Success Story: Local Telecommunications Company

(All company and individual names changed)

 

Sales Opportunity: Competitive Loss Scenario

Client: City of Shreveport

 

Sales Value:  Approximately $600,000 annually

 

 

“This deal was in a ditch.  It was gone.  But we managed to save it and learned a lot of extremely valuable lessons in the process.  The most important one was: Always be selling the value proposition.” 

Joe Klein

AVP Sales, Louisiana Region

 

 

Close Call Yields Valuable Lessons

Always Sell Value Proposition

 

The city of Shreveport, Louisiana had made a decision.  They had tentatively resolved to take their business (ESSX service, and other voice/data services) to KMC, a XYZ Corp. reseller, sold on what appeared to be a significantly lower annual cost.  In the wake of the decision, the first meeting the Louisiana region’s XYZ Corp. account team had with the customer was very confrontational. 

 

Assemble the Team

The whole team – including the account rep, the systems designer, the service manager and the CSA in the major account center – was assembled.  Once the customer discovered that all these people, providing a whole host of value-added services, would no longer be there, they were very angry…not to mention unclear about what was included in their XYZ Corp. service. 

 

According to Joe Klein, AVP Louisiana region, “The customer thought that everything would stay the same except for billing because that’s how it was sold to them by KMC.  They said, ‘We can’t believe you’re taking all these services away.’ And our response was, ‘We’re not taking them away.  These are beyond the core services you get from XYZ Corp..  I’m pointing them out so you know what you should expect from any value-added retailer out there.’”

 

Value-Added Services = Big $

According to the KMC proposal, the city would save $60,000 a year over XYZ Corp. The account team quickly went to work quantifying the XYZ Corp. value proposition and put on the table well in excess of $60,000 in value-added services.  As Klein recalls, “We arrayed the team right in front of them and said, ‘If you receive no value from these resources, then you’ve made great decision.  If you do receive value, however, then your new vendor should be delivering that same value.’  When the customer could see graphically who was working for him, it had quite an impact.” 

 

According to Klein, his team got some unexpected help along the way from KMC, who hurt themselves by prematurely claiming victory before the deal was done.  “We came across several other customers who’d spoken to KMC and had been told that the City of Shreveport was KMC’s newest customer.  We simply suggested to them that they call Shreveport city officials for confirmation.  And when they did, the Shreveport folks were, quite upset about being used as a selling tool before any agreement was signed.”

 

In the end, the XYZ Corp. account team resold the customer and with a $600,000 annual impact, it wasn’t just a small win.  In addition, the team is discussing even more business with the customer now, thanks to driving home the XYZ Corp. value proposition.

 

We Simply Offer More

As Klein noted on several occasions, some of our most valuable people -- i.e. service managers and project managers -- are the ones we most take for granted.  For instance, XYZ Corp.’s project management team has only one job: to take over after we make the sale.  The competition just isn’t delivering that level of service.  But if we’re not spelling out to our customers the differences that these people are making for their businesses, it doesn’t matter how good they are. 

 

Klein observes, “We’re rarely going to be the cheapest game in town, so we need to justify the higher price.  Always be selling the value proposition.  We’d better do it before our customer is walking away, and with all the value-added services we offer, that’s just not hard to do.”

 

Earn Your Customers

The city of Shreveport opportunity underscores the need to get back to the basics of “earning our customers,” a somewhat new concept for XYZ Corp., thanks to our century-long market exclusivity.  Klein puts this in perspective, “We haven’t earned a single customer out there before competition.  They were just ours by default.  And we’ve had them for so long, we’ve just taken them for granted.  We have to demonstrate to the customer that we’re professional, responsive, courteous and attentive to their business.  The term ‘I want to be your business partner’ gets thrown around too loosely by salespeople who are not only unproven to a customer but know virtually nothing about that customer’s business.  You earn the right to be your customer’s partner.”       

 

And don’t assume that the customer understands the value-added services you’re providing.  Spell them out.  Klein’s team passed on another caveat: Make sure that all levels of the organization – especially top management – know what you’ve been up to. All too often, the decision to switch vendors is being done on a high level by people who aren’t in the loop of what we’ve done for them.  Be specific.  Point out, “Hey, last month, I worked with your marketing department putting together a campaign for e-commerce.  And our service manager has been working closely with your IT people to on some new solutions.”

Do It Now or Pay Dearly Later

Building this value and retaining our customers preserves – and boosts -- our bottom line in more ways than just the obvious one.  As Klein comments, “Think about a customer who, because he hasn’t been sold on the XYZ Corp. value proposition, has decided to take his business elsewhere.  How much more do we have to offer in the form of discounts to get the customer back in the fold because we’ve been lax in building that value proposition all along?” 

 

Let Them Return Gracefully

But, what happens if it’s too late and the customer has already decided to go to a competitor?  For starters, we need to go after that opportunity as aggressively as that competitor did to take it away from us in the first place.  Just as importantly, we need to factor in human nature and leave any anger or vindictiveness out of the equation. 

 

As Klein explains, “Give a customer the space to come back gracefully.  By this point, they’ve sold a lot of people on the decision and their credibility could be on the line.  In a professional way, sell the value proposition and all its positives and benefits, not how much they’re going to regret their decision to leave.  If customers feel attacked, they’ll go out of their way to defend their decision, even if it’s a bad one.”

 

In today’s competitive marketplace, the products and services we sell are essentially commodity items.  What separates us from the competition are the value-added services.  As Klein points out, “There’s nothing that we sell or package that can’t be resold.  The only thing we can sell is our knowledge and our focus on their business.  If we’re not out there demonstrating that every day, shame on us.  But when we do that on a consistent basis, we’re absolutely invincible.  We’ll win every time.”

 

END