Talk to Higher Level in Organization To Move the Sale Away from Price
Selling to higher level in an organization enables you to close more strategic business opportunities: long-term deals, big ticket sales. Article based on presentation at NWPCA annual meeting.
By John Rosso
Date Posted: 4/1/2000
Over time the process of selling has become dysfunctional. Due to the negative stereotypes, buyer distrust and poor salesmanship, the buyer has put up defense walls. These walls in turn make the way our customers buy dysfunctional as well.
Traditionally sales has ended up taking on one of three faces. The first is TELL. The sales person tells all the wonderful features, advantages and benefits of his product and services without getting any real understanding of our customers real needs and opportunities. It is one-sided at best.
The second face is we are TOLD. The customer tells us exactly what they think they need, how many, what materials, the logistics — even the price. Our product or service is treated like a commodity; there is no value added. We are expected to react, respond and give prices.
The worst example of this is the customer Request for Proposal, or RFP. Human beings are taken out of the equation. We have moved away from any real problems or opportunities the customer has. We are a commodity. This, too, is one-sided.
Finally, the third face of dysfunctional selling is to GUESS. We ask a few questions, uncover a need or two, and then are asked to put together a quote or a proposal. Frequently we guess wrong. Time is wasted. No value is created. Perhaps the need is not strong enough to take action and nothing happens. We are probably price-shopped.
Each of these methods is consistently used today, and you have probably gotten by using them. But things are changing more rapidly than ever — technology, global competition, and so on. There has to be a better way to break out of this buyer-seller ‘dance’ — a more effective way to truly partner with customers, to break away from the dysfunction and get paid fairly for helping your customers succeed.
People are always looking to turn pallets into a commodity. With any kind of commodity, you’re going to see a decline in value of the business selling them. Margins begin to shrink, and loyalty begins to disappear.
Customers have begun to make it a price, price, price issue. There is certainly a culture of price, price, price in buying and selling pallets. The only way to break out of it is to stop it, to stop reacting to it.
When the pallet company owner or salesman gets in front of the customer, he is the last line of defense. If he caves in to price, he is by default creating a strategy for the business that is a price strategy. You can have grandiose ideas about service, of acting as a consultant, of improving logistics, and so on. But if it breaks down, you’re competing in a price world.
As buyers mentally begin to view a product or service as a commodity, they move farther and farther away from the actual thing they are trying to do in the first place. The buyer says, ‘I need 400 of these at a certain specification, a particular type of wood,’ and so on. The farther you move away from the problem, the more likely the decision will be based on a commodity price.
In fact, this already has happened. Picture a slide. At the bottom is this commodity price mind set, and this is where a lot of companies are that buy pallets. The pallet salesperson needs to lead the buyer away from this position, up the slide to the real reasons he wants the product in the first place. As you move up that slide, the buyer moves away from a commodity-price outlook.
One of the first things that people have to learn is that buyers have gotten very good at controlling the selling process and keeping sellers in a box and taking up time and energy for unpaid consulting. Then ultimately they don’t do anything or they turn it into a price game.
We need to put strategies and ground rules into place in order to talk to a higher level in the organization. When you do that, you move off price and you begin to talk about what the real business issues are and what problem they are trying to solve. Then professionals on two sides can decide if there is a decent match or fit that warrants pursuing it further. If they want to pursue it but are focused on price, tell them up front it might not benefit you.
When you can have a deeper level of conversation, you can bring a lot more value to the table, and that value is worth a lot of money. This kind of salesperson is going to be the best value but hardly will ever offer the lowest price.
Selling to a higher level in the organization enables you to close much more strategic business opportunities — long-term deals, big ticket sales — instead of selling at lower levels and competing on a price basis.
What you have and do is valuable. Unless you can talk on a business level about the customer’s real business problems, maybe the best decision is to walk away. If you can talk to people at a higher level, you will have a higher level of success. It takes guts, and some people don’t believe it will work. Some people just want to throw a lot of stuff on the wall and see what sticks, and then fret about margins going down.
In price sensitive markets, sellers cripple themselves. The buyer is in control. If you’ve made that determination, if you’ve decided that your product or service is a commodity, margins are going to shrink and life is only going to get tougher.
Too many people develop a handful of good accounts that generate over 50% of their business. If their customers don’t appreciate value, the margins still get squeezed, squeezed, and squeezed. Now they’re not that profitable, but you can’t let them go because they’ve got more than 50% of your business.
It takes two things to move to this higher level. One is technical or conceptual. The conversations you’re going to have at higher levels are different, so you have to take some time and learn some things. What are the concerns they have? A given product at the lowest price is not the only objective of the company vice president. You have to break some habits and get out of your comfort zone because you’ve spent most of your life talking at a different, lower level.
The second thing is tactics. When you get there, how good are you at leading the buyer away from a commodity mind set to a mind set that says you are the real solution regardless of the price?
You must develop a system that has, at its core, the best of intentions for your customer and your own company. This system is not easy and requires breaking years of bad habits — both on your side and your customer’s side.
First, two-way communication must be established. The salesperson has to cut through the clutter and bring down the defensive walls of the buyer. The best way to do that is never to act or sound like a stereotypical salesperson. Develop effective communication skills and learn how to be disarmingly honest. Honesty in communications means being able to tell a prospect, "I don’t know if it makes sense for us to do any work together, but maybe we can take a few minutes to have an open discussion about our two organizations, and then we can decide together whether or not we should continue talking."
Next, the seller must be comfortable talking to the buyer as to what a win-win buyer-seller process might look like and gaining agreement that it makes sense to follow the process. For instance, the agreement might include that rather than TELLING, BEING TOLD or GUESSING, there is a commitment to discuss actual concerns, issues, challenges, and expected outcomes. Then, if it is appropriate, to continue discussing the resources necessary — in time, money, people, etc. — to achieve the solution. The final step would be a discussion about the steps of the buyer’s decision making process, access to the people who are part of the process, and a mutually agreed upon time-frame for making a decision.
Finally, if these things have been discussed openly, including the resources required and the potential benefits to the buyer, and the decision making process is clearly understand, then we can move forward to present a real solution — one that is in the best interests of the customer because it achieves the desired outcome or produces the intended benefits. In this way, we know exactly what we must deliver and the customer knows what he is looking to accomplish. It’s a win for the customer and it’s a win for the selling organization. We have risen above dysfunction and commodity.
This is not easy to achieve. We have to break some of the rules of traditional selling. But the pace of change is rapid, and unless we adopt a superior selling methodology, customer loyalty will continue to wane, margins will continue to shrink, and price will be the determining factor. Time, energy and money will be wasted. It’s time to sell as professionals.
(Editor’s Note: John Rosso, founder of Peak Performance Management, is a nationally recognized business development expert. He specializes in executive sales consulting and sales productity training. This article is based on a seminar he gave at the annual meeting of the National Wooden Pallet and Container Association.)
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