Technology Sales Journal

Caveat Vendor (Seller Beware)

If you think that decision making is a straight process in an unstraight world, you’ll fail more often than you’ll succeed.

Many years ago I sold into a well know manufacturer of mobile phones, pagers and walkie-talkies. One of the major projects I remember my customer undertaking was the outsourcing of their entire logistics function to a third party vendor.

Late one evening I was chatting to Philip, their head of Supply Chain & Logistics who confided in me that he had chosen a vendor to outsource his logistics to. The particular vendor wasn’t well known in this part of the world, but was the market leader in the Far East.

As I was going to have to work with this vendor to supply my products, Philip spent some time assuring me why this vendor was the best for his company and mine. Before parting he asked me to keep the information confidential as they were still in negotiations with several vendors. The fact that he had made his decision before the official decision made been made wasn’t lost on me. But what happened next astounded me.

A few days later I received a call from Philip telling me that there was a change of plan and they were no longer going with the Far Eastern company. Instead they were going to work with FedEx.

When I enquired what was behind the change of heart, Philip confided that when he told his Managing Director of his decision, his MD asked him if he wasn’t making a career limiting decision.

“What do you mean? Philip asked his MD.

“Well”, responded his MD, “when something goes wrong and some important product that we need goes missing, as it inevitably will, and emotions are running high, someone will ask “who lost it?”, “who the hell are they?”, “what the hell are we doing using a company no one has ever heard of…. Are they reputable… why were they chosen? ‘Why didn’t you select a vendor we know?’ and the next question will be ‘who the hell selected them anyway?’

So, Philip informed me, we’re going with FedEx. Everybody knows who FedEx are.  I won’t have to justify them to the organisation. Nobody can tell me that FedEx aren’t a professional outfit.

“But”, I protested, “I thought the ‘Far Eastern’ company was the best fit for your particular needs?”

“Life’s not that simple”, Philip retorted. “I’m not going to take the hit to make someone else’s life easier”

‘Wow’, I thought to myself as I walked to the car park, ‘so much of selling has nothing to do with products or solutions’

Fast forward to late 2010. It was reported recently that Ireland’s Health Service Executive (HSE) awarded a multi million Euro contract for legal services to legal firm Arthur Cox.

So what? you may ask. Well, the under bidder, a consortium of medium-sized solicitor firms, are deeply upset.

The consortium - Wallace, Kelleher, Tobin & Lee – claim that their pitch was queered by the presence of one of Arthur Cox’s senior partner’s (Eugene McCague) on the board of the HSE.

Despite the consortium being ahead “by a distance” on the only objective criteria – price. When the subjective criteria were taken into account Arthur Cox beat off the challengers by scoring 680 points to the consortiums 675 (a 0.5% winning margin).

On the subject of the potential conflict of interest, a spokesman for the HSE said “that if any contracts with as much potential for conflict of interest ever came to the board, Mr McCague would withdraw from the room and take no part in the decision”

Any claim that the potential for a conflict of interest is removed because Chinese walls’ exist or a ‘conflicted’ party ‘leaves the room’ when a decision is being formally taken is disingenuous at best.

Given the choice between the familiar and the unfamiliar most people will favour familiar.  This is obvious, when you think about it.  It’s the devil you know is better than the devil you don’t know syndrome. We all gravitate towards certainty. Familiarity is just a signpost on the road to certainty.  Thus, in the case of the consortia, they were naive to think that they even stood a chance if they could not tackle significant conerns not addressed by Arthur Cox.

In a previous article If you can't even speak about money, don't expect to see any in sales process I made the point that sales effectiveness is not just about your ability to ask questions or make great presentations, similarly, your ability to read the political and decision making landscape is also critically important to your success.

There are several lessons for sellers in the Cox/HSE situation.

Lesson 1: If you expect the decision making of any organisation to be fair, straight or logical then you’re going to lose more that you win. To expect otherwise is naïve.

Lesson 2: The sales process almost always favours the incumbent. This is especially true when selling to an organisation that is risk adverse.

Lesson 3: Given the choice between a lower price (especially when the money is not their own personal funds) and a perceived lower risk, risk adverse people will always go for lower risk. To many people, a cheaper price may be even interpreted as an additional risk fact.

As for Philip, FedEx, and the logistics company in the Far East? Philips Company pulled out of Ireland several years ago. Philip is now CEO of another multi national corporation. Both FedEx and the firm from the Far East are all doing just fine.

 

 

 

New research on forming habits

Productive habits are the backbone of effective selling behavior. New research by Psychologist Phillippa Lally of University College London suggests that habits take a lot longer than the 21 days that previous research claimed.

Lally asked 96 undergraduates to form a habit in 12 weeks by repeating daily a healthy behavior such as drinking a glass of water with lunch.

Her research showed that forming habits took on average nine and a half weeks (I wonder if Mickey Rourke or Kim Basinger were amongst the undergraduates?). Some took several months to form a habit.

The good news is that missing one or two days of repetition will not impede the process.

The truly smart always act a little dumb

A businessman was talking with his procurement manager friend, when they both noticed an unassuming looking fellow bouncing along the foot path. The friend whispered, "That's Tommy, one of the stupidest salespeople you'll ever meet. Here, I'll show you."

"Hey Tommy! Come here!" yelled the procurement manager. Tommy came bouncing over "Hi Mr. Williams!" The procurement manager pulled out a rusty Euro coin and a shiny 50 cent piece and told Tommy he could keep the one of his choice. Tommy looked long and hard at the Euro and 50 cent coins and then quickly snapped the 50 cent from the procurement manager's hand. Mr Williams looked at the businessman and said, "See, I told you."

A short while later, the businessman caught up with Tommy and asked him why he chose the 50 cent.

Tommy looked at him in the eye and said, "If I take the Euro, the game is over."

 

In the Mind of Bernadette Duffy - Sandler Training

This week we welcome Bernadette back into the hot seat to share her views on Consultative Selling and how it differs from Product Selling. Before joining Sandler Training, Bernadette spent 20 years with Computer Associates where she was consistently their top sales rep. 

A must listen!

 

Play: Bernadette Duffy talks about Consultative Selling

To be notified of who I am interviewing each week, join our LinkedIn Group - In the Mind of the Buyer

 

The (re)birth of Customer Service

If you or some of your sales team struggle to sell at a premium, you have only one option - be the cheapest price and/or hope your competitors can't sell either.

If you want to be the cheapest and return a profit, you will find yourself making cut backs in 'costs' like customer service and sales training. After all, these investments are optional - right.

Then along came Facebook,LinkedIn, Blogs (and other social media).........

I came across the following conversation on facebook recently. The only thing that's edited is the name of the contributors.

Facebooker: "‎3 should win some kind of award for worst customers service, I called my bank to dispute an amount that 3 took from my account without any authorisation. The bank teller said she had same problem with them".

5 hours ago · Comment · Like

•  

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  XXXXX likes this.

• •  

    XXXXX XXX I (foolishly) signed up with them for the iPhone because they had some well priced plans. I could only stick their lack of service 24 hours. Thankfully I got out before the 14 day trial period was up. Their customer service people where shockingly bad to deal with. Lesson learned... never again! I'm back with O2 now and quite happy!

    4 hours ago · Like
    

  • XXXX XXXXX So glad I saw this! was going to get the iPhone 4 with them this weekend! won't be doing that now!

    3 hours ago · Like
    

Still think you can't afford to invest in great Customer Service?

Think again.....

Find out what your customers are willing to pay a premium for and then find a way to give it to them. Sell only to people who are willing to pay you extra.

And leave those who are not willing to pay a little extra to the cheap merchants

 

A lesson from the Minister for sellers everywhere

I'm watching our Minister for Finance deliver his 2010 budget and I'm reminded of a very salient lesson for sellers everywhere;

Give people a tax benefit of €1,000 and you'll barely get a grunt of appreciation.

Try to take the same €1,000 back in tax and the same people will want to burn your house down.

We are far more motivated by fear of loss than they are by the promise of gain.

Now, where did I leave those matches........

Do you have a Jimmy Hendrix working for you?

Back in the early 80's, every Saturday night without fail, my friends and I would 'frequent' a nightclub that was ambitiously called 'tingles'. It was little more than a bingo hall with a couple of strobe lights and a few coloured filters that helped distinguish it, by a very fine line, from a 1950's 'country' (i.e. culchie) ballroom.

Memory can play tricks on the mind, but I recall the jubulent response from 'the boys with long hair' anytime Jimmy Hendrix was played. It didn't have to be 'Hendrix' of course. Anything by 'The Quo' or AC/DC would suffice.

In an instant, a swarm of spotty faced teenagers would gather in a circle and in a bid to outperform Hendrix, played  their imaginary 'guitars' with a  gusto that would have seriously impressed the great man himself.

With hair flying and a faces like constipated gerbils, the young rockers would ditch all self consciousness as they plucked, flung and fretted their virtual instruments with feckless abandonment.

I seem to recall performing an aria or two myself. I remember being really impressed with how I performed to 'A Whole Lot a Rosie'.

Afterwards, I struggled to understand why my fingers wouldn't work when I tried to get to grips with a friends Gibson. Why wasn't I able to perform in the real word what I had clearly mastered in the virtual world.

I don't know about you, but I see a lot of people in the selling business who are virtuosos in their own mind but perform like well dressed heffalumps in front of a prospect. Any pressure from a prospect and they wimp, cave and crumble. They act like like those 'talking' dolls where you pull a string and out pours the latest digitized buzzwords created by some back office product marketer.

Is it their fault though? Is the hiring and recruitment process to blame?

Aren't most interviews little more than 'air guitar' auditions?

What do you think? 

What do you have to do?

Paul Lanigan, Sandler Training

I just heard a business consultant give the following advice;

Thank your customers, regularly.

It's hard to argue with this. The subtext is that you should be grateful for their business and you should demonstrate that gratitude.

I'm not suggesting that you don't thank your customers. That would be crazy.

The question you should really be asking yourself however is;

What would you need to change about your business and how you engage with your customers so that they are thanking you.

Think about the advantage that would give you.

You don't qualify an opportunity, you qualify your time

I was watching Mad Men the other night. I don’t know how you feel about the programme. I love it. Like every great character in any story, Don Draper, the lead role, is not without his flaws (he’s impatient and deeply uncomfortable with his own self concept).

Although dramatically over the top, I love his approach to selling. In a scene from the first episode of the fourth season, he is busy berating a colleague for bringing him a poorly qualified prospect.

“I have to account for every minute of my time” he snarled at his underling.

This statement struck a chord with me because time is the only commodity we have when selling.

You cannot sell yesterday.If you don’t know or are not clear on what you want time to do for you, then how will you know if an activity is making the best use of your time.

People who are goal oriented, focused and driven, qualify hard. They’re not qualifying the opportunity. They don’t care that much about the opportunity. They’re qualifying their time

Are you Financially Independent?

“How and when you discuss money during your sales process has a greater impact on selling success than your price”

A few years ago, I engaged the serivces of a Dublin based PR company to help me promote an event I was organising. I found the two partners of the firm to be pleasant hosts and experts in their field. After a few minutes our conversation moved from small talk to the business matter at hand. It was a fairly straight forward deal so we had  almost concluded our  meeting within an hour. There was just one important matter we hadn’t yet discussed – money. It didn’t look like they were going to bring the topic up, so I looked the two partners in the eye and said “we should probably talk about money now!”

Their response was intriguing. One of the partners shifted uncomfortably in his seat, the other went bright red, turned to her colleague and tellingly stuttered, “this is where I leave you guys to fight it out” and she left the room.

Both were clearly uncomfortable discussing money. Their attitude towards money was undoubtedly hurting their pocket and doing nothing to inspire confidence in me.

We all grow up with a conceptual view on money. Think about how money was discussed in your home. Perhaps it was rude to talk about money? Maybe you grew up with a belief that money was scarce (“money doesn’t grow on trees you know”).

If, like me,  you studied The Merchant of Venice in school, perhaps you’ll recall the dark, money lending character Shylock who wanted his ‘pound of flesh’?

Recall the imagery from Yeat’s September 1913.....

“But fumble in a greasy till

And add the halfpence to the pence”

Consider some biblical references to money.....

“Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God”........

and my favourite..........“The love of money is the root of all evil”

It’s no wonder that we look forward to discussing money as  much as a visit to the dentist.

The problem is that if you are uncomfortable because of these ‘hidden’ money messages, you will without doubt communicate your feelings to your prospect. The real problem is that your prospective customer doesn’t automatically associate the discomfort he observes with your childhood messages! It’s much more likely that he will interpret your discomfort as a lack of conviction and confidence.  The minutest hesitency, sideways glance or voice inflection is liekly to trigger your prospects unconscious defense system resulting in stalls, think it overs and delays.

None of these options helps you close the sale.

Worse still, because we avoid discussing money, we fail to set the ground rules on how and when we are going to get paid. Merely putting your terms in an email or referring to them in your proposal or quotation, does not establish an agreed set of mutually acceptable ground rules.

The result is that we may end up putting ourselves under financial pressure and find ourselves chasing customers for payment. This invariably means we’ll incurr  avoidable overdraft fees and the overhead of credit controllers.

Far better to look your prospect in the eye and say “John, one of the conditions attached to my offer is that I get paid on time, in full, every time. I never want to have to chase you for payment. If you can’t make that commitment to me now, we can shake hands and part on friendly terms, but let’s not do business. Are you comfortable with that?”

You may of course fear that having such a frank money conversation may cause your prospective customer to back off?

Not if you have sold him on doing business with you. Let’s face it, if a prospect isn’t willing to commit to paying you on time, every time, when do you want to find that out?

So, if you want to avoid price pressure, discounting and tighter margins and you want to get paid on time, every time, adopt a different attitude towards money.  Imagine you believed that you were ‘financially independent and you didn’t need the money’ what would you say and how would you sound?