Positioning Profit Projects


A PIP is a profit project. Its site is customers' premises, either one of their business lines or a business function. A PIP is a money-making project. It says to the customers, "Here is where you are incurring unnecessary costs or missing out on realizable revenues. Here is what it is costing you. Here is how much you can save or earn. Here is what it will take to obtain the improvement and how long it will be before you can see it on your bottom line."

PIPs are designed to affect customers' economies. To do this, they require adding the value of a supplier's products or services along with information in the form of advisory services and training. Sometimes financing is involved as time payments or a lease. But the essential ingredient in every project is its manager.

Positioning a profit-improvement project is a consultative seller's prime skill. This requires sellers to be good diagnosticians, making sure they have sized up the project correctly from the outset. The sellers must then be good prescribers in order to propose the most cost-effective solution for the problem or opportunity they have diagnosed. Then they must be good installers, implementers, and appliers to fit the solution seamlessly into customers' operations so that it becomes a part of their natural flow. They must be good planners, exactly meeting each milestone along the way from startup through payback to realization of the proposal's objective. And at every step of the way, they must be good partners with their customers' people, without whose cooperation they can accomplish nothing.

Customers who are being PIPped must perceive that they are being invited to invest in the improvement of the contributions their operations make to their profits—not that they are being asked to buy the consultative seller's products, services, or systems. They have no vested interest in the seller's products. Their only interest is in the assets that they already own and how to improve their contributions.

A project in profit improvement begins when customers close the sellers' proposal. The project ends not with the one-time delivery of products and services but with the on-time delivery of improved customer profits. In between, the sellers must manage the flow of work. Even more important, they must manage the flow of new profits.

The ability to diagnose heretofore unsolved customer problems in such a way that they can now be solved is an enviable asset for a project manager. So is the ability to conceive a simplistic solution that, for the first time, enables a customer problem or opportunity to be dealt with cost-effectively. But the greatest ability is dependability. Can the project manager be depended on to control the project, to keep it from getting out of hand, to pick up deviations quickly and remedy them at once, to avoid cost overruns, and to be free of surprises? If the answers are either no or, even worse, sometimes, no amount of creativity or simplistic problem solving can atone for the absence of reliability.

No two consultative sellers have the same intellectual capital or employ their capital in the same way. Given identical customer operations, customer objectives, and commodity products and services, one consultative seller will always propose what a customer regards as the single best solution—the most cost-effective way of solving a problem or realizing an opportunity. How can you become the proposer of the winning PIP and, consequently, the manager of the winning project?

The secret of Consultative Selling success is your personal ability to come up with an optimal mix of muchness, soonness, and sureness of benefits for each PIP. In other words, how much better than the next consultative seller is your intellectual capital when you apply it to bring together your technology smarts with your process smarts about a customer's operations?

The value basis for Consultative Selling can be summed up in a single sentence: Consultative sellers are in the business of selling a dollar's worth of value for 50 or 60 cents on the dollar.

This is more than any vendor can get for selling a dollar's worth of cost.

Selling dollars is crucial because no one can make margin on products anymore. Yotaro Suzuki of the Japan Institute of Office Automation asks, "How do you assign prices in a world where quality is perfect?" Hiroshi Yamauchi of Nintendo concludes that "there is no way to charge a premium on hardware." In the United States, the most common assessment of suppliers by their customers is, "They make a great machine. So what?"




Consultative Selling(c) The Hanan Formula for High-Margin Sales at High Levels
Consultative Selling: The Hanan Formula for High-Margin Sales at High Levels
ISBN: 081447215X
EAN: 2147483647
Year: 2003
Pages: 105
Authors: Mack Hanan

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