Many in sales do an excellent job [not] of educating their customers about how to secure the lowest price and maximum commercial concessions. They do this by offering special pricing with hollow threats of taking the discount away after the end of month or end of quarter has ticked-over. This behavior simply trains prospects to take suppliers to the wire to extract concessions every time a major deal is on the table.
It is usually unproductive and damaging to seek to unnaturally force the pace of business. Never assume that price or other incentives will change the customer's timing. Failure to fully understand the buying organization's processes automatically introduces serious risk and makes it almost impossible to forecast accurately. Instead, sell on value and understand the customer's timing and process for selection, negotiation, and procurement. Align with the customer rather than pressure them.
Are you actually aligned to your customer's timing, decision drivers and processes for selection and procurement? The best approach is to understand the date that they need a solution implemented and then validate their commitment by asking what happens if the date slips or status quo prevails. Once you are certain the client is committed to a date for realizing benefits, identify everything that needs to occur to achieve the implementation deadline. Working backwards from this date, go through the list and create a time-line with critical dates for all milestones and identify the interdependencies. Now you have a realistic date for when a purchase order needs to be issued or contract executed. Align to this timeframe rather than your own end of month, quarter or financial year.
Work with your customer to understand and manage the risks, including whether they need to submit a business case or work through a convoluted process for approval and funding. They may need to adhere to an onerous procurement process. There may be critical reviews with steering committees, and there may be approvals required from senior management or at board level. There may also be tension with other projects or initiatives. When full understanding of all these things has been achieved, in partnership with your customer, then you are able to work with them to keep everything on track and adjust your strategy and forecast date accordingly.
Every business decision has a natural pace at which the selection and buying process needs to be fulfilled. Wise sales people ensure they have full understanding before forecasting when business will close. This means there are rarely surprises, just points of risk that can be managed with the customer. They avoid pressuring the buyer or creating unnecessary tension. Instead they build a close plan but call it a Project Alignment Plan with the customer. Consider these questions when thinking about the customer's process:
- What happens if they do nothing and defer the decision?
- Is there a compelling event or a very strong driver for buying?
- Are there external events that may impact the decision or timing?
- What are all the points of risk in securing a positive decision?
- What is the timeframe for delivery of outcomes with milestones?
- Concerning the selection criteria and weighting of various factors:
- Which features and functionality matters most to the buyer?
- What are the technical issues that need to be considered?
- Where do they perceive the risks in the project or initiative?
- How important is brand and size in considering risk?
- How important is experience and industry specialization?
- How is commercial & product risk assessed and weighted?
- What role will demonstrations and references play?
- What is the required Return on Investment or payback period?
- Are they more focused on price or value?
- What are the preferences of the influencers and decision makers?
- What is their approval process and who must sign-off?
- Who can say 'no'? Who has to say 'yes'? Who has power of veto?
- What is the process for handling negotiations?
- If a contract is required, whose paper and can it be reviewed early?
- How is a purchase order generated or contract signed once the decision is made?
Tony Hughes is ranked as the #1 influencer on professional selling in Asia-Pacific and is a keynote speaker and best selling author. This article was originally published in LinkedIn where you can also follow Tony's award winning blog. Also visit Tony's keynote speaker website at www.TonyHughes.com.au or his sales methodology website at http://www.rsvpselling.com/.
Main image photo by Flickr: MattysFlicks
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