“It’s important to always consider your product or service and how that relates to your customer’s profile.” – Mark Schenkius in today’s Tip 335
What if you’ve never met the buyer before or some of you cannot connect with them before the first meeting?
Join the conversation below and get a copy of Mark’s book “The Other Side of Sales”.
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Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. This may not sound quite right because I’m on the road in Minneapolis and left my microphone back in Austin, but the show must go on. Today Mark Schenkius is back. Mark is the founder of ROI 10 where he helps sales professionals get better at dealing with buyers, and he’s also the author of “The Other Side of Sales”, where he shares his perspective after 15 years in procurement. Here he is with today’s tip:
Mark Schenkius: In DailySales.Tips/303, I talked about two questions to raise when you’re talking to a buyer to understand their perspective and their business priorities. These two questions are:
1. What are the objectives of your business this year? Encouraging the buyer to think bigger than their own area of responsibility.
2. What can I do to support you in achieving these objectives, which helps to create a climate of trust and understanding?
Now, some people ask me, what if you’ve never met the buyer before or some of you cannot connect with them before the first meeting? Is there a way of finding out what their priorities are? Well, that’s a very valid question. It must be stated that asking firsthand questions is always better. However, there is a tool that I would recommend to use in these kinds of situations. The tool is called the BCG Matrix. It was developed by the Boston consulting group back in the 1970s and it continues to be one of the most popular tools for portfolio analysis. It’s a four-box grid and on the vertical axis of the matrix, you’ll find market growth rate, which explains the growth of the current market within the industry.
For example, the solar panel or winter by industry has high levels of growth, whereas the paper product industry is showing slow growth levels mainly due to digitalization. The horizontal axis shows the relative market share, which determines to a competitive position over an organization within the industry. Apple, for example, has a high market share in the smartphone industry, whereas any typical startup business could be considered to have a low market share. Combined there are four different stages in the BCG Matrix. I’ll explain them all and tell you what the procurement strategy is for each of them.
The first box is called Question Mark. Here you’ll have low market share and high market growth. This is typically the start of the life cycle for most businesses. Buyers are expected to support a company’s growth ambitions. Hence the focus will be on anything that will help grow, develop, market share and turn a product or service into a star. Suppliers will be selected based on innovation capabilities and willingness to a partnership. Your role as a sales professional is to help them be successful.
The second box is called Star. Here companies will have a high market share and high market growth. This means there is a make happen mentality. Buyers would seek partnerships with reliable suppliers and as a sales professional, your focus should be on securing supply and quality. Price is less of an issue here.
The third box is called Cash Cow. Here companies will have a high market share and low market growth. This is where they would like to maximize their profits so they can invest the freed-up cash in question marks or stars. This means buyers are focused on cost reductions. You’ll find that these companies will be running tenders and doing other cost-cutting exercises.
The fourth or final box is called Dog. This is usually the end of the life cycle. Ray will have a low market share and there is low market growth. The only way to stay in the market is by being a price leader. This means buyers will be focused on price reductions. As a sales professional, you can expect tough negotiations here.
An important final comment to make is that a company can have multiple products in different stages of the BCG Matrix. This means there is no one size fiddle approach with regards to how procurement approaches the market. However, it’s important to always consider your product or service and how that relates to your customer’s profile.
Scott Ingram: Mark’s goal is to help you to win more business by understanding professional buyers better, and once again Mark is generously offering 3 copies of his book: “The Other Side of Sales” to Daily Sales Tips listeners. If you’d like a copy of Mark’s book and haven’t claimed another book in the last 60 days. Just send me an email at [email protected] with the subject line: Mark Schenkius’ book. To win you must also be on the listener list which you can join from DailySales.Tips/335 where you’ll also find links to RIO 10 and Mark’s LinkedIn profile so you can connect with him.
Thanks for listening and be sure to come back tomorrow for another great sales tip!