Column 2 Selling

To fill in Column 2 with measurable benefits, you must contact individuals who do not equate price and delivery with value: owners and beneficiaries. The people who "own" the budgets that fund purchases are owners. The people who derive the most value or benefits from these purchases are beneficiaries. Owners reside at the top of the decision-making chain. When you sell to owners, you engage in top-down selling. You have the ability to negotiate price as a function of value.

In consumer or retail sales, top-down selling is easy. Consumers are the owners. In business-to-business selling, many more people are involved in purchasing decisions. Although the process is the same, finding the owners is difficult if you do not know where to look for them in organizations. Additionally, owners speak a language foreign and uncomfortable to most salespeople. Instead of speaking features and benefits, they use words associated with executive perspectives and economic value. Terms like return on investment, corporate goals, net present value, company initiatives, and positive cash flow pepper their vocabulary.

Once you find out owners' goals and understand how they measure value, you can help them to fill out Column 2. In addition, you ask owners what role the beneficiaries play in the decision-making process. Often, salespeople make beneficiaries more important than the owners. Let the owners decide who is important. After all, it is their money.

Most salespeople prefer to contact beneficiaries first and engage in bottom-up selling. Beneficiaries understand the technical nuances of products better than owners do. They like to talk about features and benefits. They are the perfect matches for salespeople who are trained to talk technical and conduct product presentations. Yet, in between lengthy product discussions, sales problems can surface—ones that only meetings with owners can solve.

Problems arise when beneficiaries' goals and purchasing requirements differ from those of owners. The larger the differences, the greater the potential is for wasting your time, efforts, and resources on dead-end sales opportunities. Although you might be dealing with unknowns, beneficiaries have proven they know how to get purchase orders signed. Therefore, you gamble that they have the authority or influence to get more purchase orders signed.

You depend on them to either arrange for you to meet with owners or have them sell inaccessible owners on your proposals. Bottom-up selling works well in established relationships; however, it loses much of its effectiveness with new prospects or customers that do not have proven track records. Where you start the sales process is often where you end up. Always strive to start with owners.

While relying solely on beneficiaries possesses its share of challenges, it also has its fair share of rewards. It becomes harder to make that comment about the individuals found in Column 1 opportunities.

Column 1 Selling

Customers find it easy to fill in Column 1, because all they need to do is the following:

• View competitive products as commodities with equal product features and benefits.

• Receive proposals from at least two suppliers.

• Compare price and delivery differences between suppliers.

• Decide if these differences are large enough to warrant switching to a new supplier (overcome the value of an existing relationship) or proceed with the purchase (overcome the cost of changing products or services).

The people most likely to make buying decisions along these lines are purchasing agents or managers. Sometimes, to help them make purchases, companies hire third-party intermediaries such as contracting firms, engineering firms, architectural firms, and management firms. Like purchasing personnel, intermediaries rely on the bid system. It equates lowest prices or fastest delivery schedules to best buys. It concentrates on Column 1, almost completely ignoring Column 2. Therefore, intermediaries invite as many competitors as possible to bid. When it comes to driving prices down, they know the more the merrier.

Yet, bids still attract salespeople to them like mosquitoes to a bug zapper—often with the same results. Zap! Understandably, it is hard to pass up opportunities when you know customers are going to buy something from someone. Why not you? Yet, bids can become tremendous time robbers. All you need to do is look at bid documents to understand why.

Bid documents are at the heart of the bid process. They contain specifications that describe technical or operational features or capabilities your products must meet. Some are so specific that they are difficult to satisfy—for example, quarter-inch stainless steel, twenty widgets per minute, twenty-four-hour response time, and 200 horsepower. Others are so broad that it is almost impossible for you not to satisfy them. Terms such as "established credentials," "improve operations significantly," and "enhance performance," mean whatever anyone wants them to mean.

You mix these two extremes in one package and you have a lot of room for interpretations and disappointments. Yet, bid documents have a more fundamental flaw. They focus on product features (Column 1 details), not owners' measurable goals (Column 2 details). Without defined goals, it is difficult to determine whether any product meets owners' expectations. Everyone is trying to hit moving targets. Therefore, a catch-all goal surfaces in the bid process. Intermediaries award sales to companies that supply what is considered to be "the most value." Translation: Quick and cheap products win bids. Without measurable goals, everyone's products and services look the same.

However, even in a bid process, preferred salespeople exist. Intermediaries give them the inside track to help them win bids. Favored salespeople insert their products' unique strengths into the bid specifications and documents. The goal is to use their benefits to outweigh competitors' lower prices or faster deliveries. However, specifications tailored to your unique strengths can be a curse as well as a blessing for two reasons. First, you must count on competitors adhering to the bid specifications describing your unique strengths. If they choose to ignore them, ironic situations result.

Let's say you coauthored bid documents to end up as the only salesperson who can meet the specifications. This compliance raises your costs and lowers your price competitiveness. For instance, if you are the only one to supply titanium-tipped pens while competitors supply ballpoints, you are the only one adding costs to your bid. Without fear of penalties, competitors can win by simply ignoring specifications they cannot satisfy—the same way you would.

Therefore, you always want to find out what penalties, if any, competitors receive for noncompliance. In weak-enforcement bids, let competitors influence the specifications and be obligated to abide by them. Let them comment on the ironies of losing bids built around their unique strengths that you ignored.

Second, to keep unique strength specifications from becoming a negative, you must connect them to measurable goals to produce value. Otherwise, they look transparent and superficial. In bids where goals are vague, you cannot match them up. They appear to serve no purpose other than as artificial barriers to competition. This can hurt both your credibility and that of intermediaries.

Sharp-witted competitors will show owners where these so-called unique strengths only add costs, not benefits. Therefore, if comparisons between bids do not reward your unique strengths, they erode your competitiveness. They become unique weaknesses. For the most part, the bid process discounts the value of unique strengths.

Even if awarded the bid, you invest a great deal of time, effort, resources, and profits defending services or justifying costs. Thus, profit margins suffer. Still, it is not a bad outcome considering the alternative of losing the sale. However, no sale is a complete victory without compensation for the value of your unique strengths.