Selling high value capital speculation services and products to customers is becoming increasingly popular as a sales training subject.
Making capital investment and high tech purchase decision present two significant problems for your customers:
The technologies on offer differ widely. Their development is uncertain and often in fits and starts.
A change between two alternative technologies is, as a rule, associated with high costs.
Which potential suppliers are taken into consideration in the purchasing decision and how the customers then finally decide depend above all on these two factors.
Over 400 managerial staff from diverse high tech areas completed a survey and the following results were determind:
The faster the pace of technological change and the more numerous the technological solutions, the more suppliers will be weighed up by customers. Both factors make the customers uncertain.
Over a four year period the price – performance relationship of selected technology product improved by 2000%. Your customer is therefore constantly searching for the newest, best and most ideal solution for their installation.
Even if your customers draw on many suppliers because of the high speed of technological change and a great variety of technological solutions, as the previous supplier you have a very good chance of success. Therefore managing existing customers is an important skill and is covered on good account management sales training courses. Each piece of information that your customer receives today can already be out of date by tomorrow. A new supplier who seems ideal today can be out of the picture tomorrow. In these circumstances your customers have huge difficulty in forming an objective judgment. Therefore they very frequently decide according to the motto “at least you know where you are with that!”
The less experience your customers have with their products, the more suppliers they will compare. In this situation your chances as existing supplier of holding onto the contract, immediately decrease. Before making a new purchasing decision, a customer will compensate for lack of information by an intensive search for information. This kind of customer is more readily convinced by a new supplier than one who already possesses a certain wealth of experience, since, as a rule, these people do not have the option to objectively assess what a new supplier says.
The more intensively your customers concern themselves with the compatibility of a new acquisition with their existing installation and the higher the costs of changing supplier are, the fewer the suppliers they will take into account. Even if the competition is offering attractive alternatives, you, as the old supplier, have a very good chance of getting the contract. Worries about compatibility and costs of changing supplier are caused by high levels of investment in the existing installation and also the desire to work with trusted equipment.
Your customers will check out more suppliers, the more important the purchasing decision. That is the case when an investment leads to comparatively high running costs and / or is intended to secure a competitive advantage for your customer.
The more rigidly formalised your customers’ purchasing decision process is, the fewer suppliers they will take into account. Even if a competitor shows them an interesting offer your chances of getting the contract are fairly good. Fixed rules and procedures hinder the free collection of information from the whole market. The employees in the customer’s business who take part in the purchasing decision act as controls on each other and therefore fear nothing more than making the wrong decision. The existing supplier with whom good experiences have already been made, possess crucial advantages in this situation.
The more the purchasing decision is centralised within the customer’s business the greater number of suppliers are considered and the lower your chances are of achieving the contract. Centralisation always means that few managers have the authority to make the decision of purchasing.
As a rule they have little or no experience of your products and make their decisions principally on the basis of bare cost – performance perspectives. As the existing supplier your good reputation plays less of an important role.
Commercial people are taking an increasingly more important role in purchase decisions. Any successful capital investment sale must have a sound financial justification. To develop your skills further in order to enhance your performance, attend a good sales training course.
Richard Stone a Director for Spearhead Training Ltd that runs management and sales training programmes aimed at improving business performance.