whether those resources are capital, financial, or human. People come to the president with proposals for a new piece of equipment, a new division, a new campaign – and all of them want resources to advance their particular professional agendas.


This buyer must also make deci- sions on which proposal will best advance the company toward its objectives and, at the same time, achieve the highest possible rate of return on invested resources. People within the customer orga- nization know that this person is the “true” buyer, and not just a screener. So they don’t go to their company’s purchasing department for approval – because they know that purchas- ing agents are screeners who only disqualify.


The true buyer’s language is that of numbers expressed in terms of profit. This person thinks in terms of dis- counted cash flow, net present value of return on investment, net contribu- tion to profit, and exceeding the com- pany’s hurdle rate. This is a language foreign to most salespeople. Managers who still believe selling the key account involves an in-com- pany executive selling to a like-level executive in the customer organiza- tion are operating on a false assump- tion. The fact is, while managers like


to call what they do “major” or “key” account selling, it’s still lower-tier vendor selling. It’s selling based on a set of seller-based numbers – wheth- er specs, demographics, prices, rates, kits, or anything else dreamed up at the upper level of the selling organization.


Middle management customers buy solutions, but upper management (the ones who release the funds) buy on the basis of profit – period. Since vendor selling is becoming


increasingly cost-inefficient, and, since we can calculate the 20 percent of business that contributes to 80 percent of profit, we can now identify high-margin business that will in- crease the selling cycle. There’s an added bonus, too. High-margin accounts sold properly are almost always less volatile. Lower replacement costs add to the bottom line because more time is devoted to building on past successes than replacing lost business.


So, if economic decision makers buy on the basis of relative return, who disqualifies based on price per- formance? In the larger organizations, it’s purchasing. In smaller businesses, it’s probably the user-buyer. Although these groups buy features, advan- tages, and benefits, they seldom have the authority to release funds.


HOW TO MASTER YOUR INNER CRITIC


While small accounts can be the


bread and butter of an organization, the margins on these accounts are generally thin – and with higher turn- over. The key is data. The best sales are data based. Not our data...theirs. Do you know your customers’ industry ratios? Are there sources of informa- tion that would help you conduct a better client needs analysis? Just what does the economic buyer have to achieve financially? What problems are the user-buyers facing and what types of solutions do they need? Do these solutions fit the economic buyer’s agenda? Do you offer case studies that sup- port your ability to help your custom- er achieve his or her goals? Our firm spent 12 months working with a year-old, high-tech broadcast communications startup, helping them increase sales at the phenom- enal rate of 20 to 50 percent per month. Since the client’s product/ service concept was new, we were all learning as we went.


Part of that learning showed us that, despite the high sales growth rate, their lower-tier, vendor-based approach was accompanied by high costs – resulting in thin margins. Even projecting continued sales growth, the company would never move into the major leagues by continually selling and servicing low-margin, highly volatile business with a ven- dor-based approach using a lower- tier sales force that usually resulted in high turnover.


Instead, they decided to move to a rifle – rather than shotgun – ap- proach, utilizing a smaller, more highly trained, and sophisticated sales force. They began selling to economic buyers on the basis of relative return. The impact on profit was immediate and dramatic. The company found its profit niche through a learning process and we rediscovered that the best never drop out of the school of learning. 


THE ULTIMATE SALES LIBRARY SELLING POWER NOVEMBER 2016


| 9 © 2016 SELLING POWER. CALL 1-800-752-7355 FOR REPRINT PERMISSION.


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