Habit 41: Know your customer/prospect’s justification methodology

July 30, 2017 Selling Comments Off on Habit 41: Know your customer/prospect’s justification methodology

To continue with the “Account Development Habits”, let’s look at Habit 41: Know your customer/prospect’s justification methodology and prepare and present a written justification for every “C” project.

Knowing the customer/prospect’s justification methodology is only half the battle. The other half is being able to prepare justifications so that you can determine if a project is likely to be funded or not. There is no sense chasing a project that does not have the possibility of being funded. Although, politically, you may have to go through some effort to maintain the relationship, this effort can be modified for poorly justified projects, to save time.

Earlier we discussed at length, that “Time” is your most precious commodity. Preserving this commodity, so that it can be used to develop submitted projects into funded projects and close funded projects, should be your number one priority. Understanding justification methodology and being able to prepare justifications is, I believe, the most important tool you can possess.

Justification methodologies will vary based on the type of purchase. For capacity, manufacturing overhead and component purchases for production products, the justification is clear and funds have already been committed. The purchase decision becomes a matter of value provided, service, support and of course price. The justifications for capital projects are quite different.

Justification methodologies for capital projects can also tell you if you are calling on the proper levels within the customer/prospect’s hierarchy. “Payback” justification methods are typically used by staff people, such as; purchasing, engineering and manufacturing. “Internal rate of return” or “ROI” methodologies are typically used by management, the people that actually have to present the budget for approval.

I strongly suggest that you work with management people that have to justify projects to upper management. Working at this level can save an awful lot of time and effort.

Not knowing “Internal rate of return” justification methodologies can put you at a huge disadvantage. These methodologies are not complicated and can be put in spreadsheet form to be used as a “Thumbnail” estimate early in the project’s life.

Reviewing these “Thumbnail” estimates with the customer/prospect can open doors to relationship building and understanding projects in more depth, both of which are to your advantage.

If you don’t know how to do “Internal rate of return” justifications, learn how. If you do know how, do one for every “C” project and review it with the customer/prospect to determine if it makes sense. Present the justification and ask questions to determine if you understand the application properly.

Probe for more details to make sure that you have a complete grasp as to the reasons why your customer/prospect wants to invest in the project. Understanding the reasons why (the motivation) a customer/prospect wants to invest in a project is crucial in deciding how much time and effort you will invest.

Know your customer/prospect’s justification methodology and be able to prepare and present justifications and discuss them in detail.

Habit 41: Know your customer’s/prospect’s justification methodology and prepare and present a written justification for every “C” project.

“A Habit” is not work, but just a thing that is done every day and knowing your customer/prospect’s justification methodology and preparing and presenting a written justification for every “C” project is critical to your success in sales and can easily become a Habit.

TIME MANAGEMENT. For Top Performers every task is planned and focused on the goals that earn the results. Top Performers plan and then engage. They act on their plans, they work hard and they get results.

Coaching these skills is a critical part of what we do. We are here to help you develop and implement your Strategic Plan and coach and develop the skills to implement the plan successfully

We are having great success coaching and implementing these methods and skills and our clients love it!

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