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Selling Value to Corporate Purchasing with Jennifer Kinson

Selling Value to Corporate Purchasing with Jennifer Kinson – 074

December 8, 2015 by Kirk Bowman Leave a Comment

Jennifer Kinson sells professional services to Fortune 100 customers in information technology. She typically manages 6- to 7-figure deals. Because of the size of the engagements, Jennifer has to put together ROI statements for her customers. She does not have a traditional sales background, and that works to her advantage. Her husband, James Kinson, is the host of The Cash Car Convert.

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Talking About Price Is NOT Slimey

  • What is the most important thing you can share about pricing?
    • Talking about pricing does not have to be uncomfortable.
    • It is about establishing the value of your product or service.
    • If you are not having that value conversation, you are not very credible.
    • Talking pricing is not unethical or slimy.
    • During her first 10 years of selling, she went through the entire sales process, disclosed the price at the end and then took the objections. It was not a comfortable situation.
    • Customers are looking at products and services because they already see value in them; these are not cold calls.
    • Sales is about customer service and solving problems.
    • The pricing discussion is about understanding how much value they see and what it is going to mean to them.
  • Why is a professional more valuable to an existing customer?
    • You are more valuable to your customer the longer you have been in a relationship with them.
    • A transactional customer relationship, where you engage and disengage, loses momentum.
    • Having a partnership with your customer gives you confidence that there is value in the relationship. The conversation is not about price.
    • Fortune 100 customers have purchasing departments that do not care about the value.
    • They are a disconnected organization, which takes each engagement down to the lowest common denominator.
    • When you can deliver value that no one else can because of your long-term relationship, your price can be higher.

The Mindset of Corporate Purchasing

  • How can you counter the typical mindset of corporate purchasing?
    • There is an organizational discord between the customer-facing people and the people in the back.
    • As a seller, by design, she is not going to be working from the same agenda as procurement, whose mission in life is to take cost out of a contract.
    • She does not like to provide a high price, knowing they will knock it down, as she negotiates in good faith with her business stakeholder.
    • She tells procurement that she has already worked with the stakeholders and has provided a good price for the value they need.
    • If they think that the business stakeholder missed something or a remix is needed, she will work with them.
    • You increase the cost to the stakeholders if you hire someone who does not do as good of a job.
    • If you have not internalized your value, then you are vulnerable to those kinds of arguments.
    • If you have done a good job, your stakeholder is prepared to be your advocate with procurement.
    • The stakeholder has to do his due diligence before procurement ever sees the proposal.
    • Procurement's tactic is to say to competitors, “This is the business outcome I need – can you do it for less?”
    • You are exposed to these tactics if you have not worked with your stakeholder throughout the process to make them understand why you are uniquely qualified for that project.
    • You must be able to explain that you are not only providing the value required but that you are eliminating risk.
    • Some procurement people come with a win-win approach; others approach it as a boxing match.
    • Procurement is a reflection of the company culture.
    • Financial consulting and professional service firms have a better grasp of assigning value to risk than manufacturing companies.
    • You have to prioritize the procurement battles you are going to fight, due to high demand and limited resources.
    • Careers and livelihoods are at stake – there is a right way to do it and a cheap way to do it.
    •  Your poker skills are not what you want to bring to the negotiation table.
  • Can you sell on value to corporate procurement?
    • You can, as a qualified yes.
    • It depends on the corporate culture.
    • If you are just talking to procurement, your odds of having a value conversation is lower.
    • If you are at a strategic level and you are actively working with the stakeholder and they bring procurement in as a partner, you are more likely to have a value conversation.
    • You have to be judicious about involving procurement earlier in the conversation.
    • Keeping your business stakeholder in the conversation is more beneficial than bringing procurement in early.
    • In one situation, by working with procurement early, she was able to a structure to fit their business and win the proposal.
    • They helped her re-architect and reframe the deal to something that worked for her team and theirs.
    • Positioning yourself as a partner is the best way to work with procurement, but it is very nuanced to each company.
    • It is relationship-driven. Navigating the corporate politics of each organization requires a champion or sponsor to help you with procurement.
    • The sponsors are usually executives, but not always. They are always key influencers.
    • You have to put effort into the relationship to earn the sponsor's trust before you engage procurement.

Creating ROI Statements

  • How do you create an ROI statement for a customer?
    • If you are selling to a business, whether you are stating the ROI or not, the case is being made.
    • Your stakeholder is going to have to justify why he wants that product or service.
    • The need has a value associated with it, and your product or service has a price associated with it.
    • By doing the math and including the long-term value, you can set up a slam dunk.
    • Work with the stakeholder to determine the value and include it in each piece of documentation you send.
    • It takes an investment of time to get the data together; otherwise, you are taking it on faith that the stakeholder will handle it.
    • You have to help them understand what the value is to go beyond the cost mentality of “the budget.”
    • Understand the way your customer perceives the offer you bring to the table, especially if you are creating new value.
    • Salespeople have to be experts at discovering and explaining value.
    • To operate as a partner, you have to be able to align to the risks and the business initiative.
    • If a customer is trying to solve a strategic problem with a tactical discussion, you can hand it off to someone else.
  • What is one of your best stories about creating value for a customer?
    • In working with a customer who is re-engineering how they interface with their customers, every percent she increases their efficiency saves them $50 million.
    • The value associated has a direct correlation to the number of jobs they can maintain and value they can bring to their shareholders.

About Jennifer

  • LinkedIn: linkedin.com/in/jenniferkinson
  • Twitter: @jenniferkinson

Filed Under: Episodes, Software Tagged With: Positioning, Sales, Value conversation

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