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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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slide1

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”
slide4

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
slide5

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?
slide7

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

slide13

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
slide20

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:

slide25

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.

slide27

CustomerCentric Selling® Core Concepts

“You Can’t Sell To

Someone Who Can’t Buy”

slide28

$

$

“The Money Line”

Organizational Example

Investors

Change to sphere of Influence

CEO

CFO

COO

VP

Manufacturing

VP

IT

Plant Manager

Director

MIS

Process

Engineer

slide30

BowlingTeam

Orchestra

Business

Low

High

Organizational Interdependence

Source: W. Edwards Deming, Ph. D.

slide31

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
slide34

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
slide37

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
slide38

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

slide40

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.
slide42

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

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
slide46

Sequence of Events - Example

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

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
slide48

Value Justification

  • Value Justification vs. Cost Justification
  • Reasons for participation
    • Initiating
    • Closing
    • To Minimize Discounting Pressure
    • Must be done
why value
Why Value?

“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.”

slide50

Value Measurement Elements

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?

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

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

slide53

Benefit and Investment Summary

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.

slide54

How Organizations Buy

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
  • 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

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

(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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