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SALES PROCESS. Bosworth & Kenney Presentation February 20, 2010. Why the Customer’s Side of the Equation is Important. There cannot be a sale without a buyer.

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SALES PROCESS

Bosworth & Kenney Presentation

February 20, 2010


Why the customer s side of the equation is important
Why the Customer’s Side of the Equation is Important

  • There cannot be a sale without a buyer.

  • A seller’s role is helping the prospective customer to buy, while ensuring the optimum Customer / Applied Systems Technologies experience

  • It’s important for the seller to know where they are in the prospect’s buying cycle, and then walk with them through the rest of their buying cycle while tracing to the sales process

2


Selling issues
Selling Issues

  • “They wouldn’t let me in at the right level.”

  • “ Our services are perceived as expensive and non-essential.”

    • “We got in too late.”

    • “I get drawn into premature pricing discussions.”

  • “If only we would have discounted.”

  • “I lose control of our prospects at the end of the sell cycle.”

  • “Our representative did a poor job on the presentation.”

    • “IT squashed the project due to resource limitations.”

    • “We couldn’t get consensus from the committee.”

    • “I thought the RFP was “wired” for us…until”


  • Key Components of this Presentation

    • Adopting World Class Sales Organization “Best Practices”

    • Review of how people & organizations buy

    • Aligning sales process to the prospect’s buying process

    • Exposure to the following selected selling skills:

      • Selling services using a Sales Process

      • Business Development

      • Identifying a prospect’s Goals, Problems or Needs

      • Diagnosis of the current situation and economic impacts

      • Identify and motivate the key players in the buying decision

      • Matching the Buying Cycle to the Sales Cycle

      • Negotiation, at the close and during the entire sales cycle

      • Leveraging successes to sell more


    Why a World Class Selling Organization?

    • Sales Benchmark Index is the world's leading sales benchmarking advisory firm that helps executive leadership understand how well they are performing relative to a peer group and the World

    • Sales Benchmark Index has used empirical data to create a repository of over 11,000 companies, across 19 industries, with 11 years of history and covering over 250 sales metrics

    • On the following pages we will look at the following:

      • Sales performance differences of normal to world class organizations

      • Effects of Globalization and Commoditization

      • Of all the sales metrics, which are the most impacting?



    World Class Selling - Key Components

    • 11,000 companies, 250 metrics, 11 years of historical data tells you here are the 12 silver bullets

    • Sales Methodology

    • Product Usage & Industry Knowledge

    • Sales Management – Coaching & Mentoring

    • Coaching / Mentoring

    • Training

    • Compensation Planning

    • Territory Design

    • Talent Selection & Staffing

    • Budgeting & Expense Allocation

    • Technology Infrastructure

    • Channel Optimization

    • Clearly Define Goals and Assignments

    7


    Alignment with customer s behavior
    Alignment With Customer’s Behavior

    Phase 1Solution Development

    Phase 3

    Commitment

    Phase 2

    Evaluation

    Needs

    Cost

    Price

    Level of Buyer Concern

    Solution

    Risk

    Time

    People

    Product

    Company


    Why a sales process
    Why A Sales Process?

    Sales Process provides a repeatable and verifiable framework for:

    • Marketing

    • Product marketing

    • Sales

    • Production

    • Management

      To maximize resource utilization and economic yield


    Selling competency components
    Selling Competency Components

    Product

    Usage

    Knowledge

    Market

    Knowledge

    CustomerCentric Selling® Skills

    Who puts the puzzle pieces together? How?


    Stereotypical behavior
    Stereotypical Behavior

    Until proven wrong, buyers assume salespeople are:

    Aggressive

    Insincere

    Pushy

    Manipulative

    Obnoxious

    Over-familiar

    Prone to exaggerate

    Inclined to over sell

    Anxious to tell “everything you ever wanted to know”

    Poor listeners

    Likely to do what’s best for them, not the buyer

    Not to be trusted

    These buyer decisions are made in the first few minutes.


    Seller behavior comparison
    Seller Behavior Comparison

    STATEMENTS

    QUESTIONS

    Invite contradiction

    Can cause misalignment

    Attempt to impose your opinion

    Make “conversations” one-sided

    Invite participation

    Facilitate alignment

    Allow you to understand, then seek to be understood

    Allow others to add value

    12


    Positioning Your Product and Service

    If you establish

    VISION & VALUE

    Then you have earned the right to talk about

    PRODUCT & PRICE

    IF not……………. You are just leading with “IT”

    IT


    What will motivate mainstream prospects
    What Will Motivate Mainstream Prospects?

    Fear of potential consequences

    Inaction

    Inertia

    Wrong decisions

    Curiosity about the actions of peers

    How have they addressed an issue?

    Why haven't I been able to?

    The “herd” mentality

    Politics within their organization

    Top-down pressure – exposure

    Bottom-up pressure – competition for their job

    Lateral pressure – impact on other parts of the organization

    Ego

    Executives tend to be competitive by nature

    Executives want to be perceived as thought leaders


    Death of a sales cycle
    Death of A Sales Cycle?

    Typical salesperson or company statement:

    “Our robust, flexible, scalable

    and integrated manufacturing process controls application will dramatically improve your ability to have a 360 degree ubiquitous view of your production while gaining synergy within your virtual organization!”

    HOW?


    Identify opportunities through planning
    Identify Opportunities Through Planning

    Territory

    Territory Plans

    Account Plans

    Opportunities

    Inside Sales

    Industry Accounts

    Named

    Account

    OEM

    Clients

    Direct

    Sales

    Existing Accounts

    New Business

    Opp

    Opp

    Opp

    Opp

    Opp


    Territory and account planning

    Research

    Does Seller have “feet on the street“ in the Company today

    Biographies of key executives & board members of the Company

    Key customers, suppliers and/or business partners of the Company

    Review Company and industry for alignment with Seller’s offering

    Current members and certifications – Length of relationship

    Review & understand up & down stream participants in Prospect’s Supply Chain

    Understand Buyer’s point of view and expertise

    Formulate “attack plan” and map appropriate Selling Team Members

    (skill sets) to the opportunity

    Territory and Account Planning

    1

    Goals – Target new Opportunities

    Tools

    • Linkedin, Company web site, Hoover’s, etc.

    • Review other Enterprise Practitioners for potential similarities

    • P&IM Journal, APICS Surveys

    Deliverables

    • Update Account / Opportunity Plan & Opportunity Manager

    Participants

    • EXISTING CLIENT

    • NEW CLIENT - Salesperson and Account Team


    Initiating buying cycles
    Initiating Buying Cycles

    Goal

    to Improve

    “Not Looking”

    to improve*

    WHY?

    Competitive

    Vision

    Unaware

    Not a priority

    Burn victim

    • Decision maker involved

    • Business goals defined

    • Requirements known

    • Evaluation ongoing

    • Budgeted

    * What % of those ‘not looking’ have the same goals as

    those ‘looking’ to improve?


    Sales productivity
    Sales Productivity

    • Sales growth is each persons responsibility

    • Collective, Cross-Functional Effort for increasing growth

      • Existing customers – expansion across service lines

      • Referrals

      • Industry associations

      • Seminars

      • Web presence

  • Create leverage within your Sphere of Influence

    • Start with your most likely potential Champion

    • Identify two lateral and one senior executive job title

    • Contact all simultaneously

  • Use all methods simultaneously to expand and grow your funnel

  • Get the ‘not looking to change’ to begin to explore looking to change


  • Pre-call Planning and Research

    • Identify key players or stakeholders

    • Identify potential areas for critical business issues (needs/goals )

    • Match up key players with critical business issues (needs/goals)

    • Align your capabilities to each key player and goal

    • Create a “Projected Skeleton Sphere of Influence / Org Chart with

      Key Player job titles and Goals” for the potential opportunity

    • Target most likely Champion

    • Develop Reference Story / Initial Value Proposition

    • Construct a business development strategy (letter, e-mail,

      phone, seminars, etc.) utilizing specific information gathered

    • Proceed with confidence

    Account

    level

    Opportunity

    level


    Stimulate interest

    New Clients

    The salesperson should get the Company’s key stakeholders to:

    Be Curious

    Listen

    Say “Tell Me More”

    Existing Clients…… or New Client who have said “Tell me more”

    Get prospective buyer(s) to disclose to Salesperson a:

    Goal

    Problem

    Need

    Stimulate Interest

    2

    Goals – Need Development

    Tools

    • Prospecting scripts

    • Success stories

    • Testimonials

    Deliverables

    • Update Account / Opportunity Plan & Opportunity Manager

    Participants

    • Salesperson and / or Account Team



    The success story
    The Success Story

    SUCCESS STORY COMPONENTS:


    Success story example
    Success StoryExample

    Plant Manager

    Key Player:

    Poor product quality resulting in recalls.

    Goal or Issue:

    • Process engineers had no access to WIP QA data.

    • Machines breaking down unexpectedly during a batch phase

    • Unable to determine when to perform preventative maintenance

    • As a result:

    • 20% of their finished product was below specification.

    • Out-of-Spec missed at the final QA stage and resulted in recalls.

    Contributing Reason:

    He said that when batch phases were trending out of specification or machines were on the verge of breakdown, that his operators and maintenance staff could be alerted automatically with information telling them what the problem was, where it was occurring and what needed to be done to take appropriate action before the W.I.P. was damaged.

    Capability:

    Benefit Statement:

    We provided him with these capabilities.

    99% of product meets or exceeds specification, they have not issued any recalls, reduced unplanned downtime by 30%, and reduced overall manufacturing costs by £9 million.

    Actual Benefit:


    Beware of the Pretender!

    CAUTION!

    This person may cause you to waste valuable time and company resources. He loves for a salesperson to come in and provide a detailed, custom demonstration, but he is unable or unwilling to introduce you to a decision-level person, But they only want to SEE-MORE!


    Key players stakeholders

    Champion Provides:

    Access to other Key Players

    Information

    Internal Selling

    Decision Maker can:

    Get what they want, regardless of job title

    Facilitate commitment of company resources to an evaluation

    Technical Buyer

    Beneficiary (anyone who directly or indirectly gets benefit from the implementation of Applied Systems products or services)

    Adversary – your objectives are:

    Neutralize or Use Key Players to eliminate

    Convert

    Key Players / Stakeholders

    * Individuals can serve multiple roles. On small transactions, a person could fill all roles.


    CustomerCentric Selling® Core Concepts

    “You Can’t Sell To

    Someone Who Can’t Buy”


    $

    $

    “The Money Line”

    Organizational Example

    Investors

    Change to sphere of Influence

    CEO

    CFO

    COO

    VP

    Manufacturing

    VP

    IT

    Plant Manager

    Director

    MIS

    Process

    Engineer



    BowlingTeam

    Orchestra

    Business

    Low

    High

    Organizational Interdependence

    Source: W. Edwards Deming, Ph. D.


    Organizational Interdependence Example

    CEO

    CFO

    Goal:

    C1:

    C2:

    Increase share price value

    Profits below targets

    Declining Market Share

    Goal:

    C1:

    C2:

    Make Profit Targets

    High costs of manufacturing

    Declining sales and increasing customer erosion

    VP Marketing

    VP Manufacturing

    VP Sales

    Reduce costs of manufacturing

    Reduce downtime

    Goal:

    C1:

    Increase Market Share

    Poor product quality resulting in recalls

    Goal:

    C1:

    Goal:

    C1:

    Increase sales and stop customer erosions

    Poor product quality

    resulting in recalls

    Plant Manager

    Improve product quality resulting in fewer recalls

    Limited and batch collection of W.I.P. quality control information

    Reduce downtime

    Poor scheduling causes long and poorly planned line changeovers and maintenance stoppages

    Goal 1:

    C1:

    Goal 2:

    C1:

    Maintenance Supervisor

    Process Engineer

    Goal:

    C1:

    C2:

    Improve frequency and time delays in the collection of W.I.P. quality control information

    QA samples are taken manually, and can only be taken at the end of a production run.

    Improve scheduling to decreased line changeover times and maintenance outages

    Line changeovers are manually tracked and planned

    Preventative maintenance is done manually, mainly on a reactive basis

    Goal:

    C1:


    Conversation introduction

    Establish rapport

    Confirm agenda

    Demonstrate SINCERITY and COMPETENCE by explaining:

    Personal background

    FACTS about your offering – aligned with the stakeholders’ perceived interests

    What happened with another customer (success story)

    Ask Company stakeholder to share a Goal, Problem or Need

    Conversation Introduction

    3

    Goals

    Tools

    • Conversation Introduction Sheet

    • Seller’s Organizational Facts (# of employees, locations, # of experts, etc.)

    • Success stories

    Deliverables

    • Update Account / Opportunity Plan & Opportunity Manager

    Participants

    • Salesperson and Team


    Call introduction
    Call Introduction

    • Establish rapport (a few seconds of silence)

    • Meeting Objective

    • Brief personal/company background

    • Review progress to date

    • Success Story


    Call Introduction Example – 5 Minutes

    • Establish Rapport (Let the prospect set the tone for the meeting)

    “I appreciate the opportunity to meet with you.” (Four seconds of silence)

    • Call Objective

    I would like to confirm the agenda we had set for this meeting; which was to 1) briefly introduce you to XXX; 2) explain to you how we have helped another manufacturer improve quality; 3) have you share your manufacturing improvement objectives. Are there any items you would like to add or change? Is this agenda acceptable?

    • Background (Establish Credibility)

    I’ve been working in the manufacturing controls and reporting industry since 1992 and joined XXX in 1998.

    Personal

    • At XXX we help our customers improve business results by defining and automating a standard controls process for the manufacturing environment.

      • HQ in Cocoa Beach, Fla; with 14 other offices in North America

      • We were founded in 1991

      • We are the exclusive distributor in the Southeast for Wrongware

      • Some of our Food and Beverage clients include Grey Goose, Budweiser and Quaker Oats

    Company

    • Current Customer’s Situation (Success Story)

      “A situation you may be interested in, involves one of our clients in the food & beverage industry. Their Plant Manager indicated they were unhappy with poor product quality which is resulting in recalls. The reasons for this occurring are the process engineers had no access to WIP QA data and there were unexpected machine breakdowns during batch phases, resulting in 20% of finished product being below specification. Your Plant Manager wants a way when batch phases were trending out of specification or machines were on the verge of breakdown, for operators and maintenance staff to be alerted automatically with information telling them what the problem was, where it was occurring, and what appropriate action was needed before the W.I.P. was damaged.

      But from your position as the VP Manufacturing, could you tell me about your manufacturing process and improvement goals you may have?”


    Need development vision creation

    Interview key stakeholders regarding:

    How they complete a business function today

    What bad things happen doing it that way today

    What are the financial exposures of doing it that way today

    Attempt to expand the scope to other high probability areas

    Bias the needs questioning to Seller’s service offering

    Confirm (recap) your understanding of what the stakeholders said

    Test the Sales Hypothesis: Qualify / Disqualify the opportunity

    Need Development & Vision Creation

    4

    Goals

    Tools

    • Solution Development Prompters (SDP)

    • Value analysis questions

    • Information from other APW’s

    Deliverables

    • Update Account / Opportunity Plan & Opportunity Manager

      • Know the organization, key stakeholders and interdependencies

    Participants

    • Salesperson and Account Team



    Targeted Conversations Example

    Key Players

    Concerns, Goals

    Process Engineer

    Maintenance Supervisor

    Plant Manager

    VP of Manufacturing

    VP of Operations

    Software Developer

    Project Manager

    Others???

    • - Improve W.I.P. Quality Control

    • - Reduce Rework

    • - Reduce Scrap, Waste

    • - Excessive Unplanned Downtime

    • - Increasing Inventory Costs

    • -

    • - Improve Product Quality

    • - Increasing plant Costs

    • -

    • - Increasing Costs

    • - Excessive inventory costs

    • -

    • - Satisfy customer demand

    • Reach targeted productivity goals

    • - Increasing software development cycles

    • -

    • -

    • - Late to market

    • - Increasing development costs


    Converting Features into Usage Scenarios

    TARGETED CONVERSATION: EXAMPLE

    Title: Plant Manager Goal:Increase Product Quality

    Offering: Process Control Software

    Relevant Product Features

    Potential Usage Scenarios

    WHEN batch phases are trending out of spec,

    would it help if

    your operators

    could be alerted via visual alarm on their PC, mobile phone, pager or email, then turn to any workstation connected to the production line and re-adjust parameters with a few mouse clicks,

    SO THAT product quality stays consistent and scrap, rework and waste are reduced?

    PROCESS CONTROL ALERT

    WHEN production equipment is due for repairs,

    would it help if

    your maintenance staff

    could receive an automated work order based on historical trending and predetermined maintenance intervals to their workstation via email, handheld pc, and pager telling them what machine needs fixing, what parts are required and where the inventory is located,

    SO THAT down time is reduced and W.I.P. is not lost?

    ASSET MANAGEMENT MAXIMIZER

    WHEN customer orders change and a modification of the production schedule is required,

    would it help if

    your production scheduler

    could access from their workstation the electronic order, and with their mouse drag and drop that order into the schedule, which would automatically re-sequence the schedule,

    SO THAT you can increase production line utilization and minimize line changeovers?

    PRODUCTION SCHEDULING GUIDE

    CONFIRM: So, if you had (summarize capabilities)… could you (repeat original goal)?

    RECAP: “So the way you do it today is…? Did I understand you correctly?”


    Solution development process
    Solution Development Process

    Goal

    FRAME

    FRAME

    “What solutions have you considered?”

    How do you … today?”

    DIAGNOSE

    DIAGNOSE

    “When…would it help if…your…could…?

    (How much would it help?)

    Usage Scenarios

    Current Situation

    Today do you experience…?”

    (How much/How many/How often)

    CONFIRM

    CONFIRM

    “If you had (capabilities)…

    could you then (Achieve Goal)?”

    “So the way you do it today is…?”

    Vision of a Solution

    39


    Solutions Solution Development™ Prompter

    Title: Plant Manager Goal: Increase Product Quality Offering: Process Control Software

    How do you do it today?……

    What specific solutions have you considered?

    Diagnostic Questions

    Usage Scenarios (Capability)

    Do process engineers have access to real time WIP QA Data. When do QA measurements get taken? Does this result in bad finished product, recalls, waste, scrap, rework? How often? How much? #, %, $, £, €

    WHEN batch phases are trending out of spec,

    would it help if

    your operators

    could be alerted via visual alarm on their PC, mobile phone, pager or email, then turn to any workstation connected to the production line and re-adjust parameters with a few mouse clicks,

    SO THAT product quality stays consistent and scrap, rework and waste are reduced?

    WHEN production equipment is due for repairs,

    would it help if

    your maintenance staff

    could receive an automated work order based on historical trending and predetermined maintenance intervals to their workstation via email, handheld pc, and pager telling them what machine needs fixing, what parts are required and where the inventory is located,

    SO THAT down time is reduced and W.I.P. is not lost?

    Is there unplanned downtime? How often does it occur? How much does it cost? Does the W.I.P. affected by the machine breakdown become waste or get degraded? How much? How often? Can it be reworked? Does it then sell for less? #, %, $, £, €

    WHEN customer orders change and a modification of the production schedule is required,

    would it help if

    your production scheduler

    could access from their workstation the electronic order, and with their mouse drag and drop that order into the schedule, which would automatically re-sequence the schedule,

    SO THAT you can increase production line utilization and minimize line changeovers?

    Is your scheduling done manually? Does the schedule often change? Does this happen in the middle of runs? Does that result in scrap, waste, rework? #, %, $, £, €

    CONFIRM: So, if you had (repeat usage scenarios) could you (repeat original goal)?

    RECAP: “So the way you do it today is…? Did I understand you correctly?”


    Solution development steps
    Solution Development Steps

    • After the buyer shares a goal, problem or need - ask them to describe their current method.

    • Ask diagnostic questions that map to your offering.

    • Summarize current situation and get prospect agreement.

    • Ask buyer what action they can take to achieve their goal.

    • Ask questions to turn usage scenarios (your opinion) into capabilities (buyer’s opinion).

    • Ask buyer if they had all the capabilities, could they achieve their goal. If the buyer agrees, you have created a Solution.


    Competency Components

    Solution Development Prompter™ (SDP)

    Industry

    Knowledge

    Product

    USAGE Knowledge

    SDP™

    Customer Centric Selling

    Skills


    Sales call debrief questions

    Name, title & company?

    Buyer’s goal/s?

    Current situation?

    Capabilities required?

    Economic impact to the person / organization?

    What is their procurement process?

    Who else do we want involved in the Buying Process?

    Next steps?

    Sales Call Debrief Questions


    Document sales plan key events

    Document to the Company’s key stakeholders the major elements of the meetings and interviews with Seller. Possible components:

    The Goal, Problem and/or Need

    Current Situation

    Vision of a Service Offering

    Value of the Service Offering to the Company

    Proposed next steps

    Attempt to negotiate with the key stakeholders a mutually agreed upon Sequence of Events reflecting their buying steps and Seller’s selling steps, which would lead to an engagement or sale.

    Document Sales Plan & Key Events

    5

    Goals

    Tools

    • Letter templates and examples

    • Sequence of Events templates and examples

    Deliverables

    • Correspondence to the Company's key stakeholders

    • Sequence of Events

    • Update Account / Opportunity Plan & Opportunity Manager

    Participants

    • Salesperson and Account Team


    Key player letter
    Key Player Letter elements of the meetings and interviews with Seller. Possible components:

    Qualification Milestones

    1. Goal(s)

    2. Current situation

    3. SOLUTION(s)

    4. Value

    5. Sequence of Events

    • Ms. Isabella Thome February XX, 20XX

    • VP Manufacturing

    • ACME Foods

    • Dear Isabella,

    • Thank you for your interest in SolutionsPT. The purpose of this letter is to summarize my understanding of our

    • discussion. You told me your primary goals are increasing profits by reducing the amount of recalled product.

    • Our discussion led me to understand that you felt that current method of batch tracking of QA purposed was not acceptable and that downtime cause by incorrectly scheduled maintenance was causing excessive downtime.

    • You indicated that your Plant Manager could improve quality and uptime if he know when batch phases were trending out of specification or machines were on the verge of breakdown. This would enable his operators and maintenance staff to be alerted automatically with information telling them what the problem was, where it was occurring and what needed to be done, so they could take the appropriate action before the W.I.P. was damaged or the line was stopped.

    • You agreed with your Plant Manager that the Out-of Spec situation has caused your COG’s to increase 2%, which equals approximately £1,500.000 annually in net lost profit.

    • You also indicated that with improved quality your VP of Marketing has suggested they could improve market share by approximately 1%.

    • You indicated that you are interested in further investigating SolutionsPT. Based on my experience, I suggest our next logical steps are:

      • Confirm we are in agreement with my summary of our discussion;

      • Your review and comments on the attached recommended Sequence of Events

    • I look forward to working with you and your organization.

    • Sincerely,

    • Smedley Butler


    Sequence of Events - Example elements of the meetings and interviews with Seller. Possible components:

    Ms. Isabella Thome - Page 2

    Billable

    £7,500

    Event

    Week of

    Checkpoint

    DRAFT

    1/21

    1/21

    1/24

    2/17

    2/27

    3/24

    3/28

    4/2

    4/14

    4/18

    5/11

    5/18

    5/25

    ongoing

    Phone interview Steve Jones (Plant Manager)

    Phone interview Wanta Buysome (VP of Mktg)

    Summarize finding to top management team

    Prove ABC capabilities to top management team

    Perform detail survey of current systems (2 Days)

    Implementation plan approval by MIS depart.

    Calculate return on investment and present investment requirements

    Send ABC license agreements to legal

    Gain legal approval (Terms & Conditions)

    Visit ABC Corporate HQ

    Review proposal “rough draft”

    Present proposal for approval

    Implementation kickoff

    Success metrics

    *

    *

    *

    *

    *

    *

    * As you notice, at each “checkpoint” we will stop and mutually decide whether to proceed.


    Value analysis

    Determine the major value drivers for each key stakeholder elements of the meetings and interviews with Seller. Possible components:

    Validate and Prove the Sales offering value to each key stakeholder. This can be achieved by:

    Extrapolated the value based on another Seller client’s experience (Reference)

    If applicable, identify and calculate approximate economic impact numbers, based on the Company supplied information

    If possible, help the key stakeholders understand the impact and/or risk of delaying the decision to engage Seller

    Establish value & benefit before discussion of the engagement fee

    Continue to Qualify / Disqualify the opportunity

    Value Analysis

    7

    Goals

    Tools

    • Seller templates and examples

    • Industry compiled statistics

    Deliverables

    • Value / Benefit analysis summary

    • Checkpoint letter - Sequence of Events step completed

    • Update Account / Opportunity Plan & Opportunity Manager

    Participants

    • Salesperson and the Account Team


    Value Justification elements of the meetings and interviews with Seller. Possible components:

    • Value Justification vs. Cost Justification

    • Reasons for participation

      • Initiating

      • Closing

      • To Minimize Discounting Pressure

      • Must be done


    Why value
    Why Value? elements of the meetings and interviews with Seller. Possible components:

    “More than 82% of IT decisions now require a Cost versus Benefit analysis.”

    “A project is 60% more likely to be approved with a cost justification and business case.”

    “Only those solutions that clearly demonstrate a Cost versus Benefit are being considered.”

    “Return on investment is king, and projects with a quick and clear Cost versus Benefit are much more likely to get funding in today’s uncertain business climate.”


    Value Measurement Elements elements of the meetings and interviews with Seller. Possible components:

    What will be measured?

    Who is responsible?

    How much is possible?

    What capabilities will be needed?

    When will this investment pay for itself?

    What is the return on investment?


    Cost vs benefit components

    What will be measured? elements of the meetings and interviews with Seller. Possible components:

    Increased revenue

    Cost reduction

    Intangibles

    Who is responsible?

    How much is possible?

    Benefit Summary

    Cost Vs. Benefit Components

    Solution Development Prompter™

    Title:_______

    Goal:_______

    $

    $

    $

    $

    $

    $

    $

    $

    $

    $$

    $$


    Benefit summary by key player goal
    Benefit Summary by Key Player Goal elements of the meetings and interviews with Seller. Possible components:

    ACME Foods

    Key Player Goal Base Case Improvement Value

    CFO Increase from Sales $3 million NET

    @10% profit margin $300,000 NET

    Increase from Operations See below VP Mfg $2.5 million NET

    VP Marketing Increase market share 5% market today 6 % in 12 months $3 million Gross

    VP Sales Increase sales $100 million $103 million $3 million Gross

    VP Manufacturing Improve QA & Reduce downtime $2.5 million NET

    Plant Manager Improve product quality 50% COG’s 48% COG’s $2 million NET

    Maintenance Super Reduced downtime 7% downtime 4% downtime $.5 million NET


    Benefit and Investment Summary elements of the meetings and interviews with Seller. Possible components:

    Revenue Benefit: (Increase Quality and Uptime- CFO did not want to include any sales increase) Accumulative

    ■ Reduced machine down time (3 hours per week) 150 Hours per Year

    Hourly cost of down time-labor only $3,300

    Reduced down time $500,000

    ■ Improved WIP quality-reduced Out-of-Spec 5%

    COG's $40 million

    Saving in Cog's - net 2,000,000

    Total estimated annual benefits $2,500,000

    INVESTMENT requirements with :

    Software licenses $500,000 Hardware 350,000 Professional Services- Implementation 200,000 Training 50,000 Annual support 100,000

    Total investment (1,200,000

    Net benefits from the investment $1,200,000

    Cost of Delay in Implementation: Total benefits of $ 2,500,000 less annual maintenance / support of $100,000 = $2,400,000 per year OR $200,000 per month.


    How Organizations Buy elements of the meetings and interviews with Seller. Possible components:

    Requirements Company A Company B Company C

    Looking

    Not Looking

    COLUMN FODDER!!!


    Negotiate and close

    Maintain your dignity and fee structure by having the ability and authority to say NO!

    Do not give without getting something. “Quid Pro Quo”

    Give concessions, if any, slowly and reluctantly, but get something first, in return

    Attempt to have the fee be viewed as fair by both parties

    Get the business at your price OR be willing to walk

    Negotiate and Close

    9

    Goals

    Tools

    • Negotiation Worksheet

    • List of prior concessions, if any

    • Value Analysis

    • Practice

    Deliverables

    • Contract Documents letter for final signature

    • Update Account / Opportunity Plan & Opportunity Manager

    Participants

    • Salesperson and Manager


    Buyer tactics
    Buyer Tactics ability and authority to say NO!

    • Typically want (or need) multiple bids

    • May have chosen the winner before contacting the others

    • Won’t let you know you are winning or losing

    • Price negotiate in reverse preference order

    • May fabricate pricing/discounting by competitors

    • Treat all products as commodities (counter with consequence question?)

    • Orchestrate the perfect time to buy (month/quarter/year end)


    The most expensive six words in business
    The Most Expensive Six Words in Business ability and authority to say NO!

    When making a purchase decision, buyers will ask for better pricing. A salesperson’s response sets the tone for the negotiation. One of the most common (and expensive) responses is:

    “Where do we need to be?”

    This response gives the buyer the impression that:

    The seller is not in control.

    The seller has acknowledged discounting is necessary.

    The seller has latitude and authority to discount.

    Whether the buyer’s response is reasonable or not, this question allows them to put a stake in the ground that the seller will have to address. Many salespeople take the buyer response to be the target. Smart buyers begin with numbers below what they are willing to pay.


    Effective habits

    Knowledge ability and authority to say NO!

    (what to, why to)

    HABITS

    Skills Desire

    (how to) (want to)

    Effective Habits

    Integration of Knowledge, Skills and Desire

    “Creating a habit requires work in all three areas…

    It’s sometimes a painful process. It’s a change that has to be motivated by a higher purpose, by the willingness to subordinate what you think you want now for what you want later.”

    Source: Covey, Stephen R. The 7 Habits of Highly Effective People. New York: Simon and Schuster, 1989. Used with permission.


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