Applying the Scientific Method to the Sales Process

I have a strange habit of saving one of my own business cards every time I have a new one (I’m up over a dozen). Thinking about this got me reflecting on the importance of your own title.

My feeling and experience suggests that you don’t want to be called a salesman - that’s a title reserved for sly characters that sell used cars. If you’re an engineer, flaunt it.

One of my favorite titles that I ever had was “Director of Engineering Services”. I was in charge of the sales and marketing department and was initially given the title of “VP, Sales” - yuck!

When I would call on fellow engineers (that’s who I was selling to), I got much more traction with the seemingly technical title than with the flashier sales title.

Most of the times, even when I own the company I’m selling - I don’t use CEO or President, I’ve had much more luck with mid-level technical titles. Your level should be high enough to convey that you can close a deal without running to your boss, yet low enough to suggest that you are on the same plane as your customer - this is why I like Director.

So, talk to your boss and ask to have business cards made up with a title of your choice - offer to pay for it if you have to. And don’t let ego be your enemy, flashy titles are just that, flashy title.

I remember one time, I had a title President and CEO and I was calling on people literally working in the field, they’d shake with a dirty hand, look at my card and say “wow, aren’t you important” with a disgusted smirk on their face - learned a quick lesson there.

Bottom line, put the effort into getting yourself a title that helps you sell to your target customers.

Several years ago I invented a gardening system that let homeowners create their own little garden space right over their existing lawn. Literally all they had to do was water the thing. People loved it, and it was starting to morph into more of a teaching tool for young children than anything else.

We had decent sales through the Internet and boutique shops and catalogs and had preliminary interest from some of the big box stores - although we were shying away from them. To make a long, long story a little shorter, I sold the business to pursue other opportunities that my heart was more into, and thus the point of this post.

The new owners (I still had 25% ownership, but no say whatsoever), never followed up with any of the current customers. I hope that seems as ridiculous to you as it does to me. I would have people calling me saying that they wanted to re-order. When I would pass this information along, my response was always the same: “you’re focusing too much on the small customers, we need to think bigger.” It got so bad that I stepped out of the picture all together.

It ended sadly with them closing the business down because sales dried up. I called some of the customers after the fact and they all said the same thing. They had way too many products to worry about and if someone doesn’t come to them to get their order, they’re not going to chase you down to order it.

So my point should be pretty clear. Keep in touch. If you don’t get another order, why not? What did you do wrong - what did your competition do right? Can you call back after you’ve addressed their concerns? You get the point.

Take care of the bottom end of your sales funnel - it is one of the easiest places to increase sales.

It is absolutely critical that you know all the touch points that your company and product has on your prospects and customers. The vast majority of salespeople out there worry only about their direct touch points, such as calls, visits, emails and the such - but you don’t want to act like that masses, you want to stand out.

We need to think about our sales position as if it were our own business and act accordingly. I’m talking about treating anyone and everyone in your organization as if they are part of your sales team. Don’t like the way the receptionist answers the phone; then write them a new script.

Sit down and go through your company’s entire system to see where your customer gets touched from initial inquiry through sales fulfillment. The list is long and is different for most companies, but here are some examples:

• receptionist
• accounts payable
• accounts receivable
• customer service
• MSDS documentation
• Web site
• building (if it’s a local business)
• shipping documents

Let me just take the last bullet as a quick example. Let’s say that you sell widgets and each one that gets shipped contains a packing list. What does it look like? Most of them look like something thrown together by an intern the day before they left to go back to school. Why not put in the two hours some evening and design a nice clean one to give to your shipping department? Many of your customers will be given a copy of all shipping documents when they receive their package from their shipping department - and for many of us, our customer is also the shipping department.

A messy packing list reflects that you might not really care about anything after closing the sale.

My point is twofold:

1. understand that the sales process involves your entire organization and lasts the entire life of your customer, and
2. take the time to choreograph your sales process and your sales funnel will thank you for it.

When I was pondering starting this blog I talked to as many people as I could. One gentleman that kept coming up as a recommendation was James Durbin of Durbin Media. I emailed him for a quote on designing and setting up the blog site for me.

We talked on the phone for about an hour and by the end of the conversation James recommended that I take a stab at designing the blog by myself to not only learn the process, but to reduce costs until I was sure that I had a sustainable Web presence - which can take a year to determine. He further offered to have me email him when I had it set up so that he could take a quick peek and offer any suggestions.

Why am I telling you this? Because it is a prime example of having your customer’s best interest at heart regardless of any sale that might be on the line. Here were James’s options as I see them (and my personal analysis of each).

Option 1: Close on a sale with me by frightening me into needing his service. This might have worked, I was pretty green at this in the beginning. I’ve only done Blogger blogging previously and the thought of actually coding up my own site was daunting. The end result of this option would be a one-time sale of $x. Kind of sounds like a used car salesman.

Option 2: See me as a waste of time because I’m just starting out and won’t likely be spending a large amount of money. This can be a tempting option for busy people whose time is literally money. I find myself struggling with this option from time to time when dealing with graduate students that want to buy small amounts of material from me.

Option 3: Lend a helping hand and put me on a successful path without closing a sale. This is the option that James chose and it is in keeping with everything we talk about here. If this site grows and becomes more than I can handle, you can bet that I’ll look James up. Or if anyone comes looking for a reference I’d be happy to pass his name along - just look at this post.

So the bottom line is to think long-term and always, always have your customer’s best interest at heart. This is the only way to ensure a full sales funnel.

I recently asked James to comment on his sales philosophy and here’s what he had to say:

Social Media consulting isn’t about just billing hours, it’s about discovering what clients need and determining if your services make sense for them. Most of what I teach can be done without a trainer, but it’s a question of time versus money. Companies can’t get the results without putting one of the two in, and my job is to figure out which makes the best sense. Eric has a great idea for sales engineers, but he needed to build an audience before he put money into the site. Sometimes the best policy is just paying it forward.

P.S. I talked to a lot of other folks that would probably be considered James’s competition - and you won’t see me writing any glowing reviews of their service here!

Who out there likes to cold call? I didn’t think so. But for most of us, it’s a necessary evil. A great way to get prospective leads, as pointed out in our “Where do sales leads come from?” post, is to look up SIC codes that your customers fall into.

You can run to the local library and look up SIC and NAICS codes for businesses that you typically sell to and then generate a list of similar companies. After you generate that list, you cold call your heart out and get to the right decision maker in each new company.

This can often be a dreary way to spend your time, as you might only get to actually talk to one in ten people so I’m not going to go through the steps to make this happen here. It will be covered in another article or two. I do, however, think cold calling should be at least a small portion of your overall lead strategy. I try to spend about two hours a week cold calling once I have a stable customer base. That’s not enough time to wear me out, but it helps bring new blood into the sales funnel.

In our never-ending quest to help you uncover more sales leads for your sales funnel, here is another addendum to “Where do sales leads come from?“.

What we’re talking about here is authoring press releases and newsletters for all your adoring fans - and those that don’t adore you yet.

I’m a firm believer in the power of press releases and newsletters. I gathered hard data that showed a sharp increase in inquiries, and resulting orders, immediately after releasing a press release or newsletter.

A word of caution here - make sure that you have your client’s permission before mentioning their name or even giving any clues as to who they are.

A quick story is in order here, as this is an important point. I was selling into the medical device industry, which is very secretive by nature. My competition was pumping out press releases left and right (literally a few per month) bragging about all the clients that they picked up. I knew the fingered customers would be fuming mad, so I followed up with them innocently congratulating them on the positive press release. Most of them flew off the handle and invited me in to become the major supplier for the program. Interestingly enough, that company still regularly puts out inappropriate press releases.

The beauty of a press release is that you control exactly what is said and they are typically short and sweet - although that doesn’t mean they don’t take some time to craft. The downside is that you can’t guarantee its publication or that your prospects will ever see it.

A newsletter, on the other hand, is much more involved in technical detail. I’ve found newsletters to be wonderful tools of conveying your capabilities to your customers. Many times I’ve gotten busy and let a newsletter slip by a few weeks and would get emails from clients asking me where their next free installment is. The key here is to not make it salesy. It should be informative, lighthearted, and possibly highlight case studies if you customer will allow it.

If you’d like to see an example press release and newsletter, please email me at Eric.Bono@EngineersCanSell.com and ask for a free sample - I’d be more than happy to send you one over.

Yet another sales lead generation strategy that I employ is to contact press release authors. In addition to technical articles, you should also feverishly track press releases of your competitors, customers, and prospects. Whenever something new hits the wire where your product/service could be used, shamelessly contact the source of the release. An opening phone statement could be something simple like this:

Hi Jane, I saw your press release announcing your expansion plans in Houston and was hoping to talk with you for three minutes about your networking needs. [don’t leave time for a response here] I promise that this won’t be a hard sales pitch and at any time during the discussion you are free to tell me that it doesn’t sound like a good fit and I won’t bother you again. Our widgets have been used in similar plants to increase network speed by 60% and I just want to see if we can offer you that same type of value.

This should buy you at least the initial three minutes – keep to that three minutes and ask for permission to talk longer if you need to.

Don’t ever forget that your customers are juggling many business issues that you aren’t privy to. It can be tempting to scream at them because they aren’t doing the logical thing - from your point of view anyway.

For this example imagine that you sell raw material, say plastic pellets, to a company that makes plastic injection molding machines. They buy relatively small quantities, because they don’t manufacture parts in production. Their business plan is to sell machines to industry and allow them to make the parts. So your target here is their customer base, but they are difficult to account for and reach.

On the surface, this might not sound like a set up for a recycling sales example. What you need to realize here, however, is that getting recycled sales with your machine maker friend is orders of magnitude easier than tracking down all their customers and selling to and servicing them on a continuous basis.

So how would you handle this situation?

The Idea

Your idea is to sell large quantities of plastic pellets to the machine maker and have them turn around and directly supply the material to all their customers. Both you and your customer get a cut and you’ve helped your customer create a predictable and repeatable revenue stream. They no longer have to wait for a huge cash windfall from selling a million dollar machine a few times per quarter. They can now count on all their customers ordering raw materials direct with a steady cash flow.

You would not know that your customer has issues with holding out for a big sale and then stocking that money away in case the next machine has a delivery problem, if you weren’t so engrained in their organization. They trust you and value your input to solve their most pressing problems. And that’s what you’re going to do.

The Idea in Action

Assuming that you’ve built a strong level of trust with your machine maker customer, call them on the phone and ask for a visit to discuss “uncovering new growth and business opportunities.”

They will ask exactly what you have in mind and you can reply, “Well, we’ve been trying to think of ways to try to create more repeatable and predictable revenue streams for our company and one idea is to distribute our pellets through you directly to your customers. Of course, you’d get a markup on every pound sold – it would probably make a nice complimentary line to your machine sales. Your customers get the satisfaction of knowing that they have a reliable source of quality raw material at their fingertips.”

“Hmm, that actually does sound like a good idea – I think we’ve talked about this before.”

“That’s great to hear. Do you think we should tie in anyone else at this time? Since I’ll be flying out there and spending a few days, I think maybe we could nail an agreement down on the spot if your upper management could be involved.”

“OK, let me set something up.”

Do you see what just happened here? You went inside your customer’s business and saw an opportunity for a better business model and acted on that idea. You had your customer’s best interest at heart and found a way to increase their bottom line – and yours in the process.

If you do get invited, be ready to close and sign an agreement because they are obviously interested. So you’d have to do your homework and get the correct level of authority to give you a range of circumstances in which you have the freedom to sign the company up for a binding agreement. You don’t want to get into a situation where at the end of the day, they sign up and you have to say that you’ll take it back to your boss for review.

In our last post we provided an example of a simple email sales quotation that you might send a prospect. In this post we’re going to review the hypothetical purchase order (PO) that came in response to that quote. Click on the below thumbnail to open up the PO.

Now what’s wrong with this PO? A quick look reveals two discrepancies with your quotation.

1. The delivery date is two weeks after receipt of order instead of your stated four week delivery. Typically this can be explained by the fact that the engineer gave the correct delivery data to the purchasing agent and it just took two weeks to actually get through purchasing. If you can’t physically handle this delivery, you need to call purchasing and your engineering contact and get this fixed.
2. You quoted your per unit price of $100 based on an order of 25 widgets. Your customer only ordered 10, but kept the same per unit price. If they are well qualified and you think that there may be future fruitful business, I would recommend ignoring this issue and simply fulfilling the order.

For all the sales talk that we’ve been doing, I realized that we never shown an example of a simple sales quote. So here is an example of a short quote that you might email someone. I’m a big fan of emailing quotes out to prospects rather than faxing - it’s the fastest way to fill up the sales funnel.

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Pretty straightforward and there’s not too much to say about it. Our next post, however, will analyze the resulting purchase order (PO) and give tips on what to look for when you get it.

For this example, let’s use an engineer salesman pitching a new stronger and lighter material than steel and he is focusing on landing a major aerospace account to kick the business off. The sections follow the list of questions from the post “Ask the right sales questions“.

Sales questions to ask yourself

• Why would they ever accept a call from me?
  They are interested in using lighter materials to save weight in the airframes. Less weight means less fuel costs and more payload capacity.
• Is my solution the best choice for them?
  Don’t know for sure at this point, but it certainly seems so.
• Do I have high intent here?
  Absolutely, we could both benefit if this works out.

Sales questions to ask your prospect after cold call but before sit down meeting

Me: Hi Sally, I was hoping that you’d have a few minutes to talk about our upcoming meeting. I just want to make sure that I cover some of the high-level topics that you’re expecting me to cover. So what would be say the three key topics that you want to make sure I cover?

Prospect: Well, we really want to see property data showing how your material stacks up against what we’re currently using. Another important point would be price, we have to justify any cost increases with corporate, so we need to give them a heads up early in the process. Thirdly would be your ability to keep up with our production needs.

Me: Fantastic, you mention mechanical data, what properties most interest you and do you have any minimum values.

Prospect: Our main concern is tensile strength and low cycle fatigue properties and the minimum values are X and X.

Me: OK, sounds good so far, you also mentioned a cost justification – I’d like to start providing you with that information right from the start. Can you tell me a little about how you measure costs and what they typically are?

Prospect: We say that we only care about life cycle costs, but the initial purchase price is what really drives our purchasing decision.

Me: Hmm, I doubt that we’ll be competitive when the initial purchase price is the main purchase discriminator. Is there someone in your organization that we could invite to this meeting that could help explain how we could better position our life cycle cost advantages.

Prospect: I’ll ask our CFO to sit in.

Me: Alright, you also mentioned a concern about our production capacity. Valid concern. Do you have a feel for what your annual demand would be?

Prospect: We use about 10-tons of material and that should stay steady for at least the next five years.

Me: Well, as you know we’re a small company, but I think I’ll be able to adequately convince you that we won’t let you down when delivery time comes. Perhaps later in this process you and your team could stop in for a tour of our facility.

Me: I don’t want to take up much more of your time. Is there anything you think I should have asked you or anything else that you’d like me to prepare before our meeting?

Prospect: No, I think we’ve pretty much covered everything.

Again, I could go on and on with this example, but I think the main point should get across. You are feeding off of your prospect’s previous answers to fuel your follow up questions. Your goal is to understand their technical and business issues at least as well as they do.

In a previous post on sales negotiation, I talked about dealing with the annual drudgery of meeting with your whale accounts and ponying up the demanded cost reductions. I got a few emails asking for more details on possible cost reductions - so here they are. Follow these and keep the whale accounts flowing out of your sales funnel.

What irks me most about these demands is that they are typically totally arbitrary. “We want a 5% annual discount!” Where did that 5% come from. Anyway, we went into details in the previous post, so all we need to do here is list the cost savings. As I mentioned, a lot of clients complain that they don’t have the cost savings to give up; and I argued that we never failed to find them - here’s some of the detail of that.

It’s difficult to give generalized statements here, but cost reductions can include:

• getting them to agree to a lesser quality standard that you know would still be acceptable to their customers,
• acquiring larger overall purchases from them to take advantage of economies of scale,
• having them give less orders per year in favor of fewer larger orders, this can save on tooling switches, handling, etc.,
• getting them to make slight product or design changes so that manufacturing costs can be reduced, or
• having them agree to allow less quality studies if your quality has been stellar; in other words if you experienced a 1 in 100,000 failure rate over the last five years and you’re pulling 1 in every 5 widgets off the assembly line to test, that’s an unnecessary expense.

Now you need to be strategic as to how you present these to your buyer, but that can be different for each situation.

I’m up for a challenge if you think you don’t have cost savings - let me know!

There are so many purchasing scenarios that it might seem difficult to choose a representative example. If you really look at this layer, however, the steps don’t really change much regardless of if you’re selling chewing gum to Wal-Mart or heating shields to NASA.

Setting the stage for this example requires you to picture yourself as a raw material provider to a medium size business that is making a lot of money by turning your material into finished goods. You have competition, but your two advantages are that you are the only domestic source and your quality is second to none. Your weaknesses on the other hand are price, and lead-time.

Based on all your work up to this point, you know that they really want a domestic source for this product and it might even become mandatory in the future. They like your quality, but others are also acceptable. You need to work on lead-time, and then there’s the price issue to deal with.

You go in with your zero-surprise proposal^™ and go over it in detail with your contact Sally. No surprises are found and she assures you that it will fly through procurement and you should see an order in about a week.

A week passes by.

Another week, still nothing, but you don’t want seem desperate, so you don’t call.

Finally on the third week you call Sally and she doesn’t even know where it’s at in the process. Perhaps you should have scheduled a call two weeks ago. At any rate, she checks into it and Jack the CFO has it. You’ve never met or even heard of Jack, but he now controls your destiny. You ask Sally for permission to call on Jack and she gives you his number.

“Jack, this is Eric on the line. I’m calling to check and see if you have any questions on our proposal.” “To be honest Eric, it isn’t that big of a priority to us right now and I haven’t even looked at it.” “Oh, I see. I must have misunderstood Sally; I thought you needed this material delivered by the end of next month in order for you to win the GE account?”

Complete silence…how could you possibly know that!!!

As the oft quoted saying goes – knowledge is power.

Jack thought he had the upper hand because you’ve never met him and he has a big scary title. But if you did your homework, you have the leverage because he doesn’t know exactly how much you know.

“Jack, are you still there?” “Uh, yes. Well would you be willing to come in next week to present your best and final offer.”

Oh how the winds of desperation have shifted.

You now have the leverage, don’t give it up. You are providing a valuable service and helping your prospect get a large amount of business and deserve to be properly remunerated for it.

As mentioned in the general post on sales negotiation, keeping your sales funnel full depends on a continuous flow of successful negotiations with engineers and their buyers.

A quick example of the whiteboard strategy follows. The scene is that your buyer just said they want to negotiate your proposal and you walked up to the whiteboard to list out the issues and had them rank them in order of importance - you secretly know your own rankings.

Looking at the relative ratings reveals instant compromises that can be made to move the sale along quickly. For instance, it appears that you might be able to offer holding a certain level of their inventory on consignment if the price could be increased by just 0.2%. Also, you might be able to work in a second shift to expedite lead times if their minimum order levels are raised 10%.

See how it works? You simply exchange what’s important to you for what’s important to them. It’s all done in good faith, but I like to keep my ratings secret to have a little extra leverage.

In our last post, we talked about how your customer might bring in the big guns with Jack, and how you can mitigate that situation. Now that you’ve dealt with Jack, we’re most likely back to the original team, possibly with jack as an observer. You will probably be asked to come in for a final proposal with your “best and final offer.” Translation: “You better discount your price if you want our business.”

What happened to all the camaraderie that you built up with everyone? It’s out the window for now my friend. But don’t fret, after slushing through this process, your relationship will be right back on track - business is business after all.

At any rate, oblige them and go in for a presentation. Only we’re going to do it with a twist. All of your competitors are going to offer a price break and have a professional presentation bragging about how many divisions and people they have and showing all their glorious equipment with pictures taken at least ten years ago. You’re going to do something quite different.

Your sales presentation, in contrast, is going to be professional but understated. Your presentation is going to focus on what could go wrong during and after the project.

What? This probably goes against every fiber in your being. You should be boasting about how big and great you are and how happy they will feel with you. Why would you want to bring them down with a dreary presentation about everything that could go wrong? Because:

While you’re thinking of how great it will be to receive all that money, your prospect is thinking of how much she is sticking her neck out by spending all that money.

Put yourself in her shoes (and take off yours first). She has probably had nightmares about all the things that could go wrong and doesn’t want to talk about them. Ignoring them and hoping that they won’t happen is much easier than fleshing them out and dealing with them. But by you bringing them up and confidently displaying how you would deal with each situation, you will show experience and, more importantly, competence.

You can close with, “And as fro the best and final offer, that really what we originally presented to you. If you need me to shave 0.5% off to close the deal I can probably do that, but we came in with that offer to win this business and solve your needs, so we don’t really have any wiggle room.” Again, remember that anything you give up here will be the defacto norm for all future dealings with this company.

I once told a bully buyer that instead of honestly quoting work in the future, I would quote it higher so that I could subsequently discount it and make it look like he was doing his job. He promptly kicked me out. I’m now often welcomed back - and he’s not.