Improving the Odds on One and it s Done

Improving the Odds on "One and it's Done"

You can improve the odds on achieving "one and it's done" partnering efficiency—the Six Sigma of Consultative Selling—by taking two factors into account before you commit to a PIP's creation:

  • The customer manager's actual and potential "What elses?"

  • The manager's actual and potential "Why Nots?"

As your partnerships mature, what elses and why nots become easier for you to know, either experientially because you are exposed to them in the course of your relationships or intuitively based on knowing your partners. At the outset of new relationships, however, you may have to ask; unasked or unanswered, you may have to reason your way to go-no go decisions about PIPping.

Assaying the "what elses" means learning the customer managers' investment options, the claims that the managers, their top managers, or suppliers of competitive options may have made on the funds you would like to stake out for yourself. Rival claims come from three main sources:

  1. A mandate from upstairs that freezes funds for a use that top management regards as critical to the success of the business. This may entail a performance improvement in the direction of best practices, an acquisition to fill a gap in a product line, or a reallocation of resources to beef up services at the expense of products.

  2. A priority that gets funded first because it is a hotter button than your hot button. This may be a personal quest on the part of a manager that makes equal subjective as well as economic sense. Or it may be an investment that a manager must make to safeguard a previously funded initiative, such as an upgrading renovation or repair.

  3. A better offer that has a more compelling return in terms of its muchness, soonness, or sureness. Such an offer does not need to be directly competitive with your own proposition in either its application or choice of operational function. It needs only to challenge for similar funds at a similar level of risk in order to be competitive.

Assaying the "why nots" means learning customer managers' investment constraints that are outside their priorities and hurdle rates. Constraints, most of which are self-imposed, come from two main sources:

  1. A lack of sufficient sureness to proceed. Uncertainty may come from concern that your proposed profit improvement is too small to be worthwhile or too large to be credible. This constraint may be overcome by guaranteeing the proposed results and reducing up-front cost as much as possible by gainsharing.

  2. A heightened sense of risk. Commitment may be inhibited by concern that exposure to forfeiture of principal is too high or that a protracted delay in its recovery is a signal of eventual forfeiture. This constraint may be overcome by reducing the time to payback, either by cutting back on the amount of funds invested in year zero or accelerating the flow of benefits.

Fast closing your PIPs the first time every time is essential to maximizing the net present value of the technology that enables their outcomes. It is therefore directly related to the margins you can claim in return for the value you add. PIPs that encounter delay add to their cost of sale and to your customers' cost of acquisition. Similarly, PIPs that end up as scrap incur opportunity cost for both of you. This gives sellers and customers alike a vested interest in maintaining a "one and it's done" turnover schedule.

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 © 2008-2017.
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