Most sales people approach the sale from their perspective. But as I have mentioned earlier the sale will only be made if they approach the issue from the buyer’s perspective.

The DMU (decision making unit) usually would work by assigning weights to three parameters associated with the product or the service being purchased. The three factors are price, service levels and quality. A sale would be made if the total of the weighted average is the highest or lowest (depending on how the weights have been assigned) for the seller.

Now let me elaborate on this

Price

Now most of you must e thinking what is this guy talking about? Price! Isn’t that an elementary factor, the lower the price the better right? No not necessarily.

See the price is a tricky issue. Most of us approach pricing by taking the cost and making it up to ensure that we get the margins. But in the B2B (business to business) scenario the decision would depend on the weight assigned to the price.

In one such deal we approached a couple of years ago we had priced our selves very conservatively. We had razor thin margins and expected the DMU to lean in our favor. According to us the competitors had priced themselves out. But to our shock we didn’t even make it to the final list.

Now where we lost out on the deal was the other two factors Service levels and Quality.

Service Levels

In the B2B scenario we progress on each deal on a specific SLA or service level agreement. In other words the service levels for the product or service would be decided before hand while bidding for the deal. Service levels become very important in case of services like IT or payroll processing.

This can be easily over looked at times. So price is just a qualifier if you really ask me then I feel it is the service levels that have become the order winner.

Customers are coming up with innovative ways of testing your commitment to service levels. The most common way is to just start with a pilot and document the results. Let me give you an example if the SLA (service level agreement), is that a severe issue arising would be dealt with in less than 2 hours and one of moderate severity would be resolved in 4 hours and so on. This would be documented say over a period of three months. Now the sum total of the matrix would give us a summary of how many times we had met the service levels. The level that is acceptable to the DMU would ensure that they lean your way, if not then its summertime for your competitors.

Quality

Quality is a more than a buzz word these days. It was the Japanese that instilled a sense of quality in sectors like manufacturing with concepts like ‘Kaizen’ and ‘Kanban’. But it is only recently due to regulations, increased chances of litigation and growth of consumerism that quality has become a factor in purchase decisions.

Quality today is much more than reliability. It’s a sum total of all activities undertaken by the firm. All process in the organisation, right from design of the product/service to its final marketing has been the quality specifications. And it would not hurt for organisation to get into quality process like ISO series or CMMI levels.

In the Lifesciences Industry any vendor who participates with the clinical trials has to be FDA compliant as well. Not only that the standard processes that are followed have to documented way before the order is won and any deviation to the process has to documented and answered for to the regulators.

So to sum it all up, all sales people have to remember the trio that affects the DMU decision making. Not only that even the weights attached to these factors have to be taken into the consideration. But how does one come to know of these weights?

Well the best explanation is experience; with experience a salesman can figure out what would be the weights in the mind of the DMU before assessment. The other option is to figure out industry wise what are the factors. In a lot of cases its common sense some industries would be more regulated hence quality would be a factor with the most weight.

Its important that we are not weighted down by the weights instead use them to our advantage during the segmentation process it self.

Tags: , B2B, Sales Plans, Vikram

This entry was posted on Monday, July 28th, 2008 at 9:14 pm and is filed under Guest Blogger, Vikram on B2B. You can leave a response, or trackback from your own site.