In the first part of this article I discussed changes in how paper is (not) being used, focusing on G&A expense reduction in your business, looking at service revenue that is unsustainable, and growing market share. In this article I’m going to focus on sales processes.
Selling copiers has become bigger, better, faster, less money. I constantly hear copier sales people trying to get into an account by promising they can “save you money and provide better service.” The second part of that value proposition would infer that your competitors are offering poor service, and frankly, I don’t see that. When I make that statement to a sales professional I always get “I took X account from Y competitor six months back because they were getting bad service.” OK, if a company scored 98% on a survey question that said “I’d absolutely buy from this company again” then 2% of their customers might leave at their next purchase. But if a company had a 98% retention rate they’d probably be in the 99 percentile in any industry. That doesn’t mean you won’t lose customers. Yet if you stumble upon that 2% you’d think the company couldn’t satisfy their customers when the exact opposite is true.
A few years ago some of the cell phone companies would highlight their coverage vs. their competitors; at that time, as companies were building out cell towers to keep up with demand, certain carriers had better service than other carriers. I never see one of those commercials these days and I rarely hear anybody say “I don’t get service with Y Company here” when using their cell phone, which was a common complaint five years back. The cell phone companies stopped with that value proposition because of near parity in service. It’s time to put the “we have better service” on the back burner because it keeps us from conducting a good discovery and finding a real business case for a company to do business with us.
And talk about distractions from a real business case—saving a company money on their copier! That is one of the most absurd value propositions possible, given how much a copier actually costs a company. The average copier is under $8,000 but we’ll use $8,000 on a 60-month lease, which today would be less than $160 a month. The average monthly aftermarket is $105 for a total monthly expense of $265. What are you going to save these folks, $15? That’s your strongest value proposition for doing business with your company that you’re going to save that $20 million a year company $15 a month? Do you see the absurdity of that approach?
Back when 50-ppm devices cost $25,000 and interest rates were 8% and aftermarket rates were 50% higher than today maybe you could save a company money. Maybe, taking that $775 a month payment to $700 would have some value to the company, although in the scheme of running a business $75 a month isn’t much of a needle mover. Today, I believe talking about price is detrimental as it makes the buyer believe they should shop you around and they lose focus of the lack of materiality of the expense.
Consultative selling, strategic selling, it has many names, but my definition would be that you understand a customer’s/prospect’s business and can help them fix issues they are having in that business. For my purpose I am going to call it consultative selling for the remainder of this article and to me consultative selling starts with prospect selection.
Any of you who read my articles know that selecting the companies you call on has always been a major focus of my sales management but it is even more critical now that segment I and low end segment II, if not inside of a larger account with multiple devices, is basically going away in that these companies are buying MFPs from big box retailers. It is also critical because as your company expands your product offerings you want to ensure that your customer base can buy what you sell. Some three-person company, besides being a user of some small MFP, is also not a prospect for MPS, MNS, or document management. Don’t waste your time with this customer.
Business development also has to change. The days of calling a company to ask “Who is in charge of your copiers?” are long over. With tools like LinkedIn, where you can build an organizational chart for just about any company in the U.S., a sales professional needs to conduct research and target the correct buying level in an account. That sales professional also needs to do research on how your company has helped other companies in the same industry. Ridiculous statements like “increasing billable hours” or general statements like “increasing productivity” aren’t going to get the attention of today’s educated buyer. You need to provide specific and measurable examples of how you help companies with their processes.
Today’s sales professional has to be very comfortable talking to a customer about business processes. “I can save you $15 a month does not come close to that discussion.” Understanding how a company uses paper in their processes will lead you in the right direction, but only if you have a decent understanding of business. If you’re talking to a specialty chemical company that ships their products worldwide I’d guess they have substantial paperwork that follows the shipments and needs to be retained for some extended period of time. If you were selling to sports medicine practice with multiple facilities in the geography there’s a chance that a patient does their physical therapy at one facility at nights or weekends but at another on their lunch break from work. How does the paperwork flow between the facilities and comply with HIPPA?
Are you researching the company before you make the first call and are you asking questions about their paper processes like the aforementioned examples? Between that research and asking the questions are you actually making an appointment at a level that knows a company’s business processes, such as a director or VP level? You have to do all three to be successful in today’s environment where senior managers and executives don’t have time to waste with an ill prepared sales person.
Now that you are asking the questions can you quantify the business case? This isn’t as easy as it seems and I’ll provide you with just one example from an account I was discussing with one of my clients recently. The sales professional was trying to get into a regional bank and I asked if the company had any other regional banks as customers, which they did. When I asked why they bought from us (my client) I was told we saved them money. That’s the usual answer and I gave my usual reply: “That’s not why they bought from you so tell me about the sales cycle.” This is almost a verbatim description:
We conducted and assessment and found out they were spending $3,100 per month. We also found out that they had a security issue in that their devices were storing confidential customer information on the hard drives. We were able to replace all of their copiers for $2,700, saving them $400 per month.
The manager and sales professional were both accomplished, intelligent individuals. Yet they thought that the customer bought from them because they saved them $400 per month. Banking being a highly regulated business what do you think the fine would be if it were discovered that confidential customer information was being stored on a non-secure device? If a leak made it onto the front page of the local business press how many customers would that bank have lost? If those two professionals really understood business they would have charged this bank more for their solution because they identified and closed that security leak. That business case could clearly have been quantified with a few levels of questions.
And for something to truly be a business case you have to be able to quantify the impact to the customer and I’d do that with the customer at the discovery or validation meeting. I used a few examples so far: The chemical company, the physical therapy offices and the bank.
The bank doesn’t take a lot of work to have that “cost” discussion around the security issue, in either fines or lost customers if it became public. With the chemical company I’d get into that paper flow in the export and import events. Had they ever had to wait to unload a ship—paying fees at the dock—because they didn’t have the correct paperwork? What was the process to get it to the ship? At the PT firm were they ever unable to do work on a patient because they didn’t have the paperwork? How frequently? What was the lost revenue?
With the chemical company and PT firm these are hypothetical examples but those are the types of questions I’d ask based on the type of businesses they are. When I put together my financial justification for the technology I am suggesting, in both of these cases that would include document management, I’d be able to quantify their current situation to justify the investment in DocuWare or some other document management solution.
To sell all of the products and services today’s “copier companies” offer the sales professional will need a structured and repeatable sales process. Bigger, better, faster, less money is dead. Focus on picking the correct prospects, identifying the buyers in those prospects using LinkedIn or other business social networks, use a business case to get the first appointment and on that appointment conduct a solid discovery that identifies a business case and then justify your recommendations based on the business case. Truly become a consultative sales professional.
