Artful Discovery in the Sales Process, Part 6

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Welcome back to another edition of Whiteboard Wednesday. This is the sixth and actually final video in my series on Artful Discovery and the topic today, as you can see, is understanding the buying process. We’ve talked about a lot of stuff in this series, specifically how discovery really is about a couple of things.

Discovery is about understanding need (I will put an extra E in there for fun), buying process, which is our topic today, and ultimately ensuring that you understand the impact on the prospect’s business that you’re going to have. (I put a Y there. My spelling doesn’t seem to be all that great today.) Anyway, so this is “understand the buying process,” which is obviously something that is near and dear to my heart, and also something that I think a lot of salespeople don’t do very well.

Let’s just talk about a typical conversation in a sales interaction. Let’s talk about, between salesperson and sales manager reviewing a deal, what are the things that come back when asked, “So tell me about the buying process?”

I do a lot of deal reviews and work with prospects to help them get better at discovery. So I will be reviewing with a salesperson, I will say, “So tell me where we are in terms of understanding the buying process.” The two things I hear most often, these should be pretty un-surprising. They have (Guess what I’m going to say here. Guess what the word is.) “They have budget. They told me they have budget.” Never heard that one before, and the second one is, “I am talking to or know or can’t get in front of the (what’s the word here?) Decision Maker.”

This is pretty much the extent of salesperson conversation, understanding the buying process in most cases today. This concept of, “they have budget,” right? Because they told us so, and they will tell us that either “we’re talking to” or “can’t get to” or “working to get to it,” the decision maker. Obviously frankly both of these concepts are strongly outdated. I, in fact, refer to budget as the “B word” and my counsel to salespeople is, stop using the B word.

The other thing I will say to sales folks is, there’s no such thing as a “decision maker” in today’s age and today’s world. Very rarely are you going to be talking to a single person that has all the elements necessary to complete a deal or even the concept of decision, and various methodologies (sales methodologies) I think have some really good concepts for thinking about this in terms of, are they an influence or are they an economic buyer, technical buyer?

Pick which one you want but understand that there’s rarely one single person out there, one person in the business world who has got the check, who’s the one person who can make the decision and guide the implementation and has (I’m trying to draw some money in his hand) the financial authority. So we have to remove ourselves from those concepts if we want to be successful.

Let’s just talk about budgeting for a second because I think that’s an instructive paradigm and what I will ask sales folks is, “Have you ever gone through a budgeting process? Have you ever been part of submitting a budget, dealing with a real budget process?” So yes in fact budgeting is something that is required in an organization to spend money, but it’s not simply a matter of, “I have budget. It sits there. It’s like I’ve got a pot of money next to me that I can just kind of dig into anytime.”

So if you think about the budget process, and I will try to go briefly through this, departments and individuals typically on an annual basis have to submit their budget. They submit budgets, meaning what they think they’re going to spend, et cetera. Budgets go through an approval process, and typically these happen on an annual basis where the budget is submitted and eventually signed off on and lots of line items, et cetera, and there’s always some pencil sharpening and how to reduce this. Very rarely do people say, “Oh, your budget is too small. Let me throw some more money at you.”

So there has got to be this approval process. Once that has gone on, what a lot of folks don’t understand is that the concept of an approved budget and allocation for that funding, the concept of a budget being allocated may be very different. So allocation could include the concept of what quarter that’s going to fall into. You might submit a budget for the year and have a lot of money planned out in Q4, but those investments may not be available to you in Q1. So that’s really important to understand. When does the money come through?

Then finally, I’ve never been in an organization literally that hasn’t somewhere around (let’s call it February) taken a look at their financials at how they’re tracking to plan from a revenue standpoint and gone back and said, “We need to adjust our budgets.” So in a lot of cases, the budget that one thinks they might have either year to year, quarter to quarter, is always subject to change.

So be really careful of the B word, and then another thing that you want to understand here is that organizations regularly will take budget from one department. (Well, I don’t know. Let’s do it this way. Let’s say sales is here and marketing is here.) If the Sales VP can basically make a case for better use of those funds, the CEO or the CFO can move that money around. So really important to understand that budgeting is a process and when somebody says to you, “I have budget,” that’s usually kind of a false indication of whether or not they actually know how this process works.

Here’s a tip, if you will. Instead of asking, “Do you have budget for even allowing that?” my favorite inquiry question from a discovery process standpoint, really two things. The first is, “How does your company typically go about investing?” Make a broad acknowledgment of the process involved.

The second component I would say is I want to understand both (obviously about how the company goes about investing money), but I also want to understand how that individual has experienced investing in a particular project. So I would say, “What is, or maybe even, describe to me, walk me through your personal experience in navigating large purchases, large investment opportunities, et cetera, within this organization.”

So it matters how the company does this. Do they have a process that is transparent, that is known and that is sane? Then more importantly, has that person navigated the budgetary process?

I think what you will find is for most individuals, we sell stuff all day long, which means we’re always going through the sales process. They’re not buying a lot of big ticket items. So their experience, their knowledge of and their competency in the overall budgeting allocation process may be very weak, and we have to understand that.

So I think I’ve harped quite a bit here on the budget process. Let’s talk about the other components of the buying process that you need to understand how they work, what they mean, what they do, et cetera. So these are just terms, if you will, and you can use them as you will. You can change them. You can ask your prospects to guide you around this, but most companies have fairly formal ways of thinking about or need to have ways of thinking about how they go about vendor selection.

How many times have you been part of the buying process, navigated all of the needs upfront, et cetera, only to find out that there’s a corporate policy that they have to skip bits from three vendors or some sort of overall (I will say) corporate purchasing requirements?

You’ve got to make sure you understand any of these if you’re going to sell effectively. That’s the (I got enough from there. Perfect.) So that’s really important. In a lot of organizations, regardless of the departmental budgetary process and requirements, there may be a finance review. In a lot of cases, this can sound or smell a lot like purchasing. But what’s involved there?

But sometimes for large purchases, whether it be finance, CFO, sign-off is required. I’ve had experience in my life with deals that have required board level sign-off. There was a sufficient value. Anything over half a million bucks a year had to be signed off on by the board.

Another area that’s very much neglected is a legal review, and I put that very much in the buying process. A purchase is a legal relationship that ultimately involves the signing of some sort of agreement, and more often than not, legal has a say in that.

I sure would hate to get at the end of your quarter trying to close a deal, bringing you over the finish line, only to understand that that point in time now we need to go through legal review even after we’ve agreed to all this, and that’s going to take another two to three weeks. So don’t let that get in your way.

The last one I’ll put on here, and again this is probably a list we could keep going with, is signing authority. I’m always curious who signs the contract. What level of person can sign the legal agreement, what level of person can sign off on the PO? Basically you got this other concept of chain of command. But again it’s very unlikely that anything you’re selling of magnitude is going to be something that you’re talking to a single person who has the budget and the ability to allocate that money, sign the PO, sign the legal document, sign terms and conditions, et cetera.

So this is just a small list of aspects of the buying process that you need to make a part of your discovery process. I think it’s so important that I actually advocate for a buying process conversation to be a dedicated discovery session. It sounds something like this:

“Hey, Mr. Prospect, we’ve been talking about your specific needs, your current environment, how we hope to drive impact for your business. One of the things I want to make sure we cover is an understanding of how you guys navigate through the purchasing process. How does your company go about investing in large ticket items or complex services, arrangements, et cetera? So I would like to spend a dedicated conversation, maybe 30, 45 minutes, having you walk me through your personal experience with this, and I can share with you sort of how we tend to do things.”

However you want to frame it, you can even provide an agenda based on things you want to talk about because there’s a good chance your prospect might not actually know all these things off the top of their head. Bottom line is it’s yet another area to have (I’ve said this a lot) a conversation. If you’re not having a conversation about this, it’s happening in the background. It’s happening without your knowledge, and it could come back to bite you in the end.

Thank you once again for spending a little time with me in the Whiteboard Wednesday. There should be a link down below here that you can click on if you want to get the whole series. Also sign you up to get my articles that I put out and guest blogs on a weekly basis. So if you missed some of the other ones or want to get them sent to your inbox, there should be a link down here, if not I’m going to look really silly. Other than that, I look forward to seeing you next time on Whiteboard Wednesday.

By Townsend Wardlaw

photo credit: kenteegardin via photopin cc