Sales from a Customer Viewpoint - The Three Buckets

Recently, our VP of Sales had the unique opportunity to speak candidly with a strategic sourcing executive at one of our very large customers. Before you dismiss this as just another article on dealing with purchasing managers, consider that this sourcing executive is responsible for managing vendor relationships where his company spends tens of millions of dollars annually. This is not a typical purchasing manager. This is a seasoned professional who has seen just about everything, so getting some time with him was a real treat. And what he said changed the way we view our customer relationships.

In his view, there are three “buckets” in the strategic vendor/customer relationship.

The first bucket represents the existing business that the customer transacts with the vendor partner. What are they buying now? What kind of money is being spent? Is it good business for both parties? Do the problems that originally drove the decision to buy the products or services still exist? Is the product or service still relevant to the customer? Are the customer’s users still happy with the existing products and services? These are questions that should be addressed in an ongoing dialogue with the customer to ensure that they remain a loyal and satisfied customer.

Blog continued below . . .

If you like my blog, you’ll love my book, Click Send and Sell! Three Unconventional Emails with Extraordinary Sales Results.

If you have ever had a prospect “go dark” this book is for you. It has proven email techniques to “wake up” your prospect. While unconventional, these emails are authentic and professional, and almost always work. And , for only $3.99 you can put them to work for you today.

Also included are email techniques for following up on leads (these emails typically get a 20% response rate!) and for planning your next prospect meeting. Proven through years of use and honed for you, these emails will help you stand apart from the crowd.

The book is available at just about every electronic outlet, including Amazon, Barnes and Noble, Sony, and Kobo. It’s also available for your iPad at the iTunes store.

No eReader? No problem! Click HERE to download and print the book in any format you want.

What are you waiting for? Those deals won’t wake up on their own!

You can and should spend time with the customer talking about their current relationship with you. Growth can easily occur here. Maybe they want to add incremental business. Staff can turn-over. Maybe there is a training opportunity and chance to increase overall satisfaction. You might discover an under-utilization issue that can also increase revenue and/or customer satisfaction.

The second bucket represents the customer’s current initiatives that involve your products or services and may have near term sales cycles associated with them. Maybe they are expanding and need to duplicate existing products and services from an existing location to a new location. Or maybe they have asked you to speak with them about an upcoming project where your products or services may have a strong fit. Whatever the case, bucket two is the customer’s “today” priorities where they may be able to leverage your existing relationship. If you are delivering on bucket one, you may be invited in to discuss these new initiatives.

The first question you should ask yourself here is whether or not you know what your customer’s current initiatives are. Here’s how I found out recently while speaking with one of our customers. He had asked us about our product direction and we had obliged by providing him with a product road-map presentation. Towards the end of the presentation and after some great dialogue I asked him the following, “Brian, you’ve been great about hearing where we are headed from a product standpoint, but none of that really matters unless that matches up with your key initiatives for 2011. Can you give us a quick overview of what those are?” He was happy to oblige and told us all about their focus for the year. There were several projects underway and a few where our services were a perfect fit.

More importantly, there was a particular initiative where Brian had no idea that we had a product that was an exact match for his requirements. Without asking, we would have never been invited to participate in the project and could have lost out on a very lucrative deal. Your customer has a view of what your company does that may not always be 100% accurate. By listening and understanding what their key initiatives are, you have a chance to insert yourself where there is a fit – even though the customer may not have known there was.

The third bucket represents the products and services that you, the vendor, want to present to the customer. While these may not be a strong fit with customer’s current initiatives, there is a great match from your perspective. For example, maybe you have been providing payroll services and now you’ve got a new offering around dental benefits. While they may not have an initiative focused on that, it is a natural extension of your services and would be a great fit for the customer. Or what about a creative ad agency that now provides web design services? Whatever the offering, bucket three are those product offerings that you can’t wait to tell your existing customer about, even though they haven’t shown a demand for the product or service in the past. As a sales rep it is your responsibility to sell new products and your existing customer base provides the most fertile ground. Bucket three is obviously critical to your success.

In the mind of the purchasing executive, if you spend all of your time on bucket three, you’re out. You have to earn the right to talk about bucket three by delivering on buckets one and two. If all you do is pound your existing customers with new product offerings that may or may not matter to them, you have undermined your credibility. This is the rep that spends more time talking than listening. Customers don’t consider them a business partner because they are constantly bugging them about all their new stuff and seem to care less about how the existing business is performing. And if you think about it, it makes sense. What currently dissatisfied customer is interested in hearing all about your new products and services when you’re not delivering on your current commitments? The same question can be asked about bucket two – why would they include you in their key initiatives if you’re not delivering in bucket one? Again, you have to earn the right to talk about the bucket three initiatives because they are your initiatives at the moment, not your customers’.

Now that you have a better understanding of the customer/vendor relationship from the customer’s viewpoint, make it actionable. Here’s how.

Contact one of your best customers – maybe one that you take for granted. Ask for a one-hour meeting. Tell them that you want to start having quarterly business reviews. Here’s a high-level agenda:

1. Our current business.
2. Your key initiatives and how we may fit.
3. New products and services.

My team has tried this approach recently with great success. It provides a framework for a conversation that is very meaningful to the customer, provides great insight in to their top priorities, and gives the rep permission to talk about new product offerings. We have seen some really great opportunities emerge as a result.

Good reps are all about bucket one; great reps are all about buckets one and two; top reps are about all three. Manage buckets one and two well and earn the right to talk about bucket three. From there making your numbers will come much easier.

*NOTE* Many of you participated in a poll regarding a backpack or a briefcase. The results of the poll can be found in the post, "I'm Going on a Sales Call and I Don't Know What to Carry."

The Power of Silence and the Pregnant Pause

I had a big scare at the Houston airport last week. But it had nothing to do with travel. I was there with one of my sales reps and he walked up to me with a big grin and said, “I just did a Sam.”

Having been in sales management for a while, I’m a big proponent of “Do as I say, not as I do”, so I was very nervous as to where this was going. So I took the bait and asked him what he was talking about. He told me he used the “pregnant pause” with a prospect and it worked like a charm. He reminded me of a few instances when I had used the technique successfully and he was waiting for the right time to try it himself. I was anxious to hear about his experience.

Blog continued below . . .

If you like my blog, you’ll love my book, Click Send and Sell! Three Unconventional Emails with Extraordinary Sales Results.

If you have ever had a prospect “go dark” this book is for you. It has proven email techniques to “wake up” your prospect. While unconventional, these emails are authentic and professional, and almost always work. And , for only $3.99 you can put them to work for you today.

Also included are email techniques for following up on leads (these emails typically get a 20% response rate!) and for planning your next prospect meeting. Proven through years of use and honed for you, these emails will help you stand apart from the crowd.

The book is available at just about every electronic outlet, including Amazon, Barnes and Noble, Sony, and Kobo. It’s also available for your iPad at the iTunes store.

No eReader? No problem! Click HERE to download and print the book in any format you want.

What are you waiting for? Those deals won’t wake up on their own!

Here’s the background of the deal before I share his conversation with you. There was an active opportunity with this fully engaged prospect in late 2010. The seller, a very reliable forecaster, had put this in his pipeline to close in Q4. They had gone back and forth on a number of issues, including price, and had settled on ten-cents. Then, as these things often do, the customer went dark and didn’t resurface until last week, several months after their last conversation.

Here’s a rough cut of what was said after the usual pleasantries:

Prospect: “We’re ready to get this thing going again.”

Seller: “That’s really great to hear. We’re ready when you are.”

Prospect: “We had agreed to a price of ten cents last year, but I’m really going to need you to work with me on this. The best I can do is nine cents.”

Seller: “Jerry, the price is fifteen cents now.”

And then he said nothing else.

Total silence on the line.

And more silence.

It started to get a little uncomfortable.

And more silence.

Until finally the prospect said, “But Seller, my budget is built around a ten cent price. That’s where we ended up last year. I was just sure we could get it done for that this year! What if I give you a minimum commitment? What if I can guarantee a specific quantity? Is there any way we can get ten cents?”

My how things changed, and quickly. The prospect went from being in the negotiating driver’s seat to practically begging the seller to do business with him. All because the seller did the exact opposite of what most sellers would do in that situation – he didn’t say anything.

It takes some intestinal fortitude to use the pregnant pause. It is a very uncomfortable feeling. But it is also very effective when used at the right time.

Think about how that conversation could have gone.

Prospect: “We’re ready to get this thing going again.”

Seller: “That’s really great to hear. We’re ready when you are.”

Prospect: “We had agreed to a price of ten cents last year, but I’m really going to need you to work with me on this. The best I can do is nine-cents.”

Seller: “Sounds fair to me! Let me see what I can get done.”

Most sellers are so anxious to get an order that they will jump on the very first buying signal and will often leave money on the table. Or, yammer on and on about why they can’t do nine cents. Sometimes, all you really need to do is just be quiet.

As I contemplated the events at the airport, I recalled a very similar situation from a few years ago. Our company had done a large programming job for a Fortune 500 retailer and they needed more work done that they thought should be free. We had already done work outside of the original specifications – for large customers it is not uncommon to do some additional “goodwill” programming for scenarios that are in the grey zone. This request however, was different. It was fairly large and clearly outside of the original scope of work. So it was time to sit down for a conference call and come to a resolution. Joining me was our project manager who absolutely hated this kind of conversation. He wouldn’t be saying much, but I needed him in case they brought up some of the finer points of the project. Even then, he didn’t want anything to do with the call. He was a great project manager but not much of a seller or negotiator. He had tried a couple of times without success to get the deal done and finally asked me to step in.

The meat of the call went something like this:

Retailer: “As we’ve stated, we believe that this functionality should have been in the original release and we are not going to pay for the development work. We like the specifications and the timing but we won’t pay a dime.”

Me: “I appreciate your position, but we don’t agree. If you look at the original specifications, this capability is clearly not included. So we’ll need to charge you the $25,000 that is on the document that you have.”

Then I hit the “Mute” button on the phone.

And then the silence started . . .

It seemed like an eternity.

Finally they chimed in, “We won’t pay for the development work. It should have been included in the original deliverable.”

To which I responded, “I understand your position, but ours has not changed. We cannot do the work for free, so the best I can do is the $25,000 figure you have.”

Then I hit “Mute” again. The project manager was visibly uncomfortable with all of this, literally squirming in his chair. The silence was deafening. It must have lasted for two minutes. Finally they came back with “Okay, if that’s the best you can do.” And we moved forward with the project. We completed the project as planned, the customer was thrilled, and we went on to do more work with them. The negotiation did not damage the relationship. If anything it let them know that we were serious people who would not be pushed around by a large customer.

Most sales professionals aren’t wired to be completely quiet. It’s just not who we are. But I would suggest that the pregnant-pause could be a very effective weapon in your sales arsenal. And I suspect that as you read this some situations are coming to mind where you could have used the pregnant pause effectively – or it has been used effectively against you.

Warning: As effective as the pregnant pause can be in negotiating, you had better be able to back it up. In both of the above examples, the seller was in a very strong negotiating position. As such, I would suggest using the pregnant-pause in selling situations judiciously. Make sure that you are absolutely right and that your position is 100% defensible – or that you are willing to walk away from the deal. It is a very strong tactic that requires nothing less.