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Frank Coker and CompTIA deliver the Art of the Deal presentation at VMWare Conference
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Quick Start - The Art of the Deal
Presented by: Frank CokerCompTIA FacultyCEO, CoreConnex
Why is Deal Making Important?
• Good deals lead to profit• Bad deals lead to loss• The difference is subtle• It’s part science, part art• Doing it well takes practice• Each person has their own style• Good deals are win-win
(nobody looses)• Getting it right will change your
future!
What is a “Deal?”
• All sales are deals – large and small• All that is required is a price and a deliverable• Deals can be formal or informal
– Informal: you give a customer a piece of equipment, they give you a check.
– Formal: you negotiate an agreement with multiple phases of delivery and have a payment due at the beginning of the project and at the end of each phase.
• A deal requires 2 parties to agree to an obligation to each other – pay for product, pay for service, etc.[Deals with more than 2 parties are really multiple related 2-party deals]
• Both parties give something and receive something
Deal Life Cycle (example)
Phases
1. Initiation1. Initiation 2. Investigation2. Investigation 3.Implementation3.Implementation 4. Operation4. Operation
1. Business Need2. Solution Concept3. Preliminary
Analysis4. Project Proposal5. Approval
1. Project Team Initiation2. Research and Analysis3. Alternatives Evaluation4. Recommendation5. Approval
1.Implementation Team Initiation
2.Detailed task plan3.Pilot Implementation4.Rollout5.Post Implementation
Review
1. Sustain2. Performance
Review(SWOT)
[Phase 1 is a billable project to investigate and analyze alternatives]
Selling Approaches
Passive ActiveOrder takers Proactive Dealmakers
Sell what the customer asks for Sell what the customer needs now and in the near future
Solve today’s problem Solve problems with the future in mind
“Tactical sales” “Strategic sales”
Compete on price and features
Compete on quality and benefits
Where Should Sales Come From?
• 65% from existing customers• 20% from referrals
(ask existing customer for referrals)• 15% new leads
Source: IBS Sales School
Features Drive InterestBenefits Drive DecisionsFeatures• Capacity• Speed• How it works• Specific functions• Specifications• New capabilities
Benefits• Results• Effect on business• Impact on customer• Confidence• Risk reduction• Reliability / scalability• Perceptions / feelings• Alignment w/ goals
What is Margin?
Warning: most people get this wrong and don’t understand why they are losing money!
Formula:(total price – all direct costs) / total price
Example:• Total price = $100,000• Total cost = $60,000 (product + service labor)• Gross profit = $40,000 (a.k.a., “gross margin dollars”)
• Margin = 40% (most people think 67% markup = margin)
10 Tips for Successful Deals
1. Understand customer requirements
2. Present 3 alternatives that solve the problem
3. Separate features from benefits
4. Organize your proposal for an executive
5. Discuss alternatives and pricing before the proposal
6. Follow-up on proposal to verify fit
7. Understand customer’s approval process
8. Ask about potential objections
9. Focus on reliable, low risk, and solid solutions
10.Ask for the order
1. Understand Customer Requirements
• Ask about pain points• Ask about goals, priorities, timing, volumes, etc.• Determine “non-requirements” - rule out potential
requirements by describing options that are outside of their stated requirements, and confirm that they are not requirements
• Write down what you learn – taking notes builds trust and shows that you think this is important
• Confirm what you think you heard• Determine “underlying requirements” – don’t confuse
solutions or desired results with requirements
2. Present 3 Alternative Solutions
• One solution = yes/no• Multiple solutions = choice (much stronger path)• Always look for high/medium/low price options• Be sure that all choices are viable
even if they don’t meet all requirements
• Expect customer to choose the middle option encourage them to consider all 3
• Evaluation of alternatives should be billable especially for implementation and service projects
• Understand budgeting and availability of funds don’t do projects where recommendations can’t be funded
3. Separate Features from Benefits
• Each alternative should have a separate list of features and a list of benefits
• Features and benefits should be compared for the 3 alternatives as part of the summary
• Features are good for comparisons• Benefits are the “reason to buy”
4. Organize Proposal for an Executive
• Put the “bottom line” up front• Tell the whole story on the first page
– Short proposal summary– Cost and benefits– Key milestones– Signatures
• Everything is an exhibit after page 1• Legal provisions are an exhibit
See CompTIA Guide for further detail
5. Discuss Alternatives Before Proposal
• Before proposal, prepare detailed summaries of alternatives and discuss these with customer; find out their preference and their reasonsif you can’t get confirmation on the customers preferences, writing a proposal will be a waste of time
• The final proposal should include a brief summary of the alternatives and a recommendation that aligns with prior discussionsthe final proposal has already been sold, the document simply becomes the formality
6. Follow-up on Proposal to Verify Fit
• Create a follow-up process for all proposals that is followed by your team
• In approximately 3 days, call to verify that the proposal fits their criteria and fully addresses their needs
• Get confirmation on timing of approval (assume agreement)
• Get permission to continue follow-up
7. Understand Customer Approval Process
• Is funding already budgeted?• Who makes the decision if funds are not budgeted?• Who makes the decision if funds are budgeted?• What are the steps involved in the process?
– Legal / contractual– Financial– Operational
• What does the customer require for acceptance of delivery?
• What you don’t know can harm you!
8. Ask about potential objections
• Don’t wait for the customer to raise objections – ask!• The more you learn about objections, the easier it is
to make a sale• Don’t confront objections; be on the customer’s side
when you discuss objections• Key question: “How do we get alignment with all the
key players in this decision?”• Don’t submit a proposal if there are unresolved
objections
9. Focus on Key Benefits
• Reliability• Low risk• Solid solution• Proven solution• Your commitment to the customer
* Trust ties back to benefits (not features)
10. Ask for the Order
• Many sales don’t happen simply because nobody asked for the order
• This is not asking for a “yes” to the proposal; it is asking for the signed document or the approved purchase order
• Preferred approach: ask “how do we get the needed signature or approval so we can proceed with the order?”
*Nothing happens until the order is placed!
Bonus Tip: Know the Key Players
• Decision maker• Internal advocate• Likely objector• Gate keepers• Key influencers• Potential blockers
Read: The New Strategic Selling by Heiman, Tuleia, and Miller
How Do Your Sales Compare To You Peers?
• Benchmarks – to industry peers
• Monitor industry trends
• Share data with your team
What Benchmarks Exist?
• Corelytics© by CoreConnex, Inc. (www.corelytics.com)
• CompTIA sponsorship of Corelytics Financial Dashboard• S-L Index™ Included in Corelytics
• S-L Index™ by Service Leadership, Inc. (www.service-leadership.com)
• S-L Index™ Comprehensive Diagnostic Report©• S-L Index™ Quarterly Comprehensive Report©
• Financial Dashboard• Benchmarks• Business model calculator• Analyzes data from Your Accounting System
– QuickBooks (automated)– MYOB (Australia, New Zealand - automated)– Other Accounting Systems (file import)
• Goal tracking• Solution for showing financial progress to your team
What is CorelyticsTM?
Special Edition for CompTIA Members
Your Sales Trends in Graphics
Where am I headed?
Use the “big picture” to understand your trends
By line of business
Peer benchmarks
Basic trend lines
Your goals
How do I compare with my peers?
Your business model has unique industry benchmarks
Your revenue mix
Using the PBM® Calculator
Your model
VMware and CompTIA Offer:
Free Financial ForecastSee your trends, financial strength and future forecast
How?• Email: [email protected]• Subject: VMWare Report• Text: Your contact information
References and Additional Materials
• CompTIA website (www.comptia.org) – Member Resource Center – under Business Management Finance
• Corelytics – www.coreconnex.com for overview
• Sign-up – CompTIA.Corelytics.com
• Questions – [email protected]
Questions?
Thanks!
