A BREAK FOR INTROSPECTION

Hello Friends,

          I’m back from my sabbatical. Now, before going, I was having a tough time here finding sales subjects to write ABOUT. Perhaps, you guys are thinking that “Holy Shit! This guy’s flipped”, but it’s completely true. I’ve covered more or less most of the areas in selling capital equipment Sales, which deserve mention. I had no interesting points. Moreover, as you may appreciate, everything in this blog, is what I believe in, what has occurred or I believe can happen. I have never used the textbook approach to blogging. 

( that is , take a textbook and write about all the interesting words you come across, making it look like things you know or /and have experienced). So, I went in for an 

INTROSPECTION AND OBSERVATION session. 

         Post introspection, I find that there IS a problem but what about us introducing a not sales only but combined with Marketing and Business Management subjects. If that sounds funny to you, think about it this way. We were discussing selling Capital Equipment and /or Industrial Marketing. We will still be doing so but with the nuances of management science weavings into the fabric at random points. 

        So seat tight and put on your seatbelts. The show ain't over yet, not by a long way. 

Finally, on the International Women's day, join me in supporting women's empowerment, with this song of John Lennon entitled "Woman"

With lotsa love
Bilbo Hobbit

SELLING BY RESEARCH: The Concept of SBR

This blog is proud to say that the phrase "SBR " which stands for  'Selling by Research"was first coined here and the SBR techniques which have been lightly touched here is ORIGINAL to this blog. The idea first germinated here in the form of the written word.

Many Sales/Business Development Managers/General Managers/even VP's think that the more prospects, a salesperson visits, the better. Never mind, if it lays emphasis on quantity rather than quality. The Manager has the data to justify his sales forecasts for the next quarter. And at the month end, when the CEO is surprised to see that the sales person has visited the highest number of potential customers but has flopped in actual selling, the same manager will tell him “there is something wrong here, you lack application, you lack communication skills” the newbie can hardly say that the strategy was devised by the manager himself.  "Gee!! that’s not fair" you may say but trust me, these kinds of managers do exist and they are in the majority.

                  In industrial plants and manufacturing organizations, decision makers have no time to entertain sales-people on fishing expeditions. In Industrial Marketing, which comprises of selling of high or medium value systems, “cold-calls” can backfire on you. Before the net, cold calls were a must. Information is power.Cold calling in industrial marketing was done for collection of market information. Having information gave a party an immense advantage over its competitors. Today, the internet can help your sales-people to collect all information about prospects, making cold-calls redundant.

     " We live today in tumultuous times. In the future, people will think us as the most lucky people for never before has a generation witnessed such sweeping technical and socioeconomic changes within such a short time. If you want to survive, you need to adapt, to change with the times unless you want to be extinct. "

The Internet as an Information Source

          How do you collect information from the internet? Check websites of service providers usually involved in projects.  A few website types, where information is available free are as below. (This is only a partial list and you can find many more classes if you are interested)

(1)B2B trading portals and Business Directories: These contain all information and all you have to do is collection and compiling. 

Screen Shot of site. Look at the projects link at the lower right

(An example is http://www.processregister.com  which has a section on projects, which gives the location, value, status and the promoter. The website even has the projects classified sector wise. What else do you need?)

 Different types of projects classified typewise

 

(2) Job Portals: These give out information in the form of “Project Managers required for…” or “We require for our new project…”

(3) Websites of Consultants: Consultants often give out details of new consulting jobs they are working on, or have bagged.

If you think that you will get full details of a project from tapping into the above or similar resources, you will be disappointed. What you will get is “leads”. You will get all your detail information then by doing some web research on these leads.

Industrial Marketing &Selling initiated by researching the web, has been named SBR (Selling by Research)-by yours truly because it appears that I am the first person to discuss about this site in public, for which unfortunately processregister.com is not paying me anything. 

SALES vs. REVENUE

SALES vs.REVENUE          ____________

Mirror, yes...  you!, Mirror on the wall

Among Sales and Revenue, who is more
 likely to  fall?

Well, good sales figures will make your mid-term report sleek,

But with no revenue, your future (at the year end) appears bleak. 

       And so would any self respecting magic  mirror have said had it been in such a position that it could answer questions. ( I am actually surprised that Rowling did not have any magic mirror in the entire Harry Potter series Yes, there were all moving photographs but then a mirror is a mirror. Wait a minute, there was one in the first right?.. that's enough of mirrors.
Let us go back to the subject).

THE DIFFERENCE BETWEEN THEM

Therefore, we have the modest and suave 'Sales' on one side and the loutish and brutal “Revenue" on the other.” So who is more important? Sales surely because I have named this blog as " Salesgyaan". Well no friends, it is actually the reverse. Revenue is much much more important. Let me define what is revenue? Revenue is what the company earns from the customer against the supply of its services or products which has been done against the long and long purchase or work order (for capital equipment, purchase orders are usually long). You have the ROI (the Return of Investment)  ...You made a product for $60, suffered an expense on it of $10, paid another $10 to the government as tax and the balance $20 is the revenue or PAT (profit after tax). This is what  Revenue is. 

Now you are confused!! Wait a minute, you say. If this is revenue, then what is the sale? What is selling? If we had been talking about selling groceries or tools or F.M.C.G, then sales and revenue has only a small gap or none, say maximum 1 or 2 days. However, in capital equipment, the entire scenario changes. You are investing millions and you are getting back millions, so you just can't afford to be nonchalant and cavalier in your approach. Everything needs to be written down; the contract has to be signed, both parties agreeing to the points written. This paper or contract is your Sale. It is a contractual assurance that party X is going to buy ABCD from party Y for a value of $Q million dollars. And the process will be done in this way. A long list will then follow describing the breakup, which you had hammered out with your counterpart in the purchaser's company.

 Here, in the final stages you will see that people are going bang bang for 500$ when you are selling or buying million dollar products. Do not point these situations out as ridiculous  but accept them as compared to your sale value, its peanuts. That $500 can mar your case. You see everybody wishes to have played a role in decreasing expenses and what better role to play that to cut down the profits of the manufacturer who wants to make a buck doing fair business. Its a different matter that the Air Conditioners go on and on even in empty rooms, nobody switches off the fans before they quit..that's entirely different.(Never point out these things to the customer..i was only telling you as a fellow salesperson).

So, you have got your sales order or you have achieved your sale, can you now forget it? 

No you can't..May be your responsibility has decreased somewhat  but it is still there,.very much there..and it will be there till you get the revenue as per the steps outlined in the Purchase Order or Sales Contract.. We will tackle those steps in our next discussion. 

Before we finish, it seems that plenty of people are curious as to the word Gyaan and Salesgyaan. Well, Gyaan in Hindi means knowledge or wisdom. So-Salesgyaan means imparting knowledge of sales ( revenue too, hence) and 'the selling process' to those who want to avail of the facility, or wish to know of the same.

so  friends
auf Wiedersehen,
-------someone---------
from Bag's end

NB: Ever since the movie,my signing myself Bilbo has become too common. Though when i started, I had never even heard of the movie. Therefore, from now on., I'll sign 'someone from bag's end' till I can think of a more suitable name. (or maybe you can suggest one for me)

What is Relationship Selling?

           Today in the capital equipment and machinery market, business volume is growing and so are the targets. But, you know that plum order from the nice customer is all yours”.  Then one day you go to your customer one fine morning, after several weeks, and ask him about “my order” [ look at the arrogance] .And he says “Oh that order, it went to the competition Ltd”.. as you realize that the order is lost forever-the one high value order on which your target was built up on.

Later on, after you finish berating your juniors and your boss stops berating you; you realize that you never had a relationship with the customer at all. This is an example of what-not-to- do in relationship selling. Do not take anyone for granted! In our line (high value engg. equipment selling) it makes you redundant and in our race (homo-sapiens)it leads to your extinction


Say, you are looking over 20 accounts, do an accounts versus sales analysis. You will find that at the most 5 or 6 account for 70% to 75% of your sale. You try to find out how many visits you made this year in 7 months, and it so turns out that you made only 1 visit, because you thought that would buy only from you. In addition, you tried to sell to the 15 customers who give you maximum 25% of the sales. What foolishness

In relationship selling, you make a relation with the customer’s key man. He may not be the person who signs the order but it is his decision, all the way. Develop a professional relationship with him. Tell the truth to him and no bullshit please. Tell him that you want the order but you also want to have a seller-buyer relation with him, so that it’s not one way traffic.

You try to help him in whatever way possible. You offer suggestions, which can help the customer increase his productivity. At first, the customer may be suspicious but later he will realize that you are sincere and honest. He will trust you although he may not trust your product. If that happens, you have to hard sell him (or her) and you should be able to do what you promise. Visit him once a week-fortnight.  This gentleman or lady then will be your friend come hell or high water. It’s you he will trust and your word will be the last word on the subject.

Build up your relationships today, all in your major revenue-earning customers, and you will not regret it no matter which company you represent, in the future. If you have a good product, the customer will buy it just because you are selling it. Hard to believe, but this is true folks. I have done it myself. There are exceptions to every rule. If you are selling swords to Atilla-the –Hun, then maybe it will not be wise to have a close relationship.

With price becoming so competitive and quality being measured in microns, the day is not far away when your relation will count. Build win-win relationships with your customers, and not only will you get the business, but you will also gain a friend. This is the magic of relationship selling.

I know a gentleman (very senior) who is now in IOCL Gujarat Refinery. We still keep in touch. And I know that if I go to him with a proposal, he will consider it, because he will be sure that what I propose is a win-win thing.

Stage II : The Most Important Stage

Hello Friends,

We now come to the middle 

portion, and the events that take 

place here, are going to make or 

break, all the hard work done. 

Here the main job is to

“Follow –Up”. Yes –I know that

follow ups can be a bit of a bore

sometimes.

But dude, there is just no help for it. You want to sell, you have to develop enthusiasm for follow-up

"Follow up has to be done if you want to sell."

There was once this Sales Guru called Pup

Whose favorite dish was fish-heads in Ketchup’

“The three basic rules" he'd say

“in the science of sales any day"

“Is follow-up, follow-up and FOLLOW-UP”

In Public Sector Tendering, what happens now is that Materials Dept. sends your file back to person who indented for it. This means the department and the officer who required it in the first place. I am assuming that you have built a relationship with the him/her by now. After that post in relationship selling, I am assuming that you-my readers-are using it to the extent possible.A few things have to be kept in mind when you are participating in Public Sector selling through Tenders, of capital equipment.

1.The "Indenter" is interested to know whether the equipment that you are trying to sell will give him the service he requires or not. Even if there is a single iota of doubt, he won’t proceed ahead on your proposal. Therefore, what you need to have in dollops is confidence. Because trust me, very few people can let their inner confusion not show outside. (The indenter will be an experienced person and he will barely need to ask two or three questions to know that you have no idea of what you are speaking about.). So try to get rid of all your confusion if you have any.

2.If you are representing a foreign OEM, then your product may have done fabulous work in Brazil and Peru. Do not make the mistake of glorifying these achievements. Their presence on your experience list is enough. Maybe you are new in India and have sold only one or two units so far. Glorify that achievement. That will serve you in better steed then the South American glorious stories.

Now, what about service? Do you have service people in your company who are competent as well as presentable? Or,  is your management only thinking about recruiting people? Or, maybe you have already hired experienced engineers and you've sent them overseas for training? Please note that you should not tell lies and untruths. If your product is slightly technically inferior, tell the truth. Even a person who is not the champion intellect is more likely to buy a slightly technically inferior product but with good service rather then a sophisticated gizmo which requires four(4) days for someone to come over from Koln.

Always remember that “ what the customer is interested in knowing: is how your product can help his organization in the subject application. He is definitely not interested in knowing about anything else before that..not the strict QA policy you have..not the prize for CRM your Paris Office won..no, nor even your recent order from Mars. This may appear to be obvious but we sometimes fall victim to our ego's. Talk to the point.

 It maybe so that your competitor's equipment had failed somewhere. Maybe your accessory life is higher. Do not criticize your competitor. Do not bring these up. Sometimes you have to be a little unethical!. But  do keep a professional looking paper which lists everything...on a plain white paper with you where your competitor's evil record is exposed and your advantages are monetized to the extent possible. Use it discreetly only when required. (say customer says”I heard that your equipment caused problems in… from… You can then say its funny, look at this..maybe I’ve got something here..Aaah here it is..I’ve never told you anything because I don’t believe in negative marketing)

That's the end of Part II and the file goes back to the Materials department.

Looking forward to the next time,we sign off now

Your friendly blogger

Bilbo

Selling to the Public Sector: LIMITED AND OPEN TENDERS

Before I proceed, I want to say that I do not advocate winning tenders by paying bribes. In in my career, I have indeed gifted bottles of scotch and a book on one occasion (a copy of Pirsig's “Zen and …. Maintenance”), but not as a bribe. Any person can win an order by paying a bribe. The challenge lies in getting the order and keeping the process within ethical boundaries. This blog does not condone or advocate bribery or canvassing in any form.With that out of the way, let us now come back to our subject. If you want to do business with the Public Sector, the  first thing you should know that is the chain from the requirement identification stage to the tender stage and then the Purchase Order stage.

P

ublic Sector Tenders are of two types-Open or Limited. What are these? Open is the tender as we know it. Limited tenders are actually quotation requests. They are  sent to specific OEM’s/Traders who are registered with the Materials Department and are asked to quote for items within a particular date. There is no earnest money involved, as the Materials Department knows you are in earnest. A limited tender may be sent to your competitor and not to you.   There are two main differences between Limited and Open Tenders.

1.   1.      You are not allowed to be present when the offers are opened, and ...

2.  The tenders may not be opened at a particular date specified, but postponed by a day, 2-3 days even a week (depending upon the convenience of the officers who are required to be present).

 Once everything is alright, the offers are opened and the prices, commercial terms are listed, and the file is sent to the indentor. The indentor goes through the offers, rejects offers which he does not have technical confidence in and returns it back to Materials, who then sends it to Finance for clearance. Finance checks out the proposal and vetts it and sends it back to Materials. The Materials head then signs the file and deputes his assistant to release the PO, who gets it made, checks and signs it, gets it countersigned and releases the PO.

Why are some tenders limited and some public? It depends on the value (landed) of the offer.  Limited tenders can be floated only when the total cost estimate does not exceed a fixed sum which may differ from organization to organization.



Although the process looks complex, it is actually simple. Read it again and you will get the drift of sense coming out of that allegedly complex mumbo-jumbo.

Till next time then? 

Ja?

Auf Widersehen

Bilbo