Insight Delivery Examples

Each method starts off with a ‘warmer’ to gain the customer’s agreement that they are experiencing the symptoms of a particular problem that the salesperson’s unique capability can solve. Each method then takes a different approach to reframe the customer’s thinking towards the problem and change.

STORY EXAMPLE

1- Warmer: Many companies we speak with today state that profitable sales too often end up as losses when their finance department reconciles the true cost of goods sold at the end of the month. In a recent survey of 600 companies, for example, over 85% complained that the COGS is a moving target for 29 days out of 30.

“Is this something you experience?”

2- Introduction: I’d like to first share with you how we helped another customer with this challenge so that you have a better understanding how we may be able to help you with your situation, OK?

3- Insight Customer Scenario: Let me tell you about Trace, an Automotive Parts Distributor in WI, who needed to know the true profitability of his sales.

The problem is that Trace purchases inventory from so many different sources, so he doesn’t know what the true cost of his inventory is. He can buy the identical part, for instance, with as much as a 30% gross margin difference between a drop ship price with a 3-7 day lead time, and the price from a local warehouse because he’s got to have the part delivered the same day. As a result of the different ways Trace acquires inventory, the real profit on many of his sales is unknown. And it remains unknown until the true cost of his inventory is reconciled at the end of the month on his balance sheet. Until that time, his financials, check-book, and reports just don’t add up. So for 29 days out of 30, Trace is operating in the dark hoping that somehow he’ll be profitable at the end of the month.

With razor thin margins, Trace realized that he needed to turn the lights on and expose the true cost of goods sold when one month 50% of his entire profit was wiped after his accounting department finally recognized the local warehouse orders into the COGS for that month.

So Trace was relieved to discover that ABC Software was able to provide a solution that allows for up to 14 different vendors/costs per part. Now Trace’s purchasing manager can create purchase orders with accurate costs.  And Trace’s financials, check-book, and reports all finally match so he can run his business with confidence.

4- Ask to hear customer’s story: But that’s enough about Trace, how do you ensure the true profitability of sales?

5- Story Leading Questions: If the customer’s story is vague, follow-up with story leading questions (see Insightful Questions below).

6- Explore The Solution

Probe History: How have you tried to solve this problem in the past?

Vision of Potential Solution: When you are quoting a price, would it help if your COGS included not only your drop ship price, but also the price of all of the current month’s last minute orders so that you were 100% confident in the true profitability of the sale? 

PROVOCATIVE QUESTIONS EXAMPLE

1- Warmer: 

Many companies we speak with today state that profitable sales too often end up as losses when their finance department reconciles the true cost of goods sold at the end of the month. In a recent survey of 600 companies, for example, over 85% complained that the COGS is a moving target for 29 days out of 30.

“Is this something you experience?”

2- Explore The Problem with Insightful Questions

Evidence: Do you buy drop shipments, and do you also buy from local warehouses on the same line?

Impact: What’s the price difference?

Evidence: Do you buy the same inventory from different suppliers at different prices?

Impact: What’s the price difference?

Evidence: Do you need to make adjustments to the inventory value when you reconcile your financial statements at the end of the month?  If so, how do you know your true cost of goods sold at the time of the sale?

Impact: What effect can that have on your margins? What are your total sales? So it could be costing you $x?

Confirm: So you mentioned that…

3- Explore The Solution with Insightful Questions

Probe History: How have you tried to solve this problem in the past?

Vision of Potential Solution: When you are quoting a price, would it help if your COGS included not only your drop ship price, but also the price of all of the current month’s last minute orders so that you were 100% confident in the true profitability of the sale? 

TEACHING WITH RESEARCH EXAMPLE

1- Warmer: Many companies we speak with today state that profitable sales too often end up as losses when their finance department reconciles the true cost of goods sold at the end of the month. In a recent survey of 600 companies, for example, over 85% complained that the COGS is a moving target for 29 days out of 30.

“Is this something you experience?”

2- Reframe: Because there is up to a 30% gross margin difference between the drop ship price and the price of last minute orders from a local warehouse, the true profit on a sale is unknown until all of the premium priced last minute orders are included in the COGS at the end of the month. Add with razor thin margins, these small premium priced orders from local warehouses can add up and have a surprisingly large impact on profit.

3- Rational drowning: Based on a benchmark study, 2-3 month of the year profits are revised downward by 30-50% when last minute orders from local warehouses escalate.

4- Emotional Drowning: To help customers to meet the 5 o’clock deadline, Trace, an Automotive Distributor in Wisconsin, must often acquire inventory locally at premium prices so that his customers can have it delivered the same day. Because of the delayed recognition of residual local deliveries in the COGS, Trace feels like he is operating in the dark hoping that somehow he’ll be profitable.

5- New Way: Imagine if it was possible for your COGS to reflect not only the current drop ship prices, but also the price of all of the current month’s residual last minute orders?

6- Your Solution: ABC’s Software is able to provide a unique solution that allows for up to 14 different vendors/costs per part so your purchasing manager will be able to create purchase orders with accurate costs. Now your financials, check-book, and reports will all finally match so that you can run your business with confidence.