The psychology of
selling and negotiating is fascinating. My first job on the road was as a UK
Sales Engineer, which was a bit rich really, because I had never sold anything
on the road, and I have never been trained as an engineer! But that’s what it
said on my business card, and customers seemed to believe it.
Much depends on
what you are selling and who you are selling to. My sales roles have involved a
high degree of solution selling, whether by resolving a production bottleneck
by recommending the right machine, or by creating an aesthetic floor design
using most suitable products. It’s all about overcoming your customer’s
objections to buying your product and presenting new ideas with confidence. And
knowing your stuff.
A key element in
successful selling is to know where your own boundaries lie. Where is the line
in the sand between you and your customer that you are not prepared to cross?
Walking away from a potential order is a tough thing to do. However, that must
always remain a part of any sales person’s armoury because walking away from
non-profitable orders enables a keener focus on meeting and exceeding profit
margins, and involves less wasted time.
Back in the year
dot, I was selling high production woodturning machinery into the USA. Our
woodturning system on this side of the pond was radical, innovative, unique.
The US system had not moved on for decades, and required much more complex
loading and guarding facilities. Ours was faster, safer, and provided better
definition. So you think those powerful arguments made selling the machinery a
piece of cake? Well no!
In 1992 I visited
a company in South Carolina to give them an overview of why our machinery would
significantly outstrip the performance of their existing kit for making veranda
balusters. They were really nice guys, though obsessed with golf which I am
not. How does anyone find the time to play golf anyway? But once we got over
that little local difficulty by agreeing that the 19th hole is often
the best place on any golf course, our discussions progressed really well. They
seemed convinced and made all the right buying noises.
It took four
further visits to their facility over the following 18 months to get my first order,
and in the end I’m afraid I really stuck my neck out to get the deal, with an
offer of 50% payment upfront, then if they didn’t like the performance of the
machine within 3 months of its delivery I wouldn’t ask for the balance. Risky?
Stupid? Cavalier? Mad? Well yes, it was all of those things and a rather a lot
of expletives thrown in.
I would honestly not
recommend anyone to do anything similar. I didn’t sleep terribly well for those
3 months! However, I did know my customer. They were never going to make a
quick decision, but they were always very likely to make the right one. In the
end it paid off, and they took another four machines in the following couple of
years and were happy with them all. But it was just too risky!
That was the last
and only time I took a risk as extreme as that, but business is about
calculated risk and to not take risks is to stagnate. It is so important to
have the autonomy to make decisions when you travel to see your international
customers. You are likely to be the only company representative they ever see,
and they associate your performance with the reputation and status of your
company.
Many of you will
have experienced the little man appearing at your exhibition stand, showing
great interest in your products and then asking for exclusivity for the country
or region where they are based. Some of them are just ‘agency collectors’ and
will be of no use to you; some are the genuine article and will be able to do
what they claim. And presumably, if you are looking for representation in their
country, you will be interested in finding out more
The key with any
new enquiry like that is verification, and in a later post I will give my
further thoughts on that. But let’s deal with the issue of when and whether to
grant exclusivity. You should only grant exclusivity either if you are able to
verify through several sources that a company is a perfect fit for what you
want to do and has a track record to prove it with complementary products, or
after a period of time achieving the sales targets that you set them.
In planning your
international business and forecasting the sales turnover and profit margins
that you require from different parts of the world, you will have already set a
benchmark of what you want to achieve. In markets where you have no business at
all, you have nothing to lose in agreeing to ring-fence their activities for a
short period to learn how they operate and to establish what they are capable
of. But an exclusive distribution contract has to be earned, so don’t jump in
with both feet however exciting a prospect might appear to be!
So what lessons?
1.
Don’t take no for an answer when
you are completely sure of your ground
3.
Make agents and distributors
earn the exclusivity they demand
4.
Never admit you don’t like golf
to someone who lives and breathes it
JOHN REED
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