Sales - Know thy customer

"The secret of success is to know something nobody else knows" - Aristotle Onassis

In my previous blog titled "Sales - Knowledge is strength" , I had written about why it is important to know about financial information of the prospective customer. In addition to financial information, a salesman need to know several other pieces of information about the prospect. In this article, I will write about the other types of information a salesman needs to know in order to close a deal.

In my current firm, information about the customer is collected in an organized way - called as Target Account Selling Form or TAS form in short. The exact details contained in the TAS form is confidential - so I won’t write it here. Instead I will tell you the kind of information that can be collected as Business Intelligence - and is vital in closing a deal.

Financial Information

Financial information about the prospect is the single most important information one needs to know. When selling a complex service or a product, you cannot win unless you can relate your product or service to the ROI or ROA or other specific, measurable financial terms of your prospect. You have to connect your product/service to the bottom line or top line or ROI or ROA or any other measurable financial results of your prospect.

General Information

Other than the financial information, there is a whole lot of general information that a salesman needs to know. This information falls into three broad categories:

1. Information about the prospect’s Industry
2. Information about the prospect’s company
3. Information about the decision maker(s) at the prospect company

Gathering this general information is time consuming and difficult. In most well managed firms, this information gathering activity is done by marketing department - under business intelligence function. Few firms have well defined offices of business intelligence.

Initially getting information about a prospect will be tough & daunting, but with practice a salesman will learn. Also many a good salesmen will build a network with other salesmen in other companies - and then use this network to gather information.

Knowing more about a prospect will help the salesman to better scrutinize the prospect, and give him/her the confidence to talk and hold the conversation with the customer.

(For those who are new to sales or marketing try collecting the general information of your own company. Collect the industry details, company details - growth, market share, profit margins, EPS, etc.. Also collect the names of all executives & if possible their interests and hobbies. Doing this exercise will help you understand the importance of information gathering)

Industry Information

Every successful salesman will be able to talk about great length on the industry he/she is selling into. For example, a EAI tool vendor salesman will be able to talk about IT consulting industry. TI salesman selling DSP chips will be able to talk about cell phone industry, etc..

Industry information consists of several segments:

• History of the industry
  
• Trends in the Industry - Market size, technology, etc.
  
• Current market leaders & challengers in that industry
  
• What made the leaders successful in that industry
  
• Who are the key persons who made an impact in that industry

This information can be gathered over time by reading trade magazines, analysts reports, research reports from Gartners, Dun & Bradstreet etc.. Most salesmen will subscribe to one or more trade magazines and know all about the latest happenings in that industry.

For example, a successful salesman selling IT services to Telecom industry should know about the latest technology trends such as VoIP over WiMax, Fiber to Home, IP television etc.. He/She should also know the history of telephone, life & achievements of Alexander Graham Bell, latest product lines from Lucent, Nortel, Alcatel, Cisco etc..

I agree that collecting & knowing all this information about one industry is tough - but the efforts are worth it. Having in-depth information about your prospect’s industry is an essential step in convincing your prospect of your personal credibility.

Company Information

Knowing all about your prospect - in B2B markets, the company details is vital in the sales process. Apart from the financial information about your prospect organization, a salesman should know:

• History of the company - Who, when, how, why the company was started. Names of the founders, past CEOs and other key contributors to the company.
  
  
• Company’s products or service. Know as much as possible about your prospect’s product or service - market segment and price positioning. This will help you to position your sales pitch to be inline with their product lines.
  
  
• Current market position of the prospect. Know the prospect’s market share, its main competitors, also know the past trend of the prospect company’s market share. Know the current stock price, EPS etc. also the trend of these parameters ( EPS, Stock price, P/E). Effective salesmen will know their prospect’s current market position, and also know what was their position few years ago.
  
  
• Alliances/Joint Ventures in which your prospect is involved in.Knowing who are the partners of your prospective customer will help in closing the sale. For example knowing that your prospect has a joint venture with your competitor - will help you decide on your sales pitch (or abandon efforts to sell to that prospect)
  
  
• What is the USP of your prospect? Is it quality, price, reliability etc.. Knowing how your customer wins in the market will help position your sales pitch.
  
  
• Who are the competitors for your prospect? How does the competition to your prospect win? What type of competitive pressures does your prospect face - Price, quality, service levels etc..
  
  
• Key investors in that company. Names of the members of their board of directors - is it all insiders or share holders or independent directors.
  
  
• Names, designation, background and tenure of all the senior executives. If the senior executives have joined the firm from other firm, know their previous firm and designation. It is also important to know the turnover rate of senior executives. In B2B environment, knowing senior executives personally - their hobbies, interests, background etc.., is vital to close the deal.
  
  
• Know the organization chart of your prospect. How does the organizational chart look like? Knowing the organizational trends can help you anticipate changes and enable you to talk to the right persons.
  
  
• Mission statement of your prospect. Knowing the mission statement will help you to position your product/service in the same terms as their mission statement. For example if the mission statement of your customer firm involves quality - then you can pitch in the high quality of your product or service.
  
  
• What are the social causes your prospect supports? Are they involved in community activities?
  
  
• How often does your prospective customer gets involved in legal lawsuits? How often does prospect sue its suppliers/vendors or competitors. If your prospective customer has a known propensity to sue its suppliers/vendors or competitors, then as a salesperson, you need to be very careful in reading all contract documents and build in the potential cost of a legal entanglement into your price quote.
  
  
• Organizational Culture at your customer firm. Knowing how the people behave - will help you in your sales pitch. Few firms practice a AM to FPM work timings. In such cases you can avoid setting up late evening meetings.
  
  
• What is the nature of the relationship between your prospect and their vendors? Is cooperative, supportive and helpful or is it confrontative, hard bargaining type? This information will help the salesmen to better prepare for negotiations.
  
  
• Learn how the prospect measure themselves. Know how success is measured and rewarded at your prospect: Revenue, profits, market share, profit growth etc.. Know their targets for this quarter, for the year and long term goals.

A lot of the company information is available through their SEC 10K, 10Q, 8K reports (or similar reports for non-US companies) These reports are available only on public companies. For information regarding private companies - one needs to refer to paid database services such as www.hoovers.com or www.lexus-nexus.com or www.gartner.com.

Information can also be collected by talking to suppliers & customers of your prospect. Talking to a noncompetitive supplier will help you get an idea of their buying decision process.

Knowing all this information will enable a salesperson to talk to the customer in their financial terms - which makes it easier for the salesperson to communicate - and it impresses the decision maker. If I am the buyer, I will be happy to hear what the salesperson has to say about my company and in the terms which will help me achieve my goals.

Information about key decision makers

At the end - the buying decision will be made by a few decision makers. In most B2B deals, there will be a committee which makes the final decision. In most cases there will be couple of decision makers who yield a wide influence on the buying process. Knowing their names, designation, role, work history, hobbies, interests, even their spouses & kids names - will be useful. Knowing a person and bonding with that person creates an image that can be used by salesperson to close the deal.

I recall a story when a sales manager was able to close a multi-million dollar deal with a major network equipment supplier. Both the sales manager and the buyer had graduated from the same university, liked to listen music of "Grateful Dead". The sales manager and the purchase manager created a bond. This is also called as "Halo Effect" - and has been studied very intensively by physiologists. It has been noted that people like to bond with other people who are very similar to themselves. This human nature can be used in sales - by developing the same set of interests as that of the buyer. This is also called as "relationship selling". I will write more about it in future.

Closing Thoughts

Sales is a complex process. Knowing about the customer, knowing what the customer cares for, knowing how customer takes decisions, sharing values & interests with the customer is all vital to close a deal. Every successful salesman will be able to talk to customer in terms customer cares the most. Successful salesman will always have the interests of the customer in his/her mind.