Saturday Morning Sales

Q: Kevin, I have recently had several new customers change payment terms on me after contracts are signed. Do you have any advice on how I can get paid on my terms?

A: Ah yes, the wonderful world of payment terms. This is truly one of those topics that I do not enjoy discussing, but it must be addressed on an almost every day basis now. How a sales person deals with this topic can frame a great deal of the business relationship.

Sales people, unfortunately, are almost never trained or taught to address payment terms with a prospect or customer. In most cases I have found sales people are just told what their company terms are and do not discuss it further. When a customer brings the subject up, which seems to be after contracts are signed, the customer takes control and states what their payment policy is – period. This frustrates me because in most cases their terms are much longer than your terms thus extending you and them.

Sales people should address getting paid as part of the sales process. You should present your payment terms at the same time you are presenting the price of goods or services. You should ask the customer if they are acceptable to your terms or if they have something required on their end. Payment for your goods or services should be, if needed, negotiated, agreed upon in signature, and then held to this standard going forward.

Payment terms, at times, cannot be negotiated, and may need to be on the customers terms only. If this is the case, and your company is acceptable to these terms, they should still be agreed upon in writing as part of your contract. There should be penalties for failure to make timely payments. The customer must be agreeable to signing on these terms, especially if you are accepting their schedule.

Sales is a game, and similar to any game of sport, once you realize how to play the better you’ll become. And, practice is just as important in sales as in football or lacrosse. But, no matter how much you practice, you can never be fully prepared for the unexpected. In football, for example, you may fumble the ball on the five-yard line and turn it over to the other team. In lacrosse you may step over the midfield line and be called for an offsides just as your team was gaining momentum. In sales, you may get the unexpected question from the audience, which could throw the balance of the sales pitch in the favor of the prospect.

What I call questions from the audience are oftentimes the ones you least expect, ones that may not make much sense to the topic at hand, but could change the dynamics of your presentation or pitch. It may simply be a question you weren’t expecting or even a question you don’t necessarily find timed right.

The key to answering questions from the audience is composure. An ‘A’ level sales rep knows what I mean by composure. More times than not a question from the audience may simply be thrown your way to shake you a bit during the sales process. The prospect, like a member of an audience when you’re giving a speech, may try to rattle your cage to throw you off your game. Composure is treating the questions from the audience as par for the course, even if you are not entirely comfortable answering the questions being asked.

For example, I was recently in the final pitch to a new client, when out of nowhere the chairman of the company joined the meeting. He had no idea what portion of the potential project we were discussing, nor did he care. He abruptly walked in which seemed to surprise his own team and asked me one question: what makes you any different than anyone else we’ve worked with in the past? I believe I handled the situation rather well and simply paused before briefly explaining who my firm is, why we’re different, our expertise, and most importantly our guarantee. That sealed the deal. Right in front of my eyes he grabbed the contract from his vice president of marketing and signed it.

This gentleman had already done his homework on me and my firm. He had previewed the proposal before my arrival. He had already decided to sign the contract before walking into our meeting. But, he wanted to rattle my cage and see if I could answer the most basic yet important question from the audience in order to seal the deal.

Back to my earlier comment, you can only practice so much, not knowing what may happen in the course of the sales game. I encourage you to practice composure as much as the knowledge of what you are selling and to whom.

Who is in control of your sales process? Is it you or your prospect? Why does it matter so long as you get the close?

The answer to the last question is the most important and drives the answers to the other two. Absolutely, it matters who is in control even if you get the close, because it will set the stage for all remaining deals to come. And, if the prospect or customer is in control, well then you are not and that is a big problem.

Who chooses the delivery dates for your products or services? Who sets the price? Who chooses the payment terms? I must implore you to remain in control of your sales process. Certainly, there are negotiating factors that come into play, such as discounts on shorter payment terms, but those discounts must be offered by you and not just given to the prospect or customer upon request. 10NET30 may not be a setting in your accounting system, so how will you account for this discount if you cave and give it to the customer? What if the prospect is putting a lot of pressure on you to start the project next week and you say yes? Doesn’t do you any good if your project team is already booked out for the next two weeks. You gave in and said yes to a request that you had no control over and now you must either convince your team to make an accommodation in their schedule or you need to ask the customer for forgiveness in that you cannot actually start their project for two weeks.

Being in control of your sales process does not mean you need to be hard-nosed throughout the entire engagement. Nor does it give you license to be a cocky jerk with a “my way or no way” attitude. Being in control simply means being transparent. Your price is your price. Your terms are your terms. You can start their project as soon as your team has availability in their calendar. Your customer will buy from you if they believe you are the best fit and will appreciate the honesty and transparency of your sales process.

Being in control also means that you are in control from day one. There is no reason to work through the sales process in shadows up until the closing process only then to become transparent with your prospect or customer. In other words, be as open, honest, and transparent on the first day or the sales process as you would be asking for the signature or PO#.

True value, no not the hardware store, but your true value is a business asset that should never be taken for granted. Unfortunately, all too often we do not place enough true value on ourselves, our time, our knowledge, or our company, and clients may take advantage of this situation. While I do believe there are certain clients that will take advantage of you at every turn, something about the way they do business, not everyone will take advantage of you intentionally. You may be equally at fault for allowing someone to take advantage because not only do they not grasp your true value, you don’t understand your true value either.

What do I mean by true value? Take for example, in the world of professional services, that a client will hire you for your knowledge, experience, and capability to execute in a manner for which they lack the same skill set. Your true value is a multiple (or x factor) of the following: your education and credentials, years of experience in dealing with similar challenges, and possessing the knowledge on how to execute a solution to the client’s problem. What happens then, after the client hires you, when they want you to change the manner in which you work? They want you to adapt to their environment rather than working within your own. They begin by asking and later demand that you “teach” them what you are doing and how you are doing it. They do not place any value on your experience and capabilities, and if you allow them to exude such behavior, then you too do not know your true value.

Sales people are pleasers. Sales people want to please their clients by providing a product or service that meets their needs. Sales people want to please their management by closing at or above their set quota and want to bring good clients to the company. Sales people, first and foremost, must always know their true value or what they bring to the table. In doing so, they will be much better prepared to hold steady throughout the sales process, thus not allowing the client to take advantage of them or their company. Clients too, when dealing with a sales person that truly knows their true value in the negotiating process, will treat the sales process with a great level of respect, enthusiasm, and will appreciate how the deal gets done.

Know who you are, what you stand for, the knowledge you possess and that this knowledge is not free to others, and you will gain a greater perspective on your own true value. Be confident but not cocky. Be sincere and empathetic with your client. Trust that displaying your true value will be appreciated and in return you will gain a great amount of success.