Proactive Vs. Reactive

The sales professional in today’s marketplace has more expectations thrust upon him by his customers than ever before.  In fact, most salespeople don’t understand this simple fact!  Instead of rising to the occasion and providing the value that their prospects, customers, and clients seek, they instead choose to do nothingdifferently and opt to lower price to get the business.  As my son Cooper often says, “What are you thinking?  Hellooooo?”

There is a major difference between the Reactive salesperson and the Proactive sales professional. Each person gets up each day with the same opportunity, the same challenge:  to enter the marketplace as a value-add component to the customer and to help that customer choose to buy (or to continue to buy) from them!  In today’s uncertain economic environment with rapid change and consistent inconsistencies in the buyer’s world, it is absolutely necessary to avoid the trapthat the Reactive approach will too often set for you!  Simply showing up to do your job no longer is enough!  Taking the order and delivering as promised is simply not enough anymore.  In fact, low pricing and quality products alone don’t even guarantee you the order anymore.

In speaking with a current Foodservice client of mine recently, I found myself addressing an issue that several of his team members were facing—a severe increase in the price sensitivity and focus on the part of the customer.

Some background info: The salespeople on his team are selling into the restaurant environment as “route salespeople” taking grocery orders weekly from owners and managers. Regularly these customers take calls from salespeople from competing companies that carry the same lines and often the same brands of products.  Left to their own thoughts, the customer will feel that many of the products (and thus those who sell them) are commodities!

The reason for the increase in price sensitivity (even nominal price fluctuations) is quite simple. The restaurant owner in today’s market is in the middle of a perfect storm.  They are seeing higher food prices than ever before.  They are facing additional fuel surcharges from the Foodservice Distributor due to out-of-control oil pricing.  They are seeing customer counts shrinking due to a lack of consumer confidence based upon current economic uncertainty in the financial markets, real estate markets, fuel prices, food prices, etc.  So, in a nutshell, they pay more, sell less, and see no end in sight.  The natural thing for them to do is to analyze where they need to cut back and guess who is naturally first in line?  The vendor that they pay the most—the grocery guy!

As an exercise, I suggested that we analyze the feedback from a sample customer—ABC Café.  This particular restaurant owner has stated that their business is “a bit off” with 3-4 fewer tables being served at lunch and 3-4 fewer tables being served at dinner on average each day.  With an average table at lunch producing $30 in revenue and an average table at dinner producing $50, a rough estimate over a month shows a decrease in about $8,500 in revenues.  That translates to about $100,000 per year in revenues!  That is often then entire take-home pay of the restaurant owner!

This needs to be addressed—PROACTIVELY—by the sales rep if they choose to keep the account and develop the relationship!

Think about this for a moment.  What the customer is saying to you is not as important as what they are saying when you are not around that can and will affect you!  Put on the customer’s “hat” for a moment.  What do you think the topics of conversations might be for him/her with their spouse at home at night?  What decisions do you think they might be weighing?

  • “Do we pay the rent on the restaurant OR the mortgage on our home this month?”
  • “How do we tell our son/daughter that we cannot pay to send them to college this year?”
  • “How much longer can we stay open?”
  • “Will our car get repossessed?”
  • “Maybe one of us needs to get another job to help support the family?”
  • “Who do we need to let goto cut back costs?”
  • “Where else can we cut?”

Every one of these questions is a point of considerable pain that started with just a few less customers per day.  Although it looks small, as you can see, it is not!

It has been my experience that the overwhelming majority of salespeople that have customers facing tight economic times simply choose to de-emphasize it and try to focus on what’s next.  In other words, “I know times are slow for you now but I still need to sell you something so listen up!”

Understand this, very few customers wake up in the morning and get excited about buying what it is that you are selling!  This falls true especially for business customers versus actual consumers.  For example, the restaurant owner didn’t open his doors today to buy groceries!  However, he did open his doors with the intention to make a profit sellingmeals!  He does this by creating a quality product, with over-the-top service, at a price that includes a solid profit margin—and he has to do that many times over each day!  Do you think that most salespeople are having conversations with the restaurant owner about buying more or selling better?   

The retail shop that opened his doors this morning didn’t do so to buy advertising!  He opened his doors to make a profit sellinghis product.  In order to so consistently, he needs customers and for that he needs visibility and differentiation.

The manufacturer doesn’t want to buy your machine parts!  They want to ensure (peace of mind) that their machines stay operational and running at capacity to stay productive and profitable!

When times are tough, each of these buyers looks to the vendors calling upon them. The conversations often come out as price objections and “nickel and dime” conversations.  Now is NOT the time for negotiation tactics or closing tricks!  Now is the time for strong, prepared PARTNER conversations.  Now is the time for YOU to proactively address the main financial concerns of the customer and really DIG/DIAGNOSE where it is that you and your company can help them to do a better job.

The natural human tendency is to assume that “If I spend less, I get to make more!”  Sellers face this very thought process every day and most tend to address it with mundane feature sellingby stating things like Quality-Service-Reliability, blah, blah, blah. It is obvious that higher quality should translate into a better product, but if you cannot connect the dotsfrom your higher quality, better products to their main goal (for example: PROFIT), then your product’s quality is not a desire!

So, here is a great drill for you and your team to get into over the next few weeks:

  • Have some internal conversations within your sales organization with the customer’s business the main topic. Engage the entire sales and service team to bring to the tablethe customer’s point of view.  What are you seeing?  What are you hearing?  What are they saying?  What might they be feeling?  What’s the word on the street?  Is business up?  Down? Why?  How can we help?
  • Set a specific meeting with your Top 10 customers with the specific intention to do a review of their business-with you and otherwise.
  • Steer the conversation during this meeting specifically to the current state of affairs financially.
  • Ask specifically how the current markets (fuel, interest rates, housing markets, etc.) are affecting their sales and their profits.
  • As them what, if any, tough decisions might be on the immediate horizon for them or their company. (Layoffs, cutbacks, closures, product line cancellations, etc.)
  • Ask them how their competitive marketplace looks.  What is their competition doing that they are not or cannot?  What are they doing about this?
  • Ask them what it is that they value most from the current relationship that they have with you as a preferred vendor/partner?
  • Ask them what you could do better to assist them in the profitable growth of their business?

***This is important:  Listen to what they say—with the intent to Understand! Listen to what they say with intent to Add Value!

In advance:

Make sure that you carefully prepare your questions.  Your questions should help you uncover pains and fears that you and your company may be able to assist them with. (Many of these may have absolutely nothing to do with your products but will have everything to do with your value!) Make sure that you are prepared for any and allthings to come up. Don’t get caught off guard!  If negative things so come up—and, done properly, they probably will, do not get defensive! (Remember, you asked for it!) Make sure that you are prepared to take notes.  Make sure that you come to some solid action steps as a result of the conversation—and DON’T DROP THE BALL!!

The very fact that you are willing to address what is going on in their business should differentiate you and your firm.  The very fact that you are willing to sit down and analyze their current business status should elevate you from “one of” the many vendors to “the” value-add partner.  Zig Ziglar said years ago, “They don’t care how much you know until they know how much you care!”  Show them that you care more than the competition by having the GUTS to bring up their issues.

It doesn’t matter what business you are in.  Your customer is faced with challenges and choices every day.  Whether YOU bring it up or not, the issues and challenges brought upon by the current economic marketplace are still there!  Would you rather bring it up on yourtermsor have them bring it up on their terms? One may position you as a partner/advisor/expert and the other could very well position you as a victim.  Your choice—Proactive or Reactive?