It's now March, and I suppose you are re-starting your engines to grow your business and achieve better results now.
While the economic outlook may not look very optimistic this year, perhaps it is thus the time to beef-up your sales force, either to develop new business opportunities, OR capture your competitor's key accounts.
Hence, this month's topics:
This issue's main article is on "Selling to Your Customer's Customer", and we would like to address a specific sales issue whereby your customer would like to buy a higher-quality product (at a higher price) from you, BUT their customer is not willing to pay more for better quality.
Selling to Your Customer's Customer
by c.j. Ng
David is one of the more experienced sales managers that know that approaching procurement/ purchasing managers to sell his high-end, high quality industrial products and solutions would be futile. Instead, he works closely with the Research & Development (R&D) departments of his customers to help them jointly create revolutionary new products for the customer's customer.
The R&D people in David's customers' organisations lap up the offer enthusiastically, even proactively asking David to provide more technical support so that the new products could be developed quickly.
Unfortunately, when David's customer presented the new, revolutionary product to the customer's customer, the latter responded with "It's great, but we need to make this cheaper." This same feedback was then passed on to David, who was then asked by his customer to reduce his price significantly.
However, after spending lots of time and resources working with the customer's R&D to jointly create this new product for the customer, David's company could not reduce price as they would have to recover the costs of this initial investments. Besides, what David is providing for the customer is already a high-end, revolutionary technology, that is not and should not be given away at cheap prices.
Now David is frustrated and
After spending months to
help the customer,
ultimately he could not make
the sale, with price being
the main reason. Now,
David is contemplating if he
should go and sell cheaper
products and solutions
one of the most precious
resources that a sales
person can have is
time. A salesperson
typically spends at most
30% of the average work
day meeting with customers
rest of the time is either
spent on travelling,
internal meetings or doing
However, not all customers are worth the while to spend quality time with. Some customers are not targeted or qualified ones, whom essentially would not be buying eventually. This could be due to mismatches in terms of needs, technology, price or even market segment. Instead of trying to win over the so-called tough customer, sales people might be better off by focusing on customers whose needs and profile matches more of what the sales people can offer, and could add value to.
While a growing number of sales people are working closely with the customer's R&D department to jointly create the next-generation product for the customer's customer, these new products eventually got rejected by the customer's customer, citing the high price as the main objection.
Although some of the customer's customer's objections can be resolved in different ways, perhaps sales people would need to take the initial step of qualifying the customer's customer. If the sales person is proposing a revolutionary next-generation product, and the customer's customer is really focusing on the low-end market, then perhaps that might not be a good match.
However, IF the customer's customer who was focusing on the low-end market, would like to re-position his business to cater for the mid-to-high-end market, then perhaps there's a chance to create value, IF he then needs a revolutionary next-generation product to do so.
Influencing Your Customer's Customer
There are times when the reason the customer buys from a supplier is solely because the customer's customer had specifically appointed that supplier to be the upstream supplier. Many sales people understand the significance of the customer's customer. However, reaching out and influencing that customer's customer is usually more complex.
Hence, while it is commendable and at times essential that sales people reach out to the customer's R&D and Engineering departments to influence them to buy the revolutionary next-generation product, it is another thing altogether if such added value could be accepted by the customer's customer at the price that all parties are agreeable to.
To make sure that the supplier does not commit too much resources for the customer's R&D when there is no real need from the customer's customer, the sales person would need to involve such discussions with the customer's sales & marketing people from time to time.
the Customer's Sales
There are many a time when
the sales person is much
well-trained than the
customer's sales force,
especially in the areas of
guiding and educating the
end customer. In other
words, if the customer's
customer voice out a price
objection of which the
customer's sales person is
unable to handle
effectively, then the sales
person might just lose the
sale. This is
especially the case if the
customer is a much smaller
company than the customer's
doing so be extremely
time-consuming for the sales
Need help in getting your sales people selling through to the customer's custoomer? Simply e-mail email@example.com or call +86-136 7190 2505 or Skype: cydj001 and arrange to buy me a mocha. All information shall be kept in confidence.
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by c.j. Ng
In essence, the factors that industrial customers are more concerned about can be summed up in the following categories:
Responsiveness. Not just
to respond to
they even asks
Resourcefulness. How external and internal resources can be contracted and packaged to the customer
Consumer customers tend to be much more fickle and are more likely to switch to different brands.
Industrial customers, on the other hand, prefer to deal with the tried-and-proven, and are much less likely to switch to different suppliers. However, they might still switch to a different supplier (even partially) if one of the following happens:
while on one
switching to competitors
still have to
away, and buy
Directions Management Consulting
Directions Management Consulting LeadershipIQ in China and Asia. LeadershipIQ helps more than 125,000 leaders every year through the facts drawn from one of the largest ongoing leadership studies ever conducted is used to help companies apply resources where the best possible results be achieved.
In addition, Directions Management Consulting is a leading provider of sales performance, innovation and experiential learning solutions in China and many parts of Asia.
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