Sales & Marketing------Strategies( THE COLA WAR)

Dear Friends,

 I guess we discussed enough about Sales and Marketing last time. You should be able to say by now that the photo opposite is wrong, if the intention behind posting it was only for Sales &Marketing! Nah, I just got carried over as these guys really look cute in those superhero costumes.

The Error in the Picture
              The thing that is wrong with the photograph is that a couple of more of Marketing's sub-ordinates are not here. And one among them whom you just can't ignore, leaving sales aside,as he is really really indispensable. Monsieur "Strategy" is the one I refer to. 
In our profession,ladies and gentleman, costing is okay but she is no ogre. What is important is how and with what strategy, the approach is made. This is much more important  than the price in Selling of High-Value Equipment.

     In certain  Sales blogs,you often come across Lao's "The Art of War"but as I have said before, I prefer to read Clausewitz's book "On War"which reflects on history's famous wars to underscore the points in his book. Great rivalries today see the market leader take themselves up as the competition. The best defense is not to lack the courage to attack yourself says Clausewitz. If Coke had launched an own variant with a 'youth' target, Pepsi would have had no niche to operate.

[Karl Von Clausewitz was a 
General in the Prussian Army who wrote the  book in 1852 after retirement].

Clausewitz tells us at length about how the strengths of the enemy can often be converted to weaknesses.One of the best examples of this (says Ries and Trout)is how Pepsi Cola of New York socked one to Atlanta's Coca-Cola. In 1915,Coke was sold at a price of 10c for an unique capacity of its bottle which was 6 1/2 oz. Coke had no real competitors, which led to complacence.

COMMERCIAL TERMS & CONDITIONS

I have seen plenty of sales engineers who think their job is only technical. Is that really so? Definitely not. Say you are reading a detailed Notice Inviting Tender and you mark all clauses containing the words ‘debit’ or ‘credit’ with the remark ‘Accounts’, than you really are living in a fool’s paradise. Commercial terms are an indispensable part of any engineering parcel of any salesperson selling engineering equipment.

CAREFUL STUDY OF TERMS & CONDITIONS

If you ever want to rise up the ladder by your hard work alone and one day manage a team of juniors, you need to be familiar with Managerial Accounts,which is a different subject from financial accounts.

Managerial accounts are those figures and ratios, which your management will study. These are the figures by which the-powers-that-matter, if you head a regional office-the management and if you are the CEO-the stockholder's interests. These are the people you are ultimately responsible to, so ignore them at your own peril.

      What are these commercial terms and what happens if we do not know them..? If I do not know my commercial terms, then I have no business in meeting customers. Not convinced? OK, let us say you are in a electronic appliances store, and you want to buy a laptop,  having already decided the model. As you are satisfied technically, you figure  that you need to know the price. And then you see the price say 280$. You think its a little expensive but never mind, you like it. Then as you open your wallet and start to take out the plastic money, it strikes you that you have no information at all and unless you have some more information, you CAN'T buy it, meaning there's no SALE. Being more precise
"There is no SALE because of the lack of the basic commercial terms"

            But what information that I do not have? What are all these things which I do not know? I have no idea whether the prices are inclusive of taxes and duties. I don't know what other charges are applicable e.g. Packing & Forwarding, Excise Duty, State sale tax, any discounts applicable? I even don't know whether they will accept a cheque or a credit card, etc.( But surely, I can get to know all this information by just asking the staff. Yes, I can do that but selling the laptop is not the issue here. Say, you are at a remote site and you want to place an order fast for some equipment. You have got two quotes, but one has no mention of basic commercial terms.)
        This is the kind of trouble you land your customer in if you omit the commercial terms. Please note that in business lingo, the words’intentional’ and ‘nonintentional’ mean the same. Your forgetting may be a human error but if the  customer suffers a loss because of your messed up quotation, that will not help his career too

The basic Commercial Points that requires a mention are

      (A) Price basis which tells the customer that your prices are quoted ex factory or FOR(this    means Free on Road-it tells the customer that you will bear the transportation expenses) or whatever.

  B) Taxes & Duties: If these are included in the quoted price; what are the rates ; what taxes are being charged etc.

  C) Delivery: How much time will the delivery take. In the laptop case, it will be immediate off  shelf but for customized items, deliveries differ.

      

      D) Payment Terms : 100% against material or through bank or through LC (letter of Credit) or maybe you want a 30% advance payment along with the PO and balance against delivery. We will discuss about this later for delivery and payment are very crucial factors for selling capital equipment.

      E)  Transportation and Transit Insurance : 

      

      F) Validity: Your price is valid till when. Say the customer comes after 6 months, will your price remain the same. Therefore you mention a period 4 weeks, 12 weeks whatever period your prices will be the same and after that subject to renewal.

      These are the main commercial terms. A lot of others are there like P&F costs, warranty, service support, accessories etc. but these are the main. Without one of them your proposal will remain incomplete.

For International trading /selling , we have a set of commercial terms uniform all throughout the world and  which is acceptable and applicable to all nations. These are called INCOTERMS. Every year they are reviewed and revised, if necessary. The picture below will tell you about INCOTERMS .You do not have to be scared of INCOTERMS. They are certainly not rocket science.

That was quite a post.

This point was important however. Anyway, whatever-hope you like it.

Love and best wishes from

    ------------------------

(Someone from Bags-End)

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)

MIS And Feedback

....
Ha-ha. Does the pic seems funny to you?  It does to me. Now, if you are  thinking that ' the bastard is about to go in a long, sanctimonious lecture, again..Help :-) Lol!
 You need not be scared. I just want to tell you or "share with you" something about "Management Information Systems" and their role in Indian Companies.

Let us analyze what Mr. Boss is doing on top of the arrow. The conversation may be something like this.
Boss: Nope! I don't like it.Somehow alters the view ; aesthetic point of view. Not that I expect you bummers even to know what "Aesthetic" means.You people do not know what a good sales view is. Put me the...ere, instead.
Engineer #8: ( sotto voice) Does he mean that his bum is aesthetic, considering that's what we see almost all the time?
Engineer #7: ( sotto voice) Ha-ha; good one dude but keep your voice low

         A very important system in an organization which can result in an organization being buried  and failing woefully or rising up from the ashes, sphinx like, is MIS. What is MIS? MIS or management information system is the system available in your organization through which information flows, not gossip, not political diatribe but positive information. Business Information which does good for your company.

When the MNC's first arrived in India, we were optimistic that we were going to see some good management practices, after all. But nothing happened like that. The amalgamation of Indo-European Management thinking, literally made sales people account for every minute of your time. There is a particular MNC in Noida, where even branch managers have to fill out timing..Now, I believe that filling up a form where you are required to mention the waiting time too is absurd.( There is a journey time, a waiting time, a meeting time and a miscellaneous time)
There are plenty of reasons why this is absurd but my main bone of contention is that the minute someone is asked to do that, he or she ceases to be loyal soldiers of the commander-in-chief, if they comply.They instead become hear and doers, they become "yesman"-that creative spark inside them fizzles out and the challenge of capital equipment selling becomes a dodo.

        Well, a kangaroo lady I know and plenty of other departmental heads will not understand that. They'll say "  we are paying you big bucks man, this is the least you can do for us. They then proceed to tell you what to do and at the end of the year they ask what happened to you. Hey lady..back off. You want to place responsibility on me with you taking all the decisions? This is not acceptable at all. These lapses all the more important in capital equipment selling where there are few orders and less players. You gotta speak up for your rights.

         This is a tragedy. Today we have one of the best inventories for minds if not the best and look where we are going, in comparison to the Chinese-next door. Say you are Fernando Torres and the coach tells you that he must score a hat trick. A hat-trick has to be made irrespective of the side of the field where the goals are to be scored. So, Torres finds the going tough and ultimately score his hat-trick against his own team. 

Torres scoring for Chelsea against Sunderland while Juan Mata looks on.








     You must be in splits by now now...but these things do happen. Look around in your office, and you'll find the same happening day-in and day-out. Therefore, in selling capital equipment, let your team the freedom to think for themselves as per their capabilities. Take stock in weekly sales meetings. Gather all information and link it together to get information about new projects. Tell them what to do and why they should do it.

Do not tell them to do something without any explanations. For this indirectly tells him that you don't trust him. And lack of trust is one of the greatest demotivators -in the field of B2B direct selling of high value capital equipment. 
with love
friends
Bilbo.

See this : Arnie as Darth Vader

Hi Friends,

I just want to post this now. Recd it about 5 minutes back from Arnie

@ Scharwzeneggar..I can't believe this pal. Thanks ad infinitum

On Persuasion and "Win-Win" Arrangements

< meta name= 'keywords" content = capital equipment, sales, selling, persuation, persuasive selling, capital equipment selling>

When I started off in sales after spending about three years at site, the one advice people would give me was “ you have to be persuasive”..with the wisdom of a Zen-master .Accordingly, I thought to myself 'gotta be persuasive dude' and "Aal-eez-Well", but there was a spanner in the works,as usual. 

"What’s 'being persuasive'? How do you be persuasive?" were some questions which baffled dumb 'ol me.When I asked, the Zen-masters just smiled a-sort-of-Zen-master smile and uterred wisdom like “ find it out for yourself” or similar words to that effect. The advice-givers are never generous with definitions, as you may be aware. 

However, then I found out when once a person has made up his mind, it is difficult to get him to change his mind. I  was mainly getting my results with my personality, my ability to make friends, my lack of ego at my job hours ( but man I had an ego a mile long after office -I had to do a lot of struggling to realize ..or correction make my CPU realize that the world does not revolve around me-but that's another story).Finally, I decided that persuasion is what precedes aggresion, but I was not happy.

By then there were young people under me and I told them the same thing, crossing one more generation, without any definitions-of course. I had made up my mind by then that persuading is gentle aggression. I was not completely sure but then, no other definitions came to mind. About 10 days back, I came upon this definition in a book in the British Library here, which in my opinion, is superb and exactly conveys what ‘being persuasive’ can mean in sales. I thought therefore I‘d share it, for a change, being in a good mood.

This definition  gives you four approaches all based on the ‘win-lose’ sales concept of situations, which are as under

     1.Unimpressive approach: lose-lose

    2.  Timid approach: You win-I lose.

     3 .     Aggressive approach: You lose –I win

     4.   Persuasive approach: You win-I win

 This impressed the hell out of me, cos it makes perfect sense.Hope you think it is helpful.

 Now, I thought like crazy but could not recall the author. So, if he or she is reading this, thank you for a concept so brilliantly explained.Superb clarity of words and thought. Now I know what to tell my subordinates next time anyone asks me how to be  persuasive.!!

Wishing you lots of profitable selling

Best Regards from

Bilbo.

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