(This is persuasion article No18 from the YourSalesSuccess eZine)
Hi,
Well where did we finish two weeks ago ?
Let's recap.
We'll, I had some large potential business in my sights, a customer that was unhappy with their current supply arrangement (although the OS head office was on his back about keeping costs down), a buyer that was prepared to humour me, an overseas supplier who had no local representation and a quality product that the customer had used in the past.
I had a number of obstacles: I had to convince my management to let me go after this business and I also had to convince a supplier to put me in the middle of a business where they were already being beaten on price. Then I had to resolve a price issue and get the order.
Well the first obstacle was easily tackled.
The management at the importing company I worked for was very supportive and happy enough for me to learn from my experiences.
They did check that I had done a thorough job of gathering the necessary information.
Although there were doubts about the possibility of making a sale they let me proceed.
Not surprisingly, the OS supplier was surprised by my initial approach to them and could not see any way that the business could materialise by adding the costs of a local representative, given that their pricing was already too expensive going directly to the customer.
The OS supplier declined my offer to represent them and said they were about to re quote the multinational.
I approached the multinational a few days later to learn the OS supplier was still too expensive and by what percent their quote was out.
I re approached the OS supplier letting them know I knew their offer had not been successful. (Thus alerting them to the fact I had some contacts at the multinational).
I contacted the supplier about four or five times before they agreed to quote us.
Then the work began.
I asked the OS supplier to quote ex works, FOB and delivered into Australia.
I then asked the local multinational what price they paid for their local wharf and clearing charges.
Now I had the OS suppliers price and how much more expensive they were than the opposition. I had a target !
Eureka ! I discovered that the OS supplier was paying far too much for freight and that the local prospect had somehow missed a tariff concession and was paying duty unnecessarily.
We were close but still not quite there.
I went to see the buyer again to discuss the product.
I was looking for anything to help and I wanted to remind him that the product they were using was not the preferred one and of the recent supply problems from the alternate supplier.
When I called to make the appointment he had just received the airfreight bill and had just had his you-know-what kicked.
Great timing.
When we met I did everything I could to get the buyer in touch with the pain of the recent supply problem and continued to investigate.
I queried why they needed to airfreight. It turns out they had a small window of opportunity to supply their endproduct and the orders came in by tender and were unpredictable.
I asked whether it would help if they had more safety stock on the floor.
It would, but they couldn't afford to hold the stock themselves (more pressure from management to keep raw material inventory down) and if the local supplier held stock their price went up.
I then pinned the buyer down to a higher price they could afford to pay for the privilege of having buffer stock and we worked out how much buffer stock they'd need.
(This started to associate the buyer with buying the better product from us.)
I knew the current supplier was from Asia and they almost always quoted with immediate payment terms whereas our potential supplier was from Europe where extended payment terms were an option. (Market knowledge.)
Even though we were now in the ballgame my management was concerned about the low margin of the business.
It became clear that I needed to convince the supplier to offer us consignment stock.(This is where the supplier and the agent gets paid when the customer uses the stock.)
This would solve the prospect's buffer stock issue, thus removing almost any possibility of airfreight, and improve my employer's cash flow.
After a bit of negotiating I got the OS supplier to accept con stock terms.
I guess their alternative was no business at all.
Almost there, now I only needed an order !
Having done all this work I wasn't going to settle for just a month or a quarter's supply.
I wanted to push for at least a 6 month and preferably a 12 month order.
(A trap for new salesperson would be to just rush in with the quote.)
During the meeting with the buyer every time he started to talk about the opposition product I kept reminding him of the problems he would have keeping supply of this product and the problems created by stockouts.
I would then talk about our offer and how much easier it would be for him to manage the stocks.
(I was anchoring (see Persuasion Article #22) good feelings to my product and bad feelings to the competitors.)
Finally, we then got to haggle about price
(a clear buying signal).
The problem with a 6 or 12 month contract was that buying OS currency that far ahead became expensive.
We eventually agreed that we would price the order in the OS currency and convert to local currency on the date that they declared their useage.
The business ran for some time and all parties were pleased with the deal.
As I look back on the deal, the thing that kept driving me all the way was the challenge.
Everyone thought it couldn't be done, and that just made me all the more determined to make it happen.
You could say I was lucky.
Well, "I'm a great believer in luck and I find the harder I work, the more of it I have."
Go out and get excited, put in the work and get lucky.
Here's to YourSalesSuccess.