Feeling Unappreciated...
By Art Waskey
Recently, I was assisting with a rep’s technical
quotation; he had spent a considerable amount of time learning and evaluating
the customer’s manufacturing needs through plant visits and interviews with
their engineers. Unexpectedly, we were notified that purchasing was initiating
a two hour reverse auction (an on-line bidding frenzy where the last and lowest
offer gets the award) to make the final vendor selection.
When was the last time you provided technical assistance
and/or invested considerable communication time with a client only to learn that
the decision-maker was making the final decision based solely on the lowest
bid?
Jim Appledorn, Distributor Sales Manager, The Lincoln
Electric Company, recently shared with me Lincoln’s
internal strategy for resolving this issue. “We use four ‘customer buckets’ to
identify client types: Value, Commodity, Service and Retail.”
1. “Value” Customers have the capacity to understand and appreciate Total
Solution and GCR (Guaranteed Cost Reduction) selling techniques. These programs
include internal customer productivity audits and proposals guaranteed to
reduce manufacturing costs. Presumably, customers will also be willing to pay
for these services. This expanded perception of services makes investing more
sales time justifiable.
2. “Commodity” Customers (regardless of sales potential) typically will NOT pay
extra for value-added services. Therefore, sales time allocations should be
restricted when calling on this group. Assigning a salesperson who manages
these customers by communicating basic pricing, inventory, and delivery
information with minimal time involvement is recommended.
3. “Service” Customers expect their suppliers to go above and beyond to meet
their needs — and are willing to pay for this level of service. Identifying
these accounts justifies extraordinary service with all employee/customer
interactions.
4. “Retail” Customers represent your stores’walk-in business. “Retail”
customers require a unique emphasis on counter sales training, inventory,
merchandising and store location. Appledorn summarized, “Certainly, if the
decision is to sell to them all, different strategies should be used to address
these different types of customers.”
When the final vendor decision was made in the opening
scenario, the Production Manager overruled Purchasing’s on-line bid auction and
awarded the contract to their current supplier at a higher price. Realization
set in that their current level of services would be jeopardized with the
lowest bidder. The value of the services provided outweighed the commodity
mentality of the lowest bid.
It has been written that the cost to acquire a NEW customer is seven times greater than
the cost to retain an existing customer. Time spent in developing customer
profiles and classifying your clients into these four groups is an excellent
investment of your sales resources. Plan your time; maximize your sales ROTI(return on time invested). You will be
profitably rewarded for your efforts!
Art Waskey is author
of >The Art of Sales in One
Month. He can be reached via e-mail at
awaskey@generalair.com.
