Hi!
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:
-
How Your Procurement Practice will Impact Your Sales Performance; and
-
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.
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
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.
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
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.
Now, why is it
that despite all these painful issues, many
procurement managers don't take the
necessary actions to improve the situation?
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
