The process of developing a winning strategy when it comes to selling capital equipment involves logic and intuition. In order to achieve a high level of success it is important to have a step-by-step strategy based on past success as well as a focus on the “soft” points of the sales process. The step-by-step process is the logic and the intuition is all about the soft points. These soft points are noted in the article to follow along with a description of the steps necessary to increase your closing percentage.

This soft side of sales involves an ability to understand a customer’s emotional state without being told about it by the customer. It is really a relational part of the agent’s job and it evolves from an ability to “read” the customer, that is, to an ability to discern exactly what the customer is not saying.

During the sales process the agent must always be testing the waters to make sure that where you think you are in the process is truly where you are in the process. It is easy to not ask the tough questions and hope for success but that is not a winning strategy. A winning strategy is one that is prepared to ask the tough questions and change directions at a moment’s notice as a result of new information regarding the process. “Rigid” is never a word that should be used to describe your selling strategy because rigid conflicts completely with your goal — to provide a solution to the customer that the customer has a vested interest in and ultimately will buy.

Importance of Relationships

Perhaps one of the starting points to consider when examining capital sales is that of the importance of relationships between the agent and his customer. To develop and strengthen a relationship it’s incumbent for the agent to develop a “champion” within the customer’s organization and to always strive to bring value to the relationship.

Part of accomplishing both of these goals is to make a concerted effort to network with as many customer contacts as possible and ultimately to have fun when conducting business.

The fact is people enjoy being around individuals that make them smile and feel good about themselves. We must work hard to maintain a positive attitude, to become good storytellers and always to have something good to say. It is equally important to avoid negative communication at all costs.

I am reminded of an article I read about “improv.” This skill was brought to us with the television show Whose Line is it Anyway. The key to success in improv is going with the thread. Studies have shown that improv works only when the participants say “yes”; when they say “no” the thread dies out almost immediately without exception. If you want to keep a conversation going with your customer — or your spouse for that matter — find ways to say “yes” or you will be a conversation killer. We want everyone to be a fan of our company.

To achieve that goal we want to know everyone at the company:

• First, positive sentiment toward a company resonates and is vital to securing “all” the business.
• And, second, you can never know enough people.

Top-down selling only works if you know people at the top. The process really begins with knowing one person but it is paramount that long-term you know everyone from the janitor to the president. That janitor might be the CEO someday. Everyone matters and if you want to be wildly successful in sales you’d better act accordingly.

Communication

As important as relationships are to securing capital equipment projects, just as important is the skill of communicating with customer decision makers. Included in the communication process is everything from face-to-face, phone and e-mail. All of these are key tools. The agent should never be shy in his follow-up efforts. If necessary, apologize for frequent calls but remind the customer that it is your job — that’s why you’re there. Never be embarrassed about performing your job!

Let me add that I believe my customers enjoy hearing from me. Do you resent getting calls from people you enjoy speaking with? Also, it doesn’t have to be a phone call. We send technical e-mails that discuss how to troubleshoot our products or discuss the latest technologies offered in the market.

We want to be present, but not annoying. It is a balancing act, but if our customer likes us because we bring value to the relationship, they don’t mind the effort. When they answer the phone after six messages have been left and begin by apologizing for not calling back — our job is to ease their mind. We say “Hey, Mr. Customer, I get paid to call you, not for you to call me back. Ease their guilt and always keep it light. Our motto: “Always be adding value.”

Two additional aspects of the communication effort are meeting minutes and lunch/dinner/special events.

I have never found an easier way to differentiate my agency from the competition than the use of meeting minutes. After each customer meeting put together a list of all points of discussion in a clear outline format. Highlight the action items and who is responsible for what actions. During the next visit review these minutes and add to them after the additional discussion. This has proven to be an amazing sales tool for me.

It is also important to make time to get to know your customer outside of the formal working environment. This can comfortably be accomplished via meals or special events. Your customer will be much more committed to you if they truly know you and you know them. It is the best part of our job. People are generally good — and you can never know enough good people!

Technical Input

After securing relationships and ensuring regular communication with the customer, it’s imperative to get the input on the technical aspects of a project from as many of the decision makers as possible. Once done, this step will secure their ownership of the solution to the problem that you contributed. Once consulted, they have a feeling that they made a contribution to the quoted solution.

Conversely, if the customer has explained that they do not like, for example, a palletized system, but would consider a precision-link system, don’t even consider another method — no matter how it fits. It won’t sell and the agent is wasting their time if they pursue. Swim downstream or be willing to walk away.

At the same time, make sure there is a complete understanding of what type of equipment the customer currently has, understand their budget, what they can afford, and align your solution accordingly.

Effective communication is absolutely paramount to short- and long-term success. My people get tired of hearing me harp about the importance of communication. I say don’t send an e-mail — I say “Get in the car” or “Pick up the phone.”

Commercial Considerations

It is critical to understand the commercial considerations as early in the quoting phase as possible. The better you understand the customer’s purchasing methods the more prepared you will be and your proposal will reflect that preparation. Among those questions:

• Is there a buyer involved in the decision making process for the capital buy? The answer to this question will prompt you to dig deeper if it is a “yes.” You need to understand how the buying process works. Does the buyer expect two percent or 10 percent? If you are dealing with engineering only, you will likely not need to implement a reserve.
• Have you dealt with this customer in the past? History nearly always dictates the future. Were you successful in winning the business? If so, repeat your previous efforts minus the mistakes and everyone wins. Understanding and learning from your past experience will allow you an opportunity to implement a strategy for win-win negotiations.
• When do they really need the equipment to be delivered? Understanding this key item will allow you to apply the appropriate delivery strategy. Would they like to have the equipment delivered sooner rather than later if our capacity allowed it? If our capacity is running low can we extend the delivery without compromising winning the business? Will providing a Microsoft Project timeline differentiate or enhance our chances of winning the business. Make certain that the delivery you offer in the timeline is viable. What is the competition’s delivery?
• What is the budget for the equipment? Can they afford the equipment they are requesting? What is the appropriate pricing strategy?
• What are the long-term prospects for this customer? If you have made it this far and the budget is questionable, you need to understand the long-term prospects for this customer. Keep in mind that this is a very dangerous proposition as filtering out/making judgments based on what you see is no prediction of the future. However, in times where quoting activity is high and capacity is limited, you must be prepared to cull out the prospects that are less attractive. This is prudent for time management and overall company efficiency.
• Does this prospective customer value relationships with its suppliers? Understanding the answer to this question will help determine the negotiation strategy and will also influence the culling process.

Follow Up

Once questions are asked/answered and the quote prepared, it should be presented in person with the proposal’s engineer if at all possible. This allows the agent to see firsthand the customer’s reaction and understand the next steps to the decision process.

Technical and commercial concerns that evolve should be addressed within a day or two of the presentation. Your quote should always reflect the customer’s vision. Moving quickly to address concerns lets them know you are serious and professional. If you can’t address them immediately, advise the customer of your expected delivery date and verify that you will be addressing all of the concerns.

Constantly monitor all the steps in the decision-making process. Know who is doing what and when. It remains imperative that you check the water frequently to alter course as required. If you aren’t asking the questions, you will not have an opportunity to turn things around until it is too late.

Monitoring the process and asking questions are major steps in allowing you to become emotionally engaged with your customer. This emotional involvement allows you to understand when the strategy is moving off course. This is a soft point and difficult to obtain, but it is ultimately about achieving a level of trust between yourself and the customer.

Closing the Sale

As the capital equipment sales process nears its conclusion, some additional questions should be addressed:

• Does our technical solution meet all of your expectations?
• Do you or any of your team members have any concerns about our technical solution? If so, what are they?
• Are there any commercial items that need to be addressed?
• Where are you in the decision-making process?
• Are we in a preferred position on this application?
• What do we need to do to move this application forward?

It’s important that the representative has identified early on in the exploration phase what the negotiation process will be like. This should have allowed you to prepare company management for the negotiation process. Your goal should be that there are no surprises during this phase.

It will sometimes be necessary for you to be at the customer’s facility at this critical time. Find a reason beyond the project to be there. Maybe you are there for another principal or there just to take the folks out to lunch. Whatever the case if you need to be there make the scheduling adjustments necessary to be present. You have made a significant contribution of your time and the company’s resources. The closing is the time to put the heat on, not sit back and pray.

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Revenue = Effort

Independent manufacturers’ representatives involved in capital equipment sales are cognizant of the fact it’s necessary to “fill the pipeline” with a number of projects in order to ensure regular compensation. Equally important is the need to build into the process the potential for receiving partial payments from the principal during the course of the project.

When I began in the capital equipment process, it was described to me as a “popcorn popper.” Some kernels will pop at different times and in order to maximize revenue, it is imperative to keep the popcorn popper filled with kernels.

To accomplish that goal, while we use a quote-tracking spreadsheet at our company, some companies use a CRM. Regardless of how it is tracked, it should be reviewed weekly if not daily. Also we should be asking ourselves what other products could I be offering to this customer?

After I have an established relationship with a customer, I will ask them what products they are currently purchasing that they are not satisfied with. In some cases we will pursue a product line accordingly. It pays to be opportunistic and always be asking questions. Be curious.

I maintain that it is critical to cash flow and also good for the relationship to require periodic payments from the principal during the course of the capital equipment process. It is good for the relationship because all parties are compensated according to the efforts/progress. Resentment builds if partial payments are not a part of the structure of the deal.

What follows are what I have identified as the critical phases of a capital equipment sales process.

The Critical Phases of a Capital Equipment Project

• Exploration Phase

This involves the initial inquiry. Your involvement in this phase is critical. You present the principal to the customer and begin the value-adding process. Make sure you have a great story to tell. This begins by believing in your product and presenting it accordingly. Regular review of the material and practice are important to staying sharp. Don’t be lazy in this phase because you are building the foundation for all other efforts with this project.

• Evolution Phase

Here is where you ask questions. You must thoroughly understand the need and desired outcome before a solution can be offered. Where is their pain? What is it costing them? This is where the solution evolves through understanding.

• Solution Phase

During this phase you present options. This is how you get the customer committed to your solution — make it theirs. You make it their solution by presenting the outlines for multiple solutions and letting them tell you what they want. I have not met a customer yet who will not buy his or her own solution. This strategy works!

• Differentiation Phase

Experience, schedules, 3D models, graphical presentations, project pictures, references are all part of the differentiation phase. Clear and concise notes presented immediately after every substantial meeting will differentiate your company from the others. This strategy works!

• Change/Tweaking Phase

Always be asking questions. Is there anything that prevents you, Mr. Customer, from moving forward with us? We want to get a “soft” “yes” along the way. Have we provided all the necessary documentation for you? Have you talked with our references? Continue to identify any and all potential objections and adjust your proposal accordingly. This takes patient persistence.

• Decision Phase

This occurs when you know there is a decision day. Make plans to be there on that day. Take them to lunch. Visit another customer in the same company. Showing up is half the battle and showing up on decision day can make all the difference! When your engineer says we have selected your company and now it is in purchasing’s hands, you have won. Getting to “yes” is the key. The numbers will take care of themselves.

• Closing Phase

Commercial items will need your effort to quickly resolve and move the PO to acceptance. Sometimes this involves commercial negotiations. Remain positive throughout this process. It is the buyer’s job to make you miserable, so don’t let them. Never take it personally. You have won with engineering now it is just a matter of coming to terms. This is no problem if you focus on the solution and not the issue.

• Follow-Up Phase

A handwritten thank-you is mandatory. Document the key milestones in your calendar so that you can inquire as to the progress. This is also a good way of reminding you to check in with the customer regarding their level of satisfaction. This is one of the most important phases of the project for long-term relationships and multiple orders. This is where the loyalty is created. During design review visits and runoffs you will be able to spend countless hours with your customer. This is the time to invest in them, so don’t miss it.

• Maintenance Phase

You need to be around even though there is not a project. Quarterly inquiries are generally sufficient. Just let the customer know that you have not forgotten about them. If there is any other marketing activity that will help you stay in touch use it. We send monthly postcards with technical articles on them as a strategy. We also send a technical newsletter tailored to our target audience every other month. It isn’t easy but it works. Find a reason for them to remember you and the products you offer or the next person in the door with a similar offering will win the day.