Monday, July 24, 2017

Opportunities – There’s more to it than just tracking…

Progressive distributors have learned the importance of tracking and following opportunities in their sales group. For those of you who aren’t following this practice, here is a quick overview of how it works. When sellers learn of a potential for a sale, they log the following data:
The customer - Besides the actual account, it’s best if you log the customer contact who told him about the opportunity.

The product/technology involved – Sometimes it’s hard to identify the exact catalog number of bill of materials, but understanding approximately what the customer may need is required to call this a real opportunity.
The potential size of the opportunity – How many parts will be purchased, how many dollars will the customer spend or what does the current budget for the project look like are all questions which would allow an order of magnitude estimate of the size. For OEMs, we recommend understanding the size of the opportunity per year. For example, $1,000 per machine and the OEM manufacturer’s 100 machines per year would equate to a $100,000 opportunity.

Where or how the customer will use the product – It’s important to understand how or where the customer plans to use the product in their facility if an end user or in their machines if they are an OEM.

An approximate time frame – Is this a project which will happen in the next six months, in the December of next year or just sometime in the future? The better you know the approximate time of the purchasing decision, the more efficient the application of selling time.

Distributors who track opportunities understand that not all opportunities will turn into orders for their organization. Many sellers make the mistake of only tracking the opportunities which they feel confident of getting the order. In truth, understanding potential opportunities likely to not fall to the “home team” is equally important. Further down the road, a competitor may experience some kind of game changing turbulence which might reshape the odds of success. With these points in mind, here are a couple of other things to track:
Perceived chance of success – What are the current odds of getting the order? I prefer this to be listed as a percentage. Obviously, this is subjective. Further, it’s fairly common for the chance of success to shift over the life of the opportunity. Customer breakthroughs improve the odds, setbacks and new competition might dampen the hopes of victory.

Competitors in play – Strangely, many “experts” advise sellers to ignore the competition. I believe the competition plays a major role in planning your strategy and understanding your situation. Are you going up against a price cutter, technology powerhouse or a company with a long history with your customer? It matters.

You have the opportunity identified, now what?
Salespeople and their teams are more successful when they do more than just identify opportunities. As straightforward as it sounds, many folks fail to scientifically explore ways to strategically improve their position for capturing the business at hand. Let’s spend a few moments looking at things we should think about for moving our chances of success forward.

Do you truly understand the justification for the purchase? No matter how sexy and sophisticated your product offering, very few companies are making the purchase, just because they want to own one of your shiny new special widgets. In our world, there is either an underlying reason for the outlay of cash or the project will hold zero chance of success. For end user customers, justifications center on improved productivity, reduction of waste, lower operating costs, compliance with government regulations or improved worker safety. OEMs look to improve the marketability of their products (add new features, improve speed of operation, etc.,) reduce production costs, match government standards and find ways to drive down the price of the machine. The more you understand about the customer’s purpose and justification, the more closely you can fine-tune your solution.

Do you understand the decision making process? Regardless of what some people will have you believe, there are usually multiple people involved in the decision-making process. For example, have you ever had an engineer tell you your solution looked great, but later said “the project is on hold” or cancelled? This clearly indicates there were others playing a role in the decision and they decided not to buy. Similarly, purchasing/procurement departments will insist they are the final decision maker as a negotiation ploy. Truth is, they are rarely, if ever, more than a small part of the verdict. If you don’t understand how the buying decision will be made, ask. Actually, ask several customer contacts. Compare their stories, ask questions, do some detective work and learn how this will happen.

Have you identified all of the decision makers?
Before you say yes, reread the question above. Do you really know all of those involved in the decision? Typically, there are multiple types of people involved. They all have different outlooks and will be looking for the seller most likely to match their needs. Here is a quick list:

1) The Technical Buyer is usually someone in engineering or maintenance
2) The User is the person who will put the solution to work (think production)
3) The Economic Buyer is the most often ignored buying influence by distributors, which is a mistake since these buyers control the dollars for the project and we all know a sale won’t happen without money changing hands
4) The Coach is typically a person who works for your customer but is not necessarily involved in the buying process. They provide insights and help you navigate through a sea of people.

Are there people who might give insight into the decision making process?
If you recently inherited an account, the previous salesperson or your sales manager might understand how decisions are made. So too, might experience rich supplier sales people. Ex-employees of your customer might assist and as could your Coach contact at the customer.

Have you engaged everyone within your organization? Modern selling is a team sport. Every customer touches up against a number of people in your organization. Often, customer service and technical people are not viewed as a “threat” by customers. They sometimes hear idle chit chat which makes them privy to information that might not come to the surface on sales calls. Do they know things about your opportunity? They might. Extending, if you brief them on things to look for, they might be able to move your position forward.

Do you have the support of your supply-partners?
For distributors this is a critical issue. If you operate in an environment where other distributors sell the same brands as your company, soliciting supply support is not just suggested, it’s mandatory. The supplier needs to understand you have identified the opportunity and are working on their behalf to turn it into an order. Because even mid-sized opportunities can turn competitive these days, Special Pricing Agreements (SPAs) often come into play. Do you have one locked in? Further, many suppliers have special resources to assist in your efforts to convert the business or create a new application.

Please note: this comment isn’t about turning the work over to the supplier, instead think of an alert – their support may be needed on short notice.

Customer situations are fluid, periodic review is needed.
The situations with customers can change. For instance, unexpectedly large orders can impact plans and schedules. Similarly, downturns in order volume, issues with other peripheral equipment and other business dynamics create changes in plans. Salespeople must monitor the situation, all the while working a plan to maximize their chances of success.

I recommend visiting your opportunities on a bi-weekly basis. For each of these, you can determine what current actions might improve your odds of successfully closing the deal. As you work your way through the list, ask yourself what pieces of information might drive your position forward. To assist you in your thought process, here are a few quick points to ponder:
• Do I know all of the decision makers or are there people I should meet?
• Do I understand the decision making process? Could I find a coach who can explain how the account makes decisions like this one?
• Are there support or technical people in my organization who might be listening for clues on the order from their dealings with the customer?
• Update your supply-partners on the situation. Sometimes they discover things on their own, which could be of value to your efforts.

There are at least 100 other things you could do or should do. If you have a situation you would like to chat about, let me invite you to shoot us an email. We’d love to hear from you.

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