What To Do When the Customer Says ‘No’

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Copyright 1999 The KLA Group. All rights reserved.

In Seminar 1, we told resellers not to despair. There are still niches they can fill when selling against Dell. But what do you do when you come up against a customer who says "no."

Typically, this is one of those savvier, price-shopping customers who is simply deciding "how many" and "for how much." This is the shopper who says he knows what he wants and refuses to meet to discuss "business needs." He demands the rep "cut to the chase" and hand over a price list. And often, he chooses to avoid resellers by shopping direct on the Web. What do you do when you encounter him? Is a reseller doomed?

The answer is a qualified "no". As we said in Seminar 1, it is best to focus on small firms that still may need the reseller's expertise. But the price-shoppers do call--if only to check your price--and there are ways to reel them in.

These customers see computers as a commodity. That's why they like Dell Computer Inc. and other companies using the Direct model. But they may have trouble getting exactly what they want from direct sellers. To win this account, resellers have to rethink their value proposition. This is not a case where they become the client's advisor by clarifying business goals, educating and advising. The reseller's value is in providing the exact requirements in the quantities the customer needs, on the timetable the customer wants, at a fair price. (Note that doesn't mean the lowest price possible: these customers will often pay a bit more to get a good match to their specific needs).

Take an example. Let's suppose the customer wants to deploy laptops to its national sales force over the course of a year, purchasing 12 each quarter.

The problem for this customer in buying from Dell is that Dell is constantly changing the configurations of its computers. The amount of memory, disk space, attachments and even the chip may be different for each phase of the deployment. Now the manager faces sales force dissatisfaction when the reps compare notes and find out that some people have the latest and greatest and some people have, essentially, last year's model.

Point Out Problems

In this situation, the reseller can point out the problems with changing configurations and guarantee consistency throughout the purchase. Dell will only do this for the largest-volume buyers; but resellers can offer this service to the vast majority of smaller customers, who wouldn't warrant personalized attention from Dell. (Other manufacturers change configurations too, but resellers have more clout than individual buyers and can make a configuration guarantee work, or can alert the customer to the potential problem and agree on several possible configurations to deploy.) Customers will pay more for this service (though certainly not the 25 percent markup resellers have enjoyed in the past.) It's critical to listen carefully to the customer's specifications and meet them precisely to provide this new value.

Another key to winning this type of customer: Reps must change the way they view relationship-selling. In the good old days, reps courted large deals with lengthy in-person meetings to discover business needs and build strong personal ties. Nowadays, most customers do not want or need this level of service.

What they do want is a rep who can touch base without pressuring them. Reps must allow the customer to define the type and frequency of contact they want. It is a waste of time to push for in-person meetings if the customer wants a quick phone call every other month to check on new developments. This approach feels uncomfortable for traditional, relationship-trained reps. They worry they'll lose this buyer to the next lowest bid that drops on his desk. That is possible. But bear in mind that people still prefer to buy from people they know and like.

Make it easy and enjoyable

Make it easy and enjoyable for your customer to buy from you. Even if the customer strays, he may be back next month because the competitor messed up his order. Reps need to provide consistent professional service and as close a match as possible to the customers' requirements. Part of that is understanding the contact method and frequency the customer prefers. If reps keep at it, they will be remembered and appreciated.

That said, there still is room for relationship selling, but only if the rep sells high enough in the organization to find a true business need. A likely scenario might be a fast-growing small company. The rep may have handled a couple of small orders, then discovered that the company plans to open a new office or division. At this point, it would be very appropriate for the rep to seek out in-person meetings with key decision makers and focus on helping the company meet its goals and address its challenges as it expands.

A common tactic in relationship selling is the Total Cost of Ownership (TCO) Analysis, which uncovers hidden costs in purchasing computers, such as energy use and down time. "Soft" costs include more difficult-to-measure costs such as organizational efficiencies, travel associated with training on the computers, or staff time saved on further purchasing research. TCO analysis still works in today's world, but with some modifications.

Cultivating Relationships

Remember that buyers see computers as a commodity, so they increasingly view these analyses with suspicion. "All computers are the same," the customer thinks inwardly. "They're just throwing around funny numbers to make themselves look better." It is very important when using TCO to make sure the customer buys in to each cost referenced. Stick to the obvious costs, like electricity usage or major differences in downtime, and make sure the prospect agrees with each. If the client doubts a number, substitute a more conservative figure that she suggests. For instance, suppose the rep's TCO analysis shows the length of the average help desk call will decrease 3.6 minutes, for a savings of 17 percent. The customer believes the call time will only drop by one minute. The rep should use the one-minute figure. In the end, the numbers will not be quite as impressive, but they are numbers the prospect believes in--and will support in the financial justification and decision processes.

Computer buyers are ever more savvy today, so resellers need to keep their selling strategy focused on the customer's wants and desires. Cultivate that relationship by: