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Selling in Difficult Times

The conventional approach in enterprise sales is that the salesperson develops the prospects either by cold-calling or through a Request for Proposal (RFP), meets the client, identifies the needs, proposes a solution, handles price and other objections vis--vis competition and closes the order. This approach even though appropriate, has some limitations and may not work in the difficult times when the trends are recessionary and companies have either shelved, or postponed the buying decisions. Todays executives need to have a much more strategic approach in order to reach their quotas. Robert Dudley, a Sales Consultant from US and Das Narayandas from Harvard Business School propose a Portfolio Approach to Sales. The buying decisions can be categorized into four areas: A. Repurchase B. Replace C. Expansion & D. Innovation Let us look at the four modes and what should be the Salespersons approach: A. Repurchase: Assume that your client has a few desktops and laptops bought from you. The conventional approach is that the salesperson visits regularly asking the client when he is to place the order.In case if the client has a service problem a service engineer may be deputed to solve the problems. Generally the role of a service engineer is that of a support function, who repairs the instrument, gets his service report signed and files the report. In fact at this stage the role of Customer Relationship Management (CRM) becomes very critical. Customers perceive Salespersons and Service Engineers differently. The Salespersons are generally viewed with some suspicion whereas a service engineer is welcomed with open arms. Quite often the service engineers are technically competent and are able to solve the problems but being weak in communications, they may not be able to identify the new business opportunities. The role of CRM becomes very critical for the following reasons: 1. Better Margins: In case of excellent service being provided, the vendor may be able to get price increase in the new proposal. He does not have to undergo aggressive price negotiation with the purchase dept. The service engineer due to his proximity in the client organisation is able to understand the internal dynamics much better than his sales counterpart. 2. Better Utilization of Salesperson's Time: The sales person need not have to spend too much time on this account and can thus focus on new accounts. In a way the sales person's role is peripheral in terms of the time spent and not in negotiation and order closing.

January 1, 2009 (Newsletter for those who value innovation)

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Selling in Difficult Times

B. Replacement: In this case, the client is already having the competitor's products and you are planning to get a breakthrough. Here the salesperson needs to have a much more proactive approach. You should know the weaknesses of the competitor's products and the current status of the service offered. The client may not be willing to give the competitor's weakness offhand. You need to develop a coach or a well-wisher to get the authentic information. Here the salesperson has to do more of a PR work, he has to check whether the decision makers who were present when the earlier order was placed are in the same position or have moved to different depts. or have quit the organisation. You need to also look into those who may be on your side and those who are not. Quite often, the salespersons do not have this idea and they reach the client only after the RFP has been sent. It is possible that the customer has already decided on someone else and he needs three quotations for audit purpose. C. Expansion: Here the client is looking out for a capacity expansion or it might a be a new project altogether. In such a case understanding the customer's business plans, the implications on bottom-line, cash-flow, inventory etc. becomes quite critical. For such situations, vendor should have a team with managers from Sales, R&D, Finance and Production (as applicable). Being more of a project sale, selling what you have is not sufficient. You need to understand the functional implications of his project from different angles. The issue can be ROI, Inventory cost, time in reaching the market; relative merits of buying vs. leasing etc.; teamwork of functional experts can give better results. D. Innovation: In case of expansion, it is the extension of the existing process. Whereas in case of innovation, the client does not feel he has a critical need from the present perspective. He may even feel that your product may be over-engineered. For example you are selling software which can aniticipate specific problems in a telecom switch. Your prospect is selling to Indian companies who do not face any such problem. The R&D and the production manager feel that such a feature is redundant which makes your product expensive and thus you are out of the race. At this stage you need to take a different approach. The perspective of a CEO is much wider than those of the midlevel executives. It will be futile to sell the solution at mid-level. If the CEO can anticipate the business requirement of his future MNC clients for whom your unique feature may make much more sense. The only problem is the CEO may not entertain a mid-level executive. The only option is to have a meeting of the CEOs of the vendor and the client organisation. Do you think both the CEOs discuss the specific

January 1, 2009 (Newsletter for those who value innovation)

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Selling in Difficult Times

technical feature that your software has? The chances are they will be speaking more on the changing business scenarios, the new opportunities etc. Let me give an example: My sales manager was interacting with a HR manager of a leading electrical eqpt company regarding the sales training requirements for almost a year without much success. A meeting with a CEO revealed that the new challenges being faced by the emerging competition. It took 30 minutes to close the order. The HR manager was debating the nitty gritty of the program for over a year. The CEO had a different perspective altogether. There is a very important lesson for the CEOs. You may have a person heading sales but the function should not be totally delegated. You should know when to chip in particularly in those critical orders where the presence of CEO can make a great deal of difference. To be a success in difficult times you should not only to look at the trees but also to have a look at the forest!

Rajan Parulekar For feedback write to paradigm_power@vsnl.net Paradigm Trainers Private Limited - 2008

January 1, 2009 (Newsletter for those who value innovation)

Reach - Out

For more details: Effective Selling Skills, 2 day program at: Mumbai - 9th/10th, Jan.09 New Delhi - 16th/17th, Jan.09 Bangalore - 19th/20th, Jan.09 Web Site: paradigm-trainers.in Paradigm Trainers Private Limited #7, 7th Main, Binny Layout 1st Stage, Vijaynagar, Bangalore - 560 040, India Ph: 080 - 2320 7930

To summarize, the sales executives should develop a portfolio approach of knowing when to let the Service executives take the lead and play the second fiddle; Branches: Bangalore, Chennai, Delhi, Mumbai & Pune when to monitor the client/ competition activity with a hawk's eye, when to use functional teams for project management and when to involve the CEO / top management for selling at Strategic Level.