Advancing your sales process: Dealing with Purchasing managers
Selling to Muggles: How to Make the Sale When Buyers Have No Idea What You're Talkin' About
Note: Muggle, in the Harry Potter series of books by J. K. Rowling, refers to a person who lacks any sort of magical ability and was not born into the magical world.
Jack has been working closely with a new client for several months to try to get them to switch from their current supplier to Jack's company. Since the particular materials they use can vary a lot from system to system, Jack has lots of questions and wants to make sure it will meet the customer's needs. Based on Jack's understanding of what the customer's current vendor is providing, it's unlikely that this competitor could meet the customer's needs for energy and waste reduction, even though the competitor claims otherwise.
Armed with the latest research to show that if the customer would just switch, they could definitely achieve substantial cost savings in energy consumption and waste disposal, not to mention additional improvements in productivity due to reduction in maintenance-related downtime.
Jack then approached the customer's Purchasing Manager who has a reputation for always trying to cut costs to the bone, that Jack felt like it's almost a personal thing for her. It didn't help things when Jack's product, while far more superior than the current one the customer is using, is priced 50% higher per unit. Furthermore, as Jack's product is a new innovation that had just been launched into the market. That means, the Purchasing Manager hasn't heard or known about the benefits of such technological improvements. Although the Purchasing Manager knows a fair bit about the business, she misses some of the business, technical and user advantages of Jack's product.
Undaunted, Jack set up the meeting with the Purchasing Manager, hoping that he can convince her with his research data. To Jack's dismay, the Purchasing Manager was ONLY interested in price. All the research data that showed the potential cost savings did not appeal to the Purchasing Manager at all. In fact, it is precisely that Jack's product is a new innovation that sparked the Purchasing Manager's concerns that the new product's delivery reliability and quality consistency might not match those provided by their current vendor.
Feeling frustrated, Jack now explores what other options he has in order to move forward with this client.
Muggles vs. Wizards
Let's face it. None of us can be a "Wizard" in all aspects of our work. So it is normal that some of the Purchasing Managers we face can be a Wizard in managing the purchase, but is a Muggle when it comes to understanding their company's business, technical and users needs. Based on our preliminary surveys, about 83% Purchasing Managers rank the following criteria as the most important when considering a purchase:
1. Price
2. Flexible payment terms
3. Fast and reliable delivery schedules and consistent product quality
4. Ease of maintenance
5. Reputation of the Vendor
By and large, Purchasing Managers are not familiar with "the Total Cost of Ownership" concept, and are very skeptical about how your products can help them reduce costs, improve productivity or reduce hazardous risks. They are usually Muggles when it comes to helping their companies achieve better business results.
If you are skeptical with the above findings, look around you and ask:
• How many Purchasing Managers can tell you how they can help the company achieve better cost-down, without reducing the price of their purchases?
• How many Purchasing Managers actually go down to the suppliers' plants or warehouses to physically inspect their purchases, since reliable delivery and consistent quality is a key concern?
• How many Training Managers (who purchase training programmes) can suggest practical ways to identify training needs and improve training effectiveness?
Purchasing Managers also don't usually initiate the sourcing of new innovations in the supply of materials and equipment. It's usually the user's departments that raise the need to upgrade or source for new and better supplies for production. These needs to switch to or explore new suppliers can include:
• Addressing a flaw in the current supplier's materials or equipment;
• Sourcing for a back-up supplier in case there are outages caused by either sudden increase in production needs, or the lack of inventory of the current supplier
• Upgrading the equipment and materials to produce better quality products due to a new requirement in the customers' market
Buyers are not necessarily confined to Purchasing Managers only, and even if the Buyer is the boss or managing director or CEO, that does not mean that he or she is automatically a Wizard or a Muggle. Sales people will have to exercise caution and sound judgment to decide if there are needs to further educate the customer.
Open vs. Closed Customer
Besides distinguishing between Muggle and Wizard customers, sales people also have to distinguish between customers who are more "Open" to discussions and the external world, as well as those who are "Closed" to discussions and exploration of future possibilities.
Hence, we can group buyers into the following 4 combination:
• Open Muggle;
• Closed Muggle;
• Closed Wizard;
• Open Wizard
If your goal is to persuade and educate the Buyer, then you are referring to the "Open Muggle". These are the Buyers who understand there are limitations to their understanding of their buying needs, and are willing to take steps to understand more. In fact, they don't confine their understanding of their buying needs and requirements to just the sales person. Rather, they take steps (and sometimes great pains) to communicate with their business, technical and user stakeholders so as to understand their needs as well. These are the Buyers who will appreciate the sales person's help in educating them, and will resent those who want to take advantage of their lack of knowledge.
"Closed Muggles" are those who don't know what they are doing, but often assume or pretend they know. They tend to focus a lot on price, block any attempt for you to talk to any of their colleagues, and refuse to learn their company's business. Unfortunately, most Purchasing Managers belong to this category. With the "Closed Muggles" it's either you are referred by someone who knows them well, or you may have to out-flank them and talk to someone else instead.
"Closed Wizards" tend to be authoritative figures who know what they are doing and are directive in their communication. They tend to give clear instructions to sales people, and will not accept any "if, and or but". While "Closed Wizards" may know a great deal about their business and how to get the best deal from sales people, they are unlikely to be "Wizards" all the time, and might make judgmental errors too. When dealing with the "Closed Wizard", sales people will have to do lots of preparation, and be prepared to answer lots of difficult questions.
Finally, there are the "Open Wizards", and are so-called because they know their stuff and are still open to new ideas and discussions. These Buyers are the rarest in the market, and are almost undetectable. They tend to judge sales people by the questions the sales people ask to see if the sales people know their own stuff. "Open Wizards" are in no hurry to demonstrate their in-depth knowledge, and prefer to share those knowledge to sincere sales people who would like to explore better solutions that deliver better results.
Advancing Your Sale
Even when you can distinguish whether a Buyer is a Muggle or a Wizard, or is she Open or Closed, you will not know what the Buyer really is until you have met her. By then, the Buyer would have then made her opinions and judgments about you, regardless of what she is.
Hence, here are some tips on how you can create good first impressions even with the toughest of the Buyers:
• Be prepared. Don't just rush out for the sales meeting. Do prepare for some tough questions or even objections that you may need to answer;
• Build trust. Don't rush into selling just yet. Seek to understand your customers' business, technical and user needs, then your customer will want to understand your solution;
• Don't just "die" with one contact. Beware the Buyer who claims to be the Key Decision Maker when he is not. Typically, Key Decision Makers don't claim they are Key Decision Makers, and those who claim so are usually not. Be prepared to develop networks within the customer's organisation.
Ultimately, the sales person would have to size up the sales situation and know what kind of Buyer is she dealing with, so as to implement the most suitable sales strategy to advance the sale.
Until next time
Note: Muggle, in the Harry Potter series of books by J. K. Rowling, refers to a person who lacks any sort of magical ability and was not born into the magical world.
Jack has been working closely with a new client for several months to try to get them to switch from their current supplier to Jack's company. Since the particular materials they use can vary a lot from system to system, Jack has lots of questions and wants to make sure it will meet the customer's needs. Based on Jack's understanding of what the customer's current vendor is providing, it's unlikely that this competitor could meet the customer's needs for energy and waste reduction, even though the competitor claims otherwise.
Armed with the latest research to show that if the customer would just switch, they could definitely achieve substantial cost savings in energy consumption and waste disposal, not to mention additional improvements in productivity due to reduction in maintenance-related downtime.
Jack then approached the customer's Purchasing Manager who has a reputation for always trying to cut costs to the bone, that Jack felt like it's almost a personal thing for her. It didn't help things when Jack's product, while far more superior than the current one the customer is using, is priced 50% higher per unit. Furthermore, as Jack's product is a new innovation that had just been launched into the market. That means, the Purchasing Manager hasn't heard or known about the benefits of such technological improvements. Although the Purchasing Manager knows a fair bit about the business, she misses some of the business, technical and user advantages of Jack's product.
Undaunted, Jack set up the meeting with the Purchasing Manager, hoping that he can convince her with his research data. To Jack's dismay, the Purchasing Manager was ONLY interested in price. All the research data that showed the potential cost savings did not appeal to the Purchasing Manager at all. In fact, it is precisely that Jack's product is a new innovation that sparked the Purchasing Manager's concerns that the new product's delivery reliability and quality consistency might not match those provided by their current vendor.
Feeling frustrated, Jack now explores what other options he has in order to move forward with this client.
Muggles vs. Wizards
Let's face it. None of us can be a "Wizard" in all aspects of our work. So it is normal that some of the Purchasing Managers we face can be a Wizard in managing the purchase, but is a Muggle when it comes to understanding their company's business, technical and users needs. Based on our preliminary surveys, about 83% Purchasing Managers rank the following criteria as the most important when considering a purchase:
1. Price
2. Flexible payment terms
3. Fast and reliable delivery schedules and consistent product quality
4. Ease of maintenance
5. Reputation of the Vendor
By and large, Purchasing Managers are not familiar with "the Total Cost of Ownership" concept, and are very skeptical about how your products can help them reduce costs, improve productivity or reduce hazardous risks. They are usually Muggles when it comes to helping their companies achieve better business results.
If you are skeptical with the above findings, look around you and ask:
• How many Purchasing Managers can tell you how they can help the company achieve better cost-down, without reducing the price of their purchases?
• How many Purchasing Managers actually go down to the suppliers' plants or warehouses to physically inspect their purchases, since reliable delivery and consistent quality is a key concern?
• How many Training Managers (who purchase training programmes) can suggest practical ways to identify training needs and improve training effectiveness?
Purchasing Managers also don't usually initiate the sourcing of new innovations in the supply of materials and equipment. It's usually the user's departments that raise the need to upgrade or source for new and better supplies for production. These needs to switch to or explore new suppliers can include:
• Addressing a flaw in the current supplier's materials or equipment;
• Sourcing for a back-up supplier in case there are outages caused by either sudden increase in production needs, or the lack of inventory of the current supplier
• Upgrading the equipment and materials to produce better quality products due to a new requirement in the customers' market
Buyers are not necessarily confined to Purchasing Managers only, and even if the Buyer is the boss or managing director or CEO, that does not mean that he or she is automatically a Wizard or a Muggle. Sales people will have to exercise caution and sound judgment to decide if there are needs to further educate the customer.
Open vs. Closed Customer
Besides distinguishing between Muggle and Wizard customers, sales people also have to distinguish between customers who are more "Open" to discussions and the external world, as well as those who are "Closed" to discussions and exploration of future possibilities.
Hence, we can group buyers into the following 4 combination:
• Open Muggle;
• Closed Muggle;
• Closed Wizard;
• Open Wizard
If your goal is to persuade and educate the Buyer, then you are referring to the "Open Muggle". These are the Buyers who understand there are limitations to their understanding of their buying needs, and are willing to take steps to understand more. In fact, they don't confine their understanding of their buying needs and requirements to just the sales person. Rather, they take steps (and sometimes great pains) to communicate with their business, technical and user stakeholders so as to understand their needs as well. These are the Buyers who will appreciate the sales person's help in educating them, and will resent those who want to take advantage of their lack of knowledge.
"Closed Muggles" are those who don't know what they are doing, but often assume or pretend they know. They tend to focus a lot on price, block any attempt for you to talk to any of their colleagues, and refuse to learn their company's business. Unfortunately, most Purchasing Managers belong to this category. With the "Closed Muggles" it's either you are referred by someone who knows them well, or you may have to out-flank them and talk to someone else instead.
"Closed Wizards" tend to be authoritative figures who know what they are doing and are directive in their communication. They tend to give clear instructions to sales people, and will not accept any "if, and or but". While "Closed Wizards" may know a great deal about their business and how to get the best deal from sales people, they are unlikely to be "Wizards" all the time, and might make judgmental errors too. When dealing with the "Closed Wizard", sales people will have to do lots of preparation, and be prepared to answer lots of difficult questions.
Finally, there are the "Open Wizards", and are so-called because they know their stuff and are still open to new ideas and discussions. These Buyers are the rarest in the market, and are almost undetectable. They tend to judge sales people by the questions the sales people ask to see if the sales people know their own stuff. "Open Wizards" are in no hurry to demonstrate their in-depth knowledge, and prefer to share those knowledge to sincere sales people who would like to explore better solutions that deliver better results.
Advancing Your Sale
Even when you can distinguish whether a Buyer is a Muggle or a Wizard, or is she Open or Closed, you will not know what the Buyer really is until you have met her. By then, the Buyer would have then made her opinions and judgments about you, regardless of what she is.
Hence, here are some tips on how you can create good first impressions even with the toughest of the Buyers:
• Be prepared. Don't just rush out for the sales meeting. Do prepare for some tough questions or even objections that you may need to answer;
• Build trust. Don't rush into selling just yet. Seek to understand your customers' business, technical and user needs, then your customer will want to understand your solution;
• Don't just "die" with one contact. Beware the Buyer who claims to be the Key Decision Maker when he is not. Typically, Key Decision Makers don't claim they are Key Decision Makers, and those who claim so are usually not. Be prepared to develop networks within the customer's organisation.
Ultimately, the sales person would have to size up the sales situation and know what kind of Buyer is she dealing with, so as to implement the most suitable sales strategy to advance the sale.
Until next time
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