MKTG 3130 Week 4

UMASS Lowell Sales and Customer Relations Management

Week 4

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Sales and Customer Relations Management – Week 4

Evaluating Your Position in a Sale:

Red Flags – Leveraging Strengths – Buyer Response Modes

Selling can be a bit like investing in the stock market. If you are lacking a

strategy, then your expectations for making a gain can swing like a

pendulum from wild optimism to deep pessimism. Your emotions will cloud

your judgement and keep you from forming an objective assessment of

potential outcomes. Even worse, you’ll be unlikely to see the true gaps in

your competitive position or, conversely the opportunities to leverage

unique advantages.

The remedy for this ailment is to have a strategy that’s well informed by

facts. Effective information gathering is the key to making an informed

assessment of your true position for a sales opportunity. Any gaps in your

view of the customer’s decision dynamics – such as not knowing all the

decision makers, not understanding buying motivations, not knowing which

of your product’s features and benefits will most impact the customer - will

reduce your chances of making the sale.

The Strategic Selling framework provides an organized method for

identifying dangerous gaps in knowledge (Red Flags) as well as valuable

differentiators (Strengths to Leverage) in order to improve your competitive

position.

Red Flags

The symbolism of a Red Flag highlights critical information that’s missing or

unclear about your Single Sales Objective. Red Flags are not “negatives”.

Image of a

Red Flag

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In fact the symbolism of a red flag is akin to the situation of a driver on a

winding mountain road. As he comes around a corner, he sees a road

worker holding a red caution flag. The driver is grateful for the advance

warning about an impending road hazard. He drives ahead with heightened

vigilance. As a sales rep, your clear eyed assessment of knowledge gaps

or other shortcomings is the first step in acting to remove any obstacles to

making the sale. Examples of Red Flags are:

 New, or as yet un-contacted Buying Influences – if you haven’t

identified or met all key buying influences yet then the probability of

making a sale remains uncertain.

 Reorganization, transformation, corporate action – any organizational

or structural changes in the midst of a customer’s purchase

assessment will require you to redefine the buying group and roles.

 Uncertainty about other key informational aspects

 Emerging competitor – has a new rival come on the scene?

 Technology shifts, compatibility issues – has a change in IT standards caused your product to be considered non-compliant

 Mandates for standardization – has a corporate standard been established that all business units must recognize?

Any of these developments should prompt an aggressive information

gathering effort to determine if your position has been weakened in any

way. This is where having developed an internal Coach can be very helpful

advantage in clarifying your position, countering any weaknesses and

removing Red Flags.

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Strengths to Leverage

Companies are always striving to establish aspects of differentiation related

to their product features and benefits or their service delivery.

Differentiation helps thin the ranks of competitors and minimize price

competition. Differentiated advantages can be derived from the following:

 Superior technology

 Ease of use

 Low overall cost of ownership

 Patents

 Compatibility with industry standards

 Use these advantages to improve your position by highlighting the

benefits to decision makers and stressing that they are unique to your

product/company.

 But…to be considered a Strength, it must be relevant to the current

sales objective. It must be something this customer cares about.

 True Strengths tend to lessen price sensitivity. If customers are

convinced of the benefits, and that they are unique to your product

and company then price comparisons with your competitors become

of secondary importance.

 Harder for customers to make apples-to-apples comparisons

Image of

Barbells

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Competition

Well…what about the competition? Where do they fit into the Strategic

Selling framework? One thing is for sure – you never want to let the

competition set the agenda. You need a proactive competitive strategy

 You set the agenda and the standards for comparison

 You have the inside intelligence on how key decision makers feel

about change (growth vs trouble)

 You have the edge in delivering corporate benefits that matter to

the customer (Results) and personal benefits to buying influences

that matter (Wins)

 Make a credible case for your superior contribution

 Convince the customer that what you have to bring to the table is

totally unique and of high value

 Not just product features and functions

 Anticipate tricky situations

 Competitor is entrenched – patience, hard work needed to

broaden your contacts, find a weakness in their coverage of

customer’s needs

 You’re the high-priced supplier – emphasize perception of value

and higher resulting ROI

 Customer simply wants a competitive bid – absent the insights of

the strategic selling approach – it sets you up for a Lose/Lose

Competition Comes From Four Sources

People tend to think too narrowly about their competition. Sure, there are

companies that sell similar products and face off against you on a regular

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basis. But think about the full range of alternatives to a customer

purchasing from you:

1. Buying from someone else – the traditional definition

2. Internally sourced solution – a make vs. buy decision that favors using

internal resources and options

3. Reallocate funds to another priority – you were investment opportunity

“A”…they chose option “B”. You still lose.

4. Do nothing…defer…cancel the project – this can be avoided by making

a more convincing case for your product as an investment with a

credible ROI. Get the customer to think in terms of “investment” rather

than “expense”

Single Sales Objective

It’s important to have a well-defined objective when you apply the

framework of Strategic Selling. There are many business purposes to

engage with customers, but this process is specifically designed to

shorten the sales cycle and achieve a specific economic transaction.

 It’s product, service or solution-related, clear and concise.

 It’s measurable, and tied to a timeline

 All four of these customer options will compete with your solution

 Define your total contribution to their business – not just your products and features

 Define your relationship on a higher plane – as a joint venture vs. simply a vendor arrangement

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 Here’s an example of a Single Sales Objective

Response Modes – Buyer Reaction to Change

Image of Four Growth Modes G=Growth, T=Trouble, EK = Even Keel and OC =

Overconfident

Often, key decision makers aren’t aligned on the reason for a purchase.

Sales reps need to probe extensively to understand each player’s frame of

mind. There are four general categories of response mode:

 Growth – a gap is perceived between what the buyer’s organization

is currently achieving and what they could achieve with the right

investment. Buyers with this mindset will be responsive if your

proposal is convincing on improvement.

 Trouble – buyer needs help. A gap is perceived between where they

are now and where they feel they should be. They will welcome

credible proposals to remove problem areas.

To sell Mentor Graphics PCB Division a new network intrusion detection

product to reduce their hacking risk for $450,000 by March 2016

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 Even Keel – they are satisfied with status quo. This is a tough nut to

crack, but if you are skillful at “problem finding” then you may be able

to convince them of a growth or problem gap.

 Overconfident – totally unreceptive to change. This is the toughest

of all. One or more buying influences have an unrealistically positive

perception of where they are now. May not be worth your time – until

events prove them wrong.

Summary of the four Response Modes linked to associated attitudes:

Response mode Probability of taking action

Buyer question

Growth (G) High Does your proposal reduce obstacles to exploiting an opportunity?

Trouble (T) High Does your proposal help fix my problem?

Even Keel (EK) Low Why do I need to make a change?

Overconfident (OC) Nil Who needs your proposal…I don’t!

Points to ponder… • What if some decision makers are concerned about “trouble”

but others are “even keel” and not desirous of changing the status quo?

• What buyer perception is the most powerful in driving change – “growth” or “trouble”?

• Think of some of your own recent purchase situations. What motivated you to part with your hard-earned money? Or if you didn’t pull the trigger – why not? Did a sales person play a role either way?

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Remember, reality is defined by the Buying Influence’s Perception of the

selling situation…not yours. Your perception that “the glass is half empty”

may be at odds with the customer’s response mode “…it’s half full”. Trying

to convince a customer with an Even Keel response mode that they have

Trouble on their hands can be challenging, and even alienate you from the

customer. They may feel that your admonitions are self-serving – that you

are simply making up issues to help sell your product.

Rating the Buying Influences’ Attitude to Your Offering

Once you know how each Buying Influence feels about change and about

making a purchase (i.e. their Response Modes), you then need to look in

the mirror, and ask “how do they feel about my proposal?” They might be

enthusiastic about making an investment (Growth Response Mode) but be

less than thrilled about your solution. Using the four graphic symbols below,

you can assess the attitude of each Buying Influence towards your

company’s proposal.

Images for a buyer’s four general attitudes about your proposal – Enthusiastic,

Interested, Negative or Antagonistic

Below is a continuum of ratings starting with +5 (Enthusiastic Advocate)

and ending with -5 (Antagonistic Anti-sponsor). As you evaluate each key

decision maker using this scale, it forces you to be disciplined about where

your position with one of these players may need additional focus.

For instance, if you rate the Technical Buying Influence a -3 then you have

a Red Flag to deal with. As we know from last week’s discussion, Technical

Buyers can veto or rule out a supplier based on specification or compliance

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deficiencies. Better get busy and educate him/her about your product’s

technical specifications before it’s too late!

Image showing the range of a buyer’s receptivity to your proposal ranging from

Enthusiastic (+5) to Antagonistic (-5), with symbols for strength (barbells) at the

top of the range and for issues to resolve (red flags) at the bottom.

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So…once you’ve identified each Buying Influence on their degree of

influence (High-Medium-Low), and their Response Mode (Growth-Trouble-

Even Keel-Overconfident), you can add your Rating of their Attitude

towards your proposal (+5 to -5) and you’ll have a complete picture of your

position with each player as shown below:

Buying Influence

Degree of Influence

Response Mode

Attitude Rating

Economic H EK -2

User H T +3

Technical L T -3

Coach L G +4

Table showing categorization for each Buying Influence for three key

variables – Degree of Influence, Response Mode and Attitude Rating

How would you assess the situation above? Who is the most influential?

Are they leaning towards change …likely to make a purchase decision?

Are they favorably disposed to your proposal? Hopefully you can

appreciate that a multidimensional assessment like this helps to surface

Red Flags, and helps point the way to actions that are appropriate for each

gap in your position that needs resolution.

As the old saying goes…hope is not a strategy. Only a clear eyed objective

assessment of your position with a prospective buyer will ensure that you

have the time and knowledge to cover all the bases and ultimately achieve

a superior competitive position that will get you the sale.

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Next week we will cover two fundamental aspects of success in business-

to-business selling.

- The Importance of Winning – this relates not to your success, but

rather to uncovering and delivering “Wins” to the key customer

decision makers. Wins are personal, so close engagement with each

Buying Influence is necessary to identify what personal Win would

matter to each of them.

- Delivering Results – at its most elemental, every B2B proposal has

to show a customer how they will achieve either lower cost or

increased revenue from buying your product. Results are corporate.

They are tangible, measurable and often articulated in terms of return

on investment or payback period.