eNewsletter Mar 2015: Selling to Your Customer's Customer

Hi!

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:

Selling to Your Customer's Customer; and
Service Standards for Industrial Products and Services

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.

In brief:

Since time is perhaps the most precious resource a sales person can have, it is essential that sales people spend time on well-qualified prospects. It is sometimes worthwhile to take the next step of qualifying the customer's customer, before committing too much time and resources on that customer;

To sell to your customer's customer, sales people would have to work with various functions within the customer's organisation, including R&D and Sales & Marketing. Influencing your customer's Sales & Marketing team could be a good way of winning their customers

At some point, sales people might even have to help their customer's sales people to create and justify the value that they can jointly create for the customer's customer. Failing to do so may result in loss of sales after months of effort trying to win the sale. Read on... ...

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

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 devastated. 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 instead.

Qualifying Your Customer's Customer

Perhaps 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 face-to-face. The rest of the time is either spent on travelling, internal meetings or doing admin work.

What this means is that sales people can waste their precious time on poor prospects who are unlikely to buy, or they can focus their energies on qualified prospects who could eventually become paying customers.

At the same time, experienced sales people are acutely aware that they should spend more time with non-Purchasing or non-Procurement people in the customers' organisations, such as R&D or Engineering or Production so that they can get deeper insights about the customers' needs, and even help identify hidden needs where the sales people could add value.

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.

It is unusual and at times, strange, for the sales person to reach out directly to the customer's customer. It is thus more likely that the sales person reaches out to the customer's sales people to understand more about their customer's needs and concerns.

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.

Coaching the Customer's Sales People

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 customer.

As such, the sales person might need to do the following:

Conduct joint sales calls with the customer's sales people; and
Coach the customer's sales people on how they could in turn handle their customers

Would doing so be extremely time-consuming for the sales person? Definitely!

However, as mentioned earlier, the sales person would have to qualify the customer and the customer's customer to make sure that it's all worthwhile before making such huge time and resources commitment. It is also just as important for the sales person to have frequent sanity checks along the way so that what the sales person is selling through to the customer's customer is relevant to their needs.

Need help in getting your sales people selling through to the customer's custoomer? Simply 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: 25 Mar 2015

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

Tips for Customer Service Professionals:
Service Standards for Industrial Products and Services

by c.j. Ng

Let's face it. Service standards for industrial and consumer products are completely different.

While consumer products could be well-concerned about issues such as delighting the customer and brand loyalty, industrial customers focus on matters that are rather different

In essence, the factors that industrial customers are more concerned about can be summed up in the following categories:

Reliability. Whether you, as the seller or service provider, can deliver your promises in ALL aspects ranging from product quality, delivery lead times, maintenance schedules etc.

Relationship. In essence, building mutual trust between the seller and buyer.
Responsiveness. Not just responsiveness to customer's request, but also taking the initiative to respond to the customer's needs BEFORE they even asks for it
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:

The current supplier made a huge mistake and caused the customer significant losses or customer complaints;
The customer has a need that the current supplier is unable to fulfil; OR
The customer placed a huge order that the current supplier could not fulfil the entire volume on time

Hence, while on one hand industrial service providers could be less concerned about customers switching to competitors right away, they would still have to manage these customers' expectations and deliver the appropriate service standards. For competitors will definitely be trying to lure your customers away, and buy from them instead!

To find out how you can implement great service for industrial products and services, you can e-mail info@directions-consulting.com or call +86-136 7190 2505 or Skype: cydj001

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.

Using the Belbin Team Role Profiling, Directions Management Consulting helps develop high performance teams and leadership at every level.

Psycheselling.com is the sales performance arm of Directions Management Consulting specialising in conducting training, research and consulting services for sales managers and their team.

Raybattle is the strategic partner of Directions Management Consulting specialising in experiential learning events and management retreats.

Currently, Directions Management Consulting has served clients such as TE Connectivity, InterContinental Hotels Group, Alcoa Wheels, Standard Chartered Bank, Merial, ThyssenKrupp, Lowe's Global Sourcing, Diehl, Kulzer Dental etc.

Directions Management Consulting will increase its efforts to conduct leadership studies in China and other parts of Asia, so that more companies apply resources where the best possible results be achieved in this part of the world.

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