I’ve trained a lot of sales reps over the years in the art and science of conducting assessments. One of the biggest complaints I’ve heard from my students is how hard it is to get any real cost information when you’re doing an assessment. Everything up to asking for pricing tends to go pretty smoothly, and then bam! The cost wall comes out of nowhere. It can sometimes feel like you are asking for their first born child or doing something illegal. The worst part is that real cost information has such a huge impact on whether or not a customer will buy into the results of your completed assessment.
Why are customers so bullish about holding on to cost information? To some extent it’s our own fault. In a traditional copier or hardware sales cycle customers have learned to keep cost information close to their chests. They do this because they have learned that a common tactic in a traditional copier sales cycle is to get competitive cost information in order to understand how much margin the sales rep can get away with charging. This is because many traditional copier sales professionals are paid on gross margin, not on revenue, which has traditionally been a great model for the copier dealership — it inspires the sales rep to sell something for as much as they can get away with. There is nothing wrong with that, it’s capitalism at its best. Unfortunately many customers have become wise to this selling routine and have developed counter-measures to contend with it. Nowadays when we ask them for pricing information on their existing fleet we are often met with “I’m not going to share that with you, just give me your best price up front.” Bummer.
The sad part is that most people providing MPS assessments are trying to get the cost information almost entirely for the benefit of the customer. An MPS assessment fundamental is to get rid of as many “assumptions” and “industry averages” as possible. In an assessment-based selling cycle the old paradigm of keeping all costs hidden simply doesn’t work. Because of this, we need to do a better job of explaining to the customer why we need accurate cost information for the assessment. I recommend that when you hit the wall of cost sharing that you cut to the chase:
“I get it. You don’t want to share pricing with me because you think I’m going to use that information against you. But please understand that I’m not trying to sell you a box or any toner. I need it for doing a proper assessment. The MPS assessment is different than what you are used to. It’s about transparency and true cost accounting. It’s about finding areas of improvement and providing solutions that will save you far more money than the traditional procurement process ever could. Without true cost information it will be impossible to assess what your existing costs truly are. It’s the biggest unaccounted cost you have today and my job is to change that so you can understand and control it.”
You can also let them know you are paid differently than they think:
“I don’t get paid on gross margin and our company has a policy of fair pricing. I get paid on success rates with assessments so it’s in my best interest to be fair. We will find you the savings you’re looking for but first we need to help you understand your costs. We need to be partners in this exercise and real numbers are critical to the effectiveness of the assessment.”
This works. I have been doing assessments for more than five years now and I have turned more customers around on cost information than I can count. I’ve done this by holding my ground and giving them a clear understanding of why I am asking for costs. If you don’t do a good job of describing why cost information is important they aren’t going to give it to you. Anybody involved in the early MPS days can remember a similar wall when it came to getting the ICE or DCA installed. But we have come a long way in understanding the needs of IT and doing a better job explaining the value of remote monitoring and management. Getting cost information isn’t hard, we simply need to do a better job of explaining its importance to the customer.
Let’s say you’ve convinced the customer to get you cost information. Leasing information and cost-per-page details for their A3 fleet is easy. But getting costs for toner purchases is tricky at times, even if they’ve agreed to share them with you, and especially if the customer doesn’t do a good job of managing toner purchases. Most companies are terrible at this and you will struggle if you ask for all toner purchases for the past year. Sometimes you’ll get it, so you should ask. In the cases where you can only get some of the toner cost information you can work from a sample set of invoices and apply the plus or minus discount against Staples or Office Depot pricing. As long as the customer agrees to this method you’re off to the races. If they don’t agree, ask them what they think a good compromise would be.
Even with these tactics you aren’t always going to get what you ask for. True story. That’s just the reality of any sales cycle. But hold your ground: If you don’t get pricing, you don’t do the assessment. Let them know you’ve been down that road and it is a waste of everybody’s time. You end up with numbers that nobody believes and there is no way to validate. An assessment without real cost values is like filling the gas tank in your car with water: You can do it but it doesn’t do you or the car one lick of good.
This article originally appeared in the January 2015 issue of The Imaging Channel.
West McDonald is VP of Business Development, Tigerpaw Software.