal/pricing confirmation in bold & caps THIS IS AN ESTIMATE, NOT A FIXED PRICE, BILLING ON ACTUAL INCURRED
No Guarantees
Customers sometimes are wild, unfathomable beings. As contractors we can only do our best. In this budget vs. estimate situation, being proactive and a good communicator is your best defense.
~~~~~~~~~
Chris Arlen
President, Revenue-IQ
February 1st, 2010
The old game for selling throws lots against the wall and something sticks – numbers comparing thrown to stuck.
And it’s still true, something sticks, eventually. Even one becomes the justification to continue the old game.
It’s the cost/benefit ratio that’s changed. The benefit keeps getting smaller relative to the cost.
But the throwing continues, because as it’s gotten less effective, it’s gotten more efficient. Grind-em-out salespeople, mail order catalogs and spam only take the rare few sales to keep playing.
Their throwing no longer produces the expected results, even from just a few years ago. Unfortunately, it only takes one to feed the habit.
The new game
Selling is still a numbers game, but a new one.
The numbers are humans (salespeople) working with other humans (customers) who are a lot smarter in 2010 than customers sold to in the 1950s.
Because customers are in different stages of their buying cycle, most salespeople need to be busy with more than one.
The new numbers game is based on:
- Salespeople not selling in ways that make themselves feel less than human
-> customers buy from other humans
- Customers are more valuable to salespeople over the long-term
-> high customer turnover is death to easy sales
- Salespeople build relationships with a customer through the accumulation of all that customer’s experiences with that salesperson & company
-> salespeople are branded as much as their company
- Salespeople engage customers to help solve customers’ problems & realize customers’ benefits
-> what else are salespeople for?
- Customers live in stages of their buying cycle
-> not salespeople’s selling cycle
Playing the new numbers game
Sellers counsel customers through stages of the buying cycle.
To play the new game requires that salespeople:
- Are known, respected & trusted by customers
- Understand customers’ buying cycle
- Identify where customers are in that cycle
- Empathize with customers’ buying situation (risks, gains, fears, etc.)
- Make continual effort towards all the above
What game are you playing?
~~~~~~~~~~~
Chris Arlen
President, Revenue-IQ
January 15th, 2010
I’d like to thank you for making 2009 a successful and productive year for Revenue IQ. As the weekly blog for facility service contractors, it’s the only sales posting (I know of) that’s not for beginners. You, dear reader, are interested in post graduate education in sales and marketing.
And with those flattering words, here are the best posts of this year. These are the “best” because:
a) They received the most page visits as tracked by Google Analytics
b) They generated the most reader feedback (via email, hoping to get you to comment online in 2010)
c) I felt they were the best out of what I’d written
The Best of Revenue IQ in 2009
These are grouped for easy navigation but aren’t in any ranked order. Enjoy, and please let me know of any topics you’d like explored in 2010.
Selling, Proposals & Presentations
Customers & Buying
Marketing
Happy Holidays and a healthy and prosperous 2010
~~~~~~~~~~~
Chris Arlen
President, Revenue-IQ
December 22nd, 2009
Customers have no choice, they must buy. It just might not be you.
Obvious? Overly simplistic? Sure it is, but…
I was talking with someone who’s about to begin an outside sales career after years of inside sales. Our conversation reminded me when I began selling, and I was a little intimated and embarrassed calling on customers.
At that time I didn’t know customers have no choice, they must buy. There are certain understandings fundamental to selling, and business in general. This is one of them.
Skip over this one, or miss it entirely, and your selling will be out of step with customers, apologetic, and a burden to yourself.
Customers 4 Buying Options
Customers have no choice, they must buy.
Why? Because they have needs. Explicit or hidden, all customers have needs. And those needs drive customers to one of only 4 options, customers can:
- buy you & your offering
- buy your competitor’s
- buy themselves by doing it themselves (aka going in-house)
- buy time by not deciding to change, waiting for something better to come along later ( look for next week’s post LOST OPPORTUNITY COST)
Therefore, if customers must buy, then salespeople have a purpose for their existence. Here it is:
Salespeople help customers become aware of their specific needs. Or, if customers are already aware, salespeople help them clarify the implications when those needs are fully or partially resolved, or not resolved.
The question isn’t “do I, as a salesperson, have the right to contact customers?”. No, there’s an imperative for salespeople to engage customers. To help customers fulfill their purpose by helping them buy.
How do you help customers buy?
~~~~~~~~~~~~~~~
Chris Arlen
President, Revenue-IQ
November 12th, 2009
A few years ago Bill S. wrote:
“All the world’s a stage, And all the men and women merely players”
We perform, and are judged by our audiences.
In business, as in theater, bad acting is wasteful and destructive. Here’s how:
For sales people, “bad acting” means actions and words that are seen as deceitful and greedy by customers (the audience).
For customers, “bad acting” means actions and choices that are seen as manipulative and punitive by contractors (the audience).
What are the chances anything valuable and lasting coming from these performances?
You Don’t Mean To
No salesperson or customer intentionally acts badly. Bad acting creeps up and becomes the norm over years.
And it’s impossible to self-diagnose. You’ll have many justifications for why you did or said something.
But in the performance of business it just comes off as bad acting.
Sales People – The “Don’t” List:
If you avoid the following, you’re further along toward being a better sales performer. If not, you’ll be seen as “salesly” by customers and likened to the plague.
- Don’t make extravagant, unsubstantiated claims – hyperbole makes customers cringe
- Don’t act overly chummy to recently met customers – hyperfriendly has them running to wash their hands
- Don’t always have an answer to things you don’t know – hyperknowitall axes you off customers’ trust list
Customers – The “Don’t List”:
At first glance it might not seem necessary for you to avoid bad acting.
However, even though there may be many contractors to burn through, bad acting hurts your reputation. And that stays with you, limiting your ability to accomplish your firm’s outsourcing goals.
So, avoid the following and contribute to your golden reputation. If not, you’ll become known in professional circles by names you’d rather not know about.
- Don’t withhold info you can share with contractors - hypersecretive makes contractors think you lack trust
- Don’t require unreasonable hoop jumping of contractors – hyperdemanding is a sign to customers you’re hard work
- Don’t demean contractors for seeking a profit – hypercritical has contractors thinking you’re delusional or idiotic if you don’t know your firm seeks profit too
How do you avoid Bad Acting?
~~~~~~~~~~~
Chris Arlen
President, Revenue-IQ
October 2nd, 2009
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