Analysts - they input to the buying process and your selection

People ask us from time to time about the role analysts like Gartner, Tower, Celent and others play in the buying process. Based on a project we are working on right now they have a huge impact. On this particular project a leading analyst house has provided suggested selection criteria and weightings. The criteria includes

• Vision
• Vendor viability
• Services
• Functionliity
• Architecture
• Price/cost

Worth noting the analyst house in question will also influence the final neogtiation.

Food for thought.

Read this article for tips on working with analysts. 

Is this the Golden Age of Buying? - Implications for sales professionals

Professional buying has come of age, reaching new heights in terms of importance and sophistication. But what are the implications for sales people?

In this article we turn to the UK Chartered Institute of Purchasing and Supply and the US Institute of Supply Management to provide a new insight to the changing roles and perspectives of those on the other side of table.

The Key Trends in Purchasing.

Purchasing has traditionally been regarded as a bureaucratic function at the organisation’s edge responsible for ordering and replenishing supplies. It was concerned with paper pushing and form filling, in respect of transactions and supplies. However, the old clerically reactive style of purchasing has given way to a more strategic approach.

	Traditional Purchasing	New Age Purchasing
Function	Administrative	Strategic
Objective	Cutting costs	Boosting corporate success
Focus	Lowest price	Value, flexibility & innovation
Supplier Relationships	Adversarial	Collaborative
Organisation	Stand alone	Integrated

Implications for the vendor: How can you support the purchasing department in the fulfillment of its role?

How Purchasing Contributes to Organizational Success.

With purchases in many organizations accounting for anywhere between 20% and 50% of revenues the purchasing function has an important role to play in organizational success. That is because even a small percentage improvement in the value and performance of suppliers can have a significant impact on the bottom line.

The success of an organization is dictated by the performance, flexibility and innovation of all those members of its supply chain. Maximizing this performance is the principal motivation for a more structured approach to organizational buying.

Another motivating factor for greater sophistication of the buying function is to protect the customer from opportunistic vendors and bad deals. In short, building buying confidence and skill enables buyers to defend against the ploys and tactics of the sales person, while at the same time negotiating better deals and developing more successful vendor relationships.

Implications for the vendor: Does the professional buyer feel the need to limit your access to the customer, or business managers involved?

Finally, there is also the motivation to increase the efficiency of purchasing in response to technological advances; globalization and changes in the nature of business (e.g. supply chain management, world class manufacturing, etc.). This is manifest in the implementation of EDI, ERP, materials management, supplier management systems and so on. With this in mind, however, the appropriate purchasing principles and practices differ depending on the goals and the market conditions of the buying organization, as well as on the nature of the purchase decision (from consumables, to capital goods).

Purchasing as an Integrated Function.

Previously purchasing was a department that completed transactions and managed the associated paperwork. Now it is considered to be an integrated function, which aims to ensure professional buying skills and practices are applied to all corporate buying decisions organization-wide.

The objective is to develop purchasing skills and techniques throughout the organization, putting them in the hands of business managers and their departments. So, rather than a centralized department responsible for all requisitions and supplier relationships, purchasing authority is devolved closer to the point of use. It also involves input to purchasing decisions from a cross section of functional departments.

Implications for the vendor & sales team: What is the imprint of the purchasing department on your prospect’s buying decisions? How many people are likely to be involved in, or shape the decision?

Modern Buying is Planned & Proactive.

Professional buying aims to be:
· More accurate as regards requirements
· More competitive in respect of vendor bidding
· More careful in selection and
· More proactive in developing and exploiting the value of the vendor relationship.

It sounds obvious, but professional buyers point out that ‘a well-developed and well-stated requirement is the key to successful procurement’. That requires a more; collaborative, structured and systematic approach to gathering requirements and setting specifications.

Modern Purchasing also aims to be proactive, for example focusing on quality assurance rather than just quality control.

The Focus on Long Term Supplier Relationships.

The professional buyer recognizes that good supplier relationships are essential to ensuring supplier commitment and performance. That means ensuring fair and consistent treatment of suppliers, meeting with them regularly, improving communication and otherwise working collaboratively.

Traditionally the focus was on selecting suppliers, evaluating their performance and dealing with supplier related deviations and disputes. However, a more forward looking and collaborative approach involves vendor development, as well as vendor management. This is key to delivering greater flexibility, as well as continuous innovation and improvement.

The trend is towards the development of relationships that are strategically important and involve a mutual commitment to long term success. This often entails fewer but stronger relationships, that is a concentration of supply in the hands of a selection of carefully chosen strategic supply partners.

Implications for the vendor: Are you considered a strategic supply partner by your key customers, or one of a larger number of vendors that will face consolidation?

More Systematic Vendor Assessment.

The purchasing team’s job is to ensure that all departments and managers evaluate their vendors, using a standard format, or template, and that all this information is analyzed and acted upon. Incidentally, neither publication suggests vendor assessments should be 360 degree, that is with vendors providing feedback on what it is like to deal with the customer.

Quarterly Vendor Evaluation Form

Criterion	Weight	Rating	Total
On Time Delivery
Quality Levels
Support Levels
Responsiveness & Flexibility
Communication
Value for Money
Commitment Shown
Level of Innovation
Level of Expertise
Etc.
Total Score

Implications for the vendor: How are you being evaluated by your customers? What areas are you scoring well on? Are there areas where your score is weak?

The Science of Supplier Selection.

Purchasing is the science of supplier selection. Selecting the best supplier in the most competitive manner being the prime focus for the modern buyer. That means:
· Carefully short listing of suppliers, based on past experience and the many market information
· Understanding more about the supplier marketplace, including trends and drivers
· More clearly defined and accurate requirements, or specifications
· More effective RFx (RFI, RFP, etc.) documentation and processes
· Vendor assessments that are more systematic, structured and team based
· More carefully managed negotiation

One of the key tools in this process looks something like the following – a vendor assessment sheet with set criteria and weightings that is completed by the various members of the team.

Vendor Assessment Form

Criterion	Weight	Rating	Total
Price
Terms
Commitment
Financial Strength
Relevant Experience
Track Record
Quality of People
Technical Performance
Level of Expertise
Etc.

Implications for the vendor: Do you know the criteria and associated weightings against which your business will be evaluated?

The implications noted above are areas we should all consider. We hope they are useful.

Buying is undoubtedly as complex as selling; we need to put ourselves in the buyers shoes if we are going to help them to buy. Food for thought.

'Buyers Are Doing it For Themselves' - The Increasing Independence and Sophistication of Buyers

To borrow from the lyrics of the popular song 'buyers are doing it for themselves.' They are ''standing on their own two feet and...' identifying their requirements, defining the solution, writing the specification and building the business case. All this often takes place before they ever meet a vendor! This reality leave the salesperson looking for a new role in terms of shaping the buying decision.

Buying Has Changed.

For a long time we have noticed a trend with respect to how buying decisions are being made and the implications for the role of the salesperson.

In short, today's major buying decisions are more structured and sophisticated, so too are the business strategies that underpin them.

The present market conditions have intensified this trend, with purchase decisions, involving as little as 20,000 or 30,000 euro, requiring the presentation of a business case that demonstrates not just payback, but also strategic alignment.

The New Complexities of Buying

The public sector is often criticized for wasteful spending and bad buying.

However, tabloid news stories aside, the public sector in the United Kingdom, as well as in other countries, is increasingly applying the best of private sector rigor and sophistication in terms of buying.

No more clearly can this been seen than from the 15 step process laid down for major transportation projects in the UK, as described in the diagram below:

The above process of how the UK allocates money to transport projects offers many lessons for salespeople. So, let us look at it in more detail.

The business case involved in these major schemes - that is projects involving a spend of 20 million plus, must address 5 key areas as follows:

Strategic - how the scheme fits with the regional strategies and priorities, and wider objectives	Financial - Funding sources, financial risk and financial sustainability	Commercial - the strategy for procurement and management of commercial risks
Delivery - how the scheme will be delivered to time and budget, and how successful implementation will be ensured	Appraisal and value for money - the scheme's benefits, including non-monetised benefits, and costs

For each of these areas, specific criteria are laid out, with the following terms being prominent in terms of the guidelines.

Current situation	Future situation	Scope
Problems	Objectives	Targets
Exclusions	Risks	Tolerances
Assumptions	Actors / stakeholders	Assessment of alternatives
Sensitivity analyses	Consultation & participation	Option Testing
Benefit Cost Ratio (BCR)	Non-monetised impacts	Cost estimate robustness
Project Plan	Constraints	Deliverables

This is an interesting list of terms which a vendor should cross check against its traditional proposal content.

Buying Is Becoming More Sophisticated.

Every day we see signs of an increasingly sophisticated approach being adopted by buyers. Thankfully a growing number of salespeople are responding to this trend with a correspondingly more sophisticated approach to selling.

However, as salespeople we can often underestimate just how complex our prospect’s buying decision actually is. More fundamentally, we often only see it as a buying decision, rather than a strategic business decision.

The Buying Decision Has Become More Complex.

Taking the first point first, as sales people we often view the buying decision as being focused narrowly on our own solution. That means for example, we do not take account of factors such as:

- The totality of choices available to the prospect organization, including do it in-house, or do nothing.

- The Tradeoffs, priorities, constraints, as well as well as the politics and risk associated with various purchase alternatives.

- The fact that our solution often accounts for only a small element of the total budget, or the total solution, including the fact that the purchase price of our solution often represents only a proportion of the total cost of ownership.

- We often see our solution in isolation of the processes and the people dimensions to their adoption. The degree of change required for success in the prospect’s organization is sometimes forgotten.

The Role of the Sales Person Has Changed.

The salesperson’s traditional role as the conduit of product information has by in large being made redundant.

Why? Because buyers can get volumes of screening type information from a range of other sources that are more objective and less demanding.

As a consequence the sales person has to add value elsewhere. He or she has to aid the buyer in making choices and tradeoffs, in reducing risk and in building confidence regarding the business strategy and its success. That leads us on to the second issue - the business decision.

It is a Business Decision First and a Purchasing Decision Second.

Major purchases are at there core the result of an important strategic business decision. In that way it is the strategy and its associated business objectives that are important, not the purchase per say.

With this in mind, the job of the salesperson is no longer simply to convince the buyer that his or her solution is the best. It is not enough to rattle off unique selling points and competitive advantages over other suppliers. Rather the salesperson’s job is to build the prospect’s confidence that his, or her strategy will be a success and that the seller’s solution is integral to it.

That means writing a proposal, is less important than inputting to the buyer’s business case. Similarly, it means that a trusted advisor is more important than a salesperson.

In Conclusion:

As salespeople let us focus on how our customers and prospects are buying, adapting our approach to reflect the increasing sophisticated nature of their strategy led buying decisions.

Managing Sales Cycles: The New Agenda

What are the top priorities with respect to key account selling? In the context of the market slowdown where are salespeople focusing in order to nudge their key prospects across the line? Well, we did some looking around to find out and pulled this short list together as a guide:

1. Sell higher - selling to higher level management in target accounts, particularly at C level (i.e. CTO, COO, etc.). Unless they are actively involved in the buying decision it won’t happen. That requires a new attitude, approach and confidence on the part of the salesperson. He, or she has to become somebody that the C level executive values enough to want to spend some of his / precious time talking with.

2. Sell to satisfied – it is not enough to limit your sales activity to those companies that have an express need and an allocated budget for your solution. You have to work on selling to those accounts who need your solution, but don’t realize it yet.

3. More planned, structured / systematic approach – applying key account management principles to those prospects that you want to become next quarter, or next year’s accounts is key. That includes more communication, more information, more meetings, more contacts and so on.

4. Dialogue not sales pitch – it is not about selling and it is not about your product, or service. It is about finding out what the prospect wants to achieve in his/her business, the problems and challenges being faced and exploring how and if your solution can address these.

5. Joint process of engagement– It is not about the salesperson doing all the running. The buyer has to see a pay off from talking with the salesperson in the first instance and thereafter from engaging with the salesperson in the exploration of needs and solutions. When the solution is agreed, the buyer had to see it as his, or hers, not just yours.

6. Marketing and sales go hand in hand. One to one relationship building is backed up by a supporting programme of marketing, that may include direct mail, white papers, email newsletters, etc. That ensures multiple touches over time across the buying group and ensures the sales persons has new messages, insights and conversation points to share with the customer. All this communication is centrally coordinated by means of a sales database, or CRM system.

7. Expert not salesperson. Buyers are increasingly averse to the traditional salesperson. They want to talk to experts, not sellers. The ultimate achievement for the salesperson is to be considered a trusted advisor, or a peer.

8. Selling is a team sport, just as is buying. The seller is in contact with twice, or three times as many influences in target accounts as was traditionally the case in the past. That involves a team on the sales side, which with match executives in the buying organization with executives in the sales organization. The personal and business motives of all the buying group are carefully and systematically addressed.

9. Sell to strategy – Any major purchase is first and foremost a business decision and if the salesperson is involved in at the strategy stage his, or her chances of success are greatly increased. That means the conversation must focus not on your product or solution but how it will help the buyer and his/her company achieve its goals.

10. Understanding the buying process – it sounds obvious but the salesperson has to focus not on selling, but rather on helping the buyer to buy. That means he, or she needs to fully understand how the decision will be made, including; who will be involved, the decision making criteria, the budget range, etc. Rather than trying to shoe horn the buyer into the salesperson's sales process, the buyer must feel that he, or she is in control at all times.

11. Ongoing review of process / position – any key account or prospect strategy is only as good as its last review. Pipeline reviews have to be more regular and have to be seen not as a critique of the salesperson, but a vital means of ensuring his, or her success. The salesperson is in tune with his, or her gut instinct with to the account and constantly looking out for red, or yellow lights which can point to where more effort is required.

12. Be prepared to walk away. Don’t start off by assuming the customer needs your solution, find a reason to start a discussion about the customer’s needs and priorities and if it makes sense take it from there. But remember you cannot win ‘em all and that means you must be brave enough to walk away if a genuine win-win cannot be achieved with the prospect.

13. Business decision trumps buying decision. Behind every major purchase decision is a important business decision. The salesperson has to be concerned with the business case, more than the sales proposal. He, or she has to understand the costs, benefits and risks associated with the buyer's decision.

14. Buyer risk is paramount. Buyer adversity to risk has increased in the present turbulent environment. That is not just the business risk associated with the project, but the risk associated with selecting a particular vendor. The seller's task is to minimise and manage this risk. The salesperson’s full tact and skill is employed to ensure that all unspoken issues are addressed.

15. What do you want to do next? A new approach to prequalification is required, one that engages with the buyer. That means understanding if there is a budget available, what the timeline is and so on. The salesperson tests these variables, for example asking quesions such as 'is there any reason why this issues has not been address prior to this?', 'is the budget contingent on a success business case being demonstrated?', or 'are there other projects competiting with this one for budget?'

How Misreading the Buying Decision Could Cost You the Sale

Key lessons from Neil Rackham’s ‘Major Account Sales Strategy’

‘Major Account Sales Strategy’ by Neil Rackham’s is a bible for the savvy sales professional. It is as relevant today as when it was first published in 1989. So, we dusted it off and pulled out its key points.

The key message of this ground-breaking book is that many sales are lost because salespeople misread the stage of the buying decision. For example, they try to sell a solution before the buyer’s needs have been recognized, or dig around to identify needs when they should be addressing the specific supplier selection criteria set by the buyer. Perhaps most serious of all they fail to unearth buyer concerns that could stall the sale.

Now, like me you know that no two buying decisions are the

same and that buying models can be an over-simplistic

representation of reality of how complex business decisions are made. However, Rackham's provides food for though in terms of how the key success factors for the salesperson varies depending on the stage of the buying decision. So, let us look at the 5 key stages:

Buying Phase 1: RECOGNITION OF NEEDS:

If there is no need there is no sale, that is obvious. So, the first stage in the buying process is the recognition of needs. That is also the starting point for most sales meetings, or at least it should be.

In the recognition of needs phase the ideal strategy for the salesperson is to uncover dissatisfaction and develop it until it reaches a critical mass. That means the salesperson should hold back on product discussions and presentations, focusing instead on identifying needs, probing dissatisfaction and creating tension for change.

Successful salespeople ask a lot more and better questions during sales calls than their less successful colleagues. The latter tend to do most of the talking and become involved in product discussions very early in the sale and give presentations as a means of generating customer interest.

Buying Phase 2: EVALUATION OF OPTIONS:

Once the buyer has recognized the need the next step is to evaluate options, that is solutions and suppliers. At this stage the sales person must ascertain if the decision making criteria have been defined and indeed are correct.

The salesperson’s objective for this phase of the buying process is to identify, address and shape the criteria that will be employed in selecting a supplier. It is also important to identify alternatives solutions to the buyer’s problem, or alternative uses for the same budget - these can be as important as any competiting vendor.

Rackham points out that most salespeople do not ask customers about their specific decision making criteria. Without this information they are shooting in the dark. After all there is no point emphasizing criteria that are not important to the buyer.

The salesperson may attempt to redefine, or diminish the importance of buying criteria that do not favour his/her company. Although these criteria will be both hard and soft, the savvy salesperson will attempt to quantify and ‘objectify’ both.

Of course, the line between evaluating options and recognizing needs can be a fine one, with the salesperson often attempting to influence the buying criteria by revisiting needs. For example, the customer says ‘we want a training programme’. But the salesperson in an attempt to prove his/her value may ask 'What is the problem that the company is trying to solve?'' 'What are the issues that give rise to the need for training?' and so on.

However, if a buyer may wans training and that is that. It is a transaction and there is little room for consultation and little buyer patience for recognition of needs questions on the part of the salesperson. In that situation the salesperson may be best served to focus attention on the buyer’s criteria for selecting a training provider.

Buying Phase 3: THE RESOLUTION OF CONCERNS:

While the salesperson may feel that he, or she is in pole position, getting the buyer across the line can often prove troublesome. Beneath the surface the buyer may be wrestling with fundamental, yet often hidden, concerns, sensitivities or risks that have the potential to scupper the sale. This crucial phase of the buying process is what Rachman calls 'the resolution of concerns'.

Let us take an example: the salesperson’s proposal, presentation and price beats the competition, but somebody on the buying group raises a concern about the company’s track record and credibility - afterall the company is relatively new. The question is asked ‘why don’t we just stick with the supplier we know?’ Nothing is said to the sales person and the safe route is taken by the buying group.

Perhaps the salesperson had been sensitive to the issue during the sales process, but side steped it in the hope that it would go away. After all, bringing it up in the discussion might only give it credence. This can be a fatal flaw however as sensitivity to risk is likely to increase, rather than diminish as the buying decision approaches. Ferriting out any lingering concerns on the part of the buyer is essential and can require almost a sixth sence on the part of the sales person.

Buying Phase 4: DECISION

The buyer’s needs are clear, the options have been explored and any niggling concerns addressed. So, logically the buying decision follows. Just as a good house sits on a strong foundation, the success of the saleperson depends on how well the recognition of needs, evaluation of options and resolution of concerns stages has been managed.

Like me Rackham does not believe in the 'slam dunk' sales close, pointing out that applying pressure to close before any unresolved issues have been addressed is generally a disaster. So too with negotiating too early. Until the buyer has moved from identification of needs to the evaluation of options and then resolved of concerns the salesperson's job is not complete.

Buying Phase 5: IMPLEMENTATION

A continuous theme of Rackham’s book is that just as the salesperson things his/her job is done, another vital phase of the sales process is just about to begin and that includes implementation.

In particular the area of implementation is often overlooked, as the salesperson moves on to close the next deal. This is in spite of the importance of giving the customer extra attention during the early stages of implementation and the requirement to continually build the relationship and prove the value.

The mindset required is Rackham suggests that of account development, as opposed to account maintenance. What counts with most customers is what are you done for them today and what can you do for them tomorrow. In this respect it is also important to document the good news ensuring that the customer has an accurate measure of what has been achieved.

Buyers: Treat salespeople As you would expect to be treated

Applying the Golden Rule to Sales

What goes around goes around.  So treat salespeople as you expect to be treated.  Call it good karma, good manners or simply the golden rule (a la the Bible, etc.).

Almost everybody in business will have to make a sales call at some time, or other.  When they do they hope to be treated with professionalism, courtesy and respect.  But is that how they treat the salespeople that call on them?

Treat salespeople as you would like to be treated

Many managers don’t treat the sales people calling on them very well.  In the mist of a busy workday the sales person who calls, or visits, often gets short shrift.  After all, time is scarce and we cannot just entertain every salesperson who either rings up, or drops by. 

However, if managers don’t treat salespeople with respect, how do they expect to be treated with respect by their customers and prospects?

When the shoe is on the other foot

How you treat other salespeople is ultimately how customers and potential customers will treat you.  In a karmic way if you are rude and impatient with a sales person when he/she calls, then you have no right but to expect anything different when ‘the shoe is on the other foot’.

Yes, cold calling sales people are the lepers of the modern age and those who apply pushy and intrusive selling techniques may deserve to be shunned.  However, it is important to treat salespeople in the same way as you yourself, or your salespeople would expect to be treated.  So here are some guidelines.

When a salesperson calls you on the phone:

• Put yourself in the salesperson’s shoes
  
• Be nice, if you cannot speak then ask the person to call back again
  
• Assume that the sales person is a professional , unless proven otherwise
  
• Give a minute to listen, maybe it could be of interest
  
• If you are not interested say so, don’t for example fob the person off by requesting a brochure if you are not really interested
  

When you are in a sales meeting:

• Be clear on the purpose of the meeting and agree in advance what time you can give to the salesperson, after all  you have invited him/her to travel to see you
  
• Interact and show some interest – we all know how off putting it can be when a customer, or potential customer sits there and says nothing, or when the conversation is all one way
  
• Don’t just ask for a proposal without being prepared to give the customer the time to explain your needs
  
• Don’t ask the customer to do a presentation unless you are prepared to give him/her some background on your company, what you would like to cover, etc.
  
• Don’t ask for a proposal unless you really will consider it – we all know how much time it takes to prepare a proposal and how frustrating it can be to discover it was a waste of time

References:
- None of you has faith until he wishes for his brother (salesperson, or not), what he wishes for himself (Islamic Hadith).
- Do onto other (salespeople) as you would have them do unto you (The Bible).