CJNg _ 2.jpgHi!


    My name is c.j., your trusted Sales Advisor, and here's the April 2009 issue of Psyche-Selling TM eNewsletter. 


    If war is an analogy for business, then perhaps sales people will be the equivalent of frontline soldiers.  And perhaps the worst nightmare for front-line soldiers will be the ammunition won't fire-off, and combat rations are past their expiry dates.  


    Hence, when sales people are at the "front-lines" making sales, the worst that can happen is the procurement for materials and products is actually lagging in quality.


         Hence, this month's topics:

  1. How Your Procurement Practice will Impact Your Sales Performance; and

  2. How to Conduct Job Interviews with Sales People

    This issue's main article is on  "How Your Procurement Practice will Impact Your Sales Performance", and it gives sales managers and sales people some ideas how you can work with your procurement colleagues, to deliver better customer experience.


    In brief:

  • The best selling skills and sales strategies are only as good as the promises you can deliver, and sometimes your procurement process may just let you down;

  • Rather than pushing the blame on your procurement colleagues, and explore ways that you can improve procurement procedures for better customer experience;

  • If you are not able to persuade your procurement colleagues to change their procurement practice, there are ways to convince top management to push for those necessary improvements.  Read on... ...


    To read the rest of this newsletter, pls. click here (http://www.psycheselling.com/page4.html).


How Your Procurement Practice will Affect Your Sales Performance


by c.j. Ng


     The worst thing that can demoralise your sales force is this: your sales people made the sale for a very important customer after clearing numerous obstacles in a long sales cycle that seemed to take forever, ONLY to have the products delivered in poor condition.  The customer became furious, asked for a refund, and then vowed NEVER to buy from you again.


     In fact, here's the a real case study of a foreign company in China that took every wrong step in its procurement practice, such as:

  • While it claimed to have its products imported from Germany, it actually sourced them from a factory in Guangdong province.  It didn't take long for its customers to find out which factory it sourced from;

  • The factory that produced those products began to sell them using a generic brand at much lower prices;

  • There are frequent product defects that ranged from wrong specifications to damaged goods found in the packaging to delivery of the wrong products;

  • It takes an exceedingly long time to refund customers, or provide suitable replacements, largely because payment for the supplies have been made upfront;

  • Prices for the procured products are either constantly fluctuating, or consistently rising without improvements in quality, which makes it harder to sell.

     When asked to look for better suppliers, the procurement staff replied that other suppliers are colluding with the current one, and they will all quote the same prices at similar terms.


     Unfortunately, this is not an isolated case for foreign companies in China.  It is in fact prevalent among many foreign companies here, and such issues have to be resolved if sales performance were to improve.

Getting into the Sellers' Minds

It is well-known that China is the "factory of the world".  What that means is that China also has a surplus production of all kinds of products, which is why Chinese exports are sold in virtually every corner of the world.


     What this means is that most factory bosses are facing cut-throat competition where vicious price wars are common.  However, some factory bosses are smarter than the others.  They provide tailor-made products for customised orders.


     When a supplier provide customised products, it will be much more difficult for buyers to make comparisons between products.  What many procurement managers usually do is to  source for a supplier who can produce products to specification at the desired quality for the acceptable price.  Then they just stick to that ONE supplier for subsequent orders.


     In fact, many procurement managers are unwilling to switch suppliers because there will be the costs of re-casting the molds used to produce those products.  Besides, who is to guarantee that the new supplier will be better than the old one?  So unless the current supplier really screws up big time, it is unlikely that they will be replaced in the foreseeable future.


    Such practices range from the procurement of spare parts, architectural hardware, industrial adhesives, food ingredients, travel + accommodation or even sales training programmes.


     While this makes the work of the procurement manager easier, it will unfortunately give tremendous bargaining power for the suppliers.  Here are some examples of what they will say to you:

  • "Since we need to cast the mold to produce your product, we will have to collect upfront payment";

    • What they didn't say is that you DON'T have to pay them in advance for all subsequent orders

  • "I'm sorry for the product defects (or delays), but we will be more careful next time";

    • What they didn't mention is the compensation for the defects, which is rather difficult, since you have already paid them, and they know it.

  • "I'd like to inform you that due to rising costs, we will have to increase our prices by 10% from next month onwards".

    • This is usually said when you have an upcoming big order with a tight lead time, and you don't have alternative suppliers BUT them.

  • "If you don't like to do business with us, you can always look for someone else".

    • By then there are no concrete alternatives but the current supplier's neighbours, whom have already agreed to pay your current supplier a "referral" fee for every deal they make.  In fact the products may just be shipped from the previous supplier to the new one, and then to you.


The Internal Conflict between Sales & Procurement

     Now, why is it that despite all these painful issues, many procurement managers don't take the necessary actions to improve the situation?


     One of the reasons is very simple:  when procurement makes the mistake, sometimes it's the sales person that takes the heat (from the customers)!


     Since it is the sales people, and perhaps the customer service people, who are facing customers' complaints, many procurement managers are just hiding behind their desks.  After all, they rationalise that if sales people are paid the commissions and bonuses, then let them handle those customer issues.


     If you are a sales person caught in such tough situations, there are 2 courses of actions to take. 


     Not all procurement managers are self-centred people who are only concerned about their own convenience, at the expense of others.  They just need to be engaged to make things better.  If you believe that your procurement colleague is such kind of person, then perhaps you can persuade her to go with you on joint customer visits.  Not just the nasty ones where you have to bear the brunt of customer complaints for defective products, but also the good ones where the product was delivered on time in good quality.  This is to show your procurement colleague how her work will impact your sales performance.  And do let her know that it's not your commission that is at stake, it's the company's earnings and reputation that's on the line.


     However, if your procurement colleague is indeed self-centred and believes that customer-satisfaction responsibility does not lie with procurement, you need to take more drastic measures.  Perhaps you may want to document records of product defects, delays, shipment errors etc., and then reflect to senior management how such incidents have negatively impact your sales performance, and you request their intervention.


Measuring the KPIs


     The Key Performance Indicator (KPI) for many procurement managers is how much savings the procurement manager made for the company by squeezing for lower buying prices.  Product performance (or defect-reduction), maintenance and supplier responsiveness issues are often left out of these KPIs.


     However, for customised products, it is very difficult to have a benchmark as to compare prices.  Hence, as long as the customised product is procured at the acceptable price, th job is done.  If the supplier increase prices over time, it is accepted ad part of inflation, and the procurement manager does not need to bear responsibility.

     Perhaps it is now high-time to re-think how procurement managers are compensated as well.  Just like when paying sales people commission based solely on sales volume is not viable anymore, measuring the effectiveness of your procurement staff based on products bought at lower costs is just as inadequate.


     And perhaps management should consider variable pay for procurement staff, and measure them according to:

  • Defect-rates;

  • Seriousness of defects;

  • On time delivery;

  • Reduction of shipment error;

  • Maintaining costs over time;

  • Timeliness of inventory information; etc.


     It will still be the procurement managers' prerogative to decide if they would like to work with exclusive suppliers.  However, it will be a good idea that is the supplier is on an exclusive contract (i.e. we will only buy from them), they had better demonstrate their capabilities, AND their willingness to put our interests first before theirs.


     This article isn't meant to be a guide on how to manage suppliers.  Rather, it is meant to provide some insights on how some procurement is done in China for sales managers.  If you find that your procurement department can indeed make improvements to help your sales performance, perhaps you can take the action now.


     To discuss more how your procurement practice will impact your sales performance, please e-mail info@directions-consulting.com or call +86-136 7190 2505 or Skype: cydj001 and arrange to buy me a mocha.  All information shall be kept in confidence.

Power Breakfast Hour: 12 May 2009

How Your Procurement Practice Will Impact Your Sales Performance


     Join International Sales Leadership and Performance Coach c.j. Ng in this breakfast meeting in Shanghai where he will be sharing with you the following insights:

  • What are some of the current procurement practice that the sales manager has to be aware of;
  • What are the ways the sales department can influence procurement; and
  • What senior management can do to improve sales by improving procurement practice

VENUE: Waga's Hongyi Plaza 288 Jiujiang Lu.G116 (Near Nanjing Dong Lu Subway Exit 1, pls. enter via the office entrance)

DATE: Tuesday, 12 May 2009


TIME: from 08:00 a.m. - 10:00 a.m.

PRICE: Just Pay for your Own Breakfast at the Counter (50% Off before 10:00 hrs + 1st cup of coffee @ additional RMB 12 ONLY!)

     To make this a more conducive discussion, we are expecting a small group of about 15 people only. The room can only take in 18, so please register early to avoid disappointments. Please e-mail your registrations to sales@directions-consulting.com

      Pls. check out our web sites www.directions-consulting.com and www.psycheselling.com/page4.html for more inspiration.

Practical Tips for Hiring Managers:
How to Conduct Job Interviews with Sales People

by c.j. Ng


When you are hiring new sales people, chances are that you would want to differentiate the performers from the "pretenders".

Chances are, you will be given an interview guide to help you with the interview.  But perhaps you should start with "the end in mind": what will be the right person who will perform up to your expectations, and will fit into your company for the position she is in.

So in a nutshell, here's what you need to prepare BEFORE your interview:

  • It would be better to re-look at your Job Description (JD) first, then your interview guide later, as the JD is the core of how you want your staff to perform;

  • It is better to separate the work process from the end results, e.g. achieving sales targets or maintaining margins are results, whereas doing making customer visits or understanding customers' needs are processes.  Since achieving sales targets is an end result, you’d have to add more observable processes into your JD that will give you your desired result.  

  • Prioritise which if these processes or results according to their importance.  Look for what your best performers do differently from others.  Those will be your top priority processes.

Once you've identified what you are looking for, prepare your questions in advance.  Here are some questions that you may want to ask:

  • What are some of your greatest achievements, AND how did you do that?

  • Describe what will be your ideal work environment. Why?

  • Give an example that you persuaded your boss to change his/ her mind on a major decision

  • Give an example that you overcame tough challenges to get the job done

  • Give an example on how you managed to persuade a customer to buy from you, when he/ she was initially not considering buying that product or service.

  • Describe how you would get new customers (if you are looking for "hunters")

  • Describe how you would get existing customers (if you are looking for "farmers")

  • If you were to join us, what would you want to be when you leave us? Why?

Perhaps the most interesting one should be the last question.  Now here's the method to my madness.

Sales staff turnover in China is fast becoming a high cost of hiring.  Many employers are looking for ways to find out if the candidate does have what it takes to rough it out in lull times, and bring in the results.  Employers also want to make sure that new hires aren't tempted to leave when competitors offer a mere couple of hundred dollars of pay increment.

By asking "what would you want to be when you leave us", you force a truthful answer from the candidate.  In some cases, some candidates may just say they will stick with the company till they retire.  Look instead for candidates who are candid about their aspirations, and keep a lookout for those with inspiring ones.


As for the other questions, pay attention to the details of the processes, i.e. exactly how they achieve their achievements.  It's likely that those who just want to "fake it", will not be able to give clear, logical details.


You'll also notice the usage of the question "Why". 


This is one question to understand what motivates this person.  Insights on the candidates' motivational factors will be handy in future to motivate the new hires.

For more ideas on how to interview your next sales hire, please e-mail info@directions-consulting.com or call +86-136 7190 2505 or Skype: cydj001 and arrange to buy me a mocha.  All information shall be kept in confidence.

About PsycheSelling.com


Sales... ...the lifeblood of a company, a matter of "life and death", survival or extinction.  Indeed, something that needs to be studied, applied and re-modified consistently.


Yet today,

  • many companies still don't have a coherent approach as to how they can generate more sales and achieve better margins;

  • many sales people are still lying to their customers so that they can meet their targets at the end of the month;

  • many customers are still waiting ethical and professional sales people to help them find out their real needs, and provide solutions that work 

Psyche-Selling TM is set up so that companies and sales people can make healthy profits and STILL provide genuine solutions to customers.


Psyche-Selling TM would like to create an environment where customers can trust sales people to give them what they want, and NOT be pushed with all kinds of products and services.  In return, customers will become loyal fans of these ethical and professional sales people, and repay them many fold for the long-term.


Psyche-Selling TM will not rest, until the above is achieved.  Not just in China. Not just in Asia.  But everywhere where buying and selling takes place.


Psyche-Selling TM is a wholly-owned brand of Directions Management Consulting Pte Ltd that specialises in the field of improving sales performance by enhancing the performance of the entire sales team.  Apart from the regular "selling skills training", Psyche-Selling TM conducts pre- and post-training analysis, interviews, monitoring and reviews, working closely with managers and even senior management, to deliver real improvements in sales leadership and performance.   


Hence, Psyche-Selling TM would like to be known as the preferred choice of outstanding and remarkable clients, and pride ourselves as such.  We will also be continuing to assist our clients achieve greater heights in 2009 and beyond.


Enquiries and suggestions, pls. e-mail info@psycheselling.com or visit www.psycheselling.com