1. The document discusses strategies for selling to business-to-business customers, focusing on understanding customer needs and involving them in the purchasing process. 2. It outlines the typical 8 phases of an industrial purchasing process and provides tips for addressing each phase, such as making customers aware of potential solutions during demand noticing and specification phases. 3. International B2B strategies are also covered, emphasizing the importance of understanding local markets and cultural differences when expanding business globally.

1. Selling 101 in B2B How to crack the industrial buyers nowadays Guest Lecture, June 26th 2009 International Buyers Behavior Herwig Kirchberger

2. Who is bugging you from 6:00 – 7:30pm? Herwig Kirchberger 1975 St. Florian Enns Hargelsberg Steyr Wels Graz Dublin Schärding Krems

3. B2B Sales and its characteristics B2B Sales/Marketing Strategies Purchasing process in the investment goods industry International B2B Strategies Enterprise 2.0 Personal Experience in international B2B Sales I know a bit about …

4. B2B Sales and its characteristics

5. Purchase Behavior in B2B So the key is to find out, what your customer is EXACTLY looking for The fact is, that most of the time your customer doesn’t even know! This is a big chance for you! This on the other hand is depending on the market your customer is doing business in B2B Sales = Industrial Marketing Not quite the case for industrial B2B Sales…

6. A view significant differences between B2B and B2C Customer need to buy in order to stay profitable Purchase is structured and depends on multiple persons Multi-level buying procedure that expands over long period Complex Products / Service Customer is going with his gut feeling (Price can overshoot costs tremendously ) Needs can change rapidly according to trends High Brand Awareness and Importance of Trend Setter Selling at special occasion & place

7. B2C Marketing & Maslow’s hierarchy of needs

8. B2C psychological multi-layered Buying Behavior Cultural Factors Social Factors (family, friends, status, etc.) Personal Factors (age, job, etc.) Psychological Factors

9. Business-to-Business Sale Its all about personal relationships (and power) Its all about strategies Business Life is a game and not a war, so don’t take Sun Tzu & Clausewitz literally! That’s your customer, not you!

10. In B2B we have a Multi-Layered Buying Behavior as well Environmental Factors (economy, demand, interest rates, etc.) Organization-specific factors (vision, structure, etc.) Interpersonal Factors (authority, interests, etc.) Individual Factors

11. The value chain is spreading around the globe Different Culture Speed Manufacturing costs Hierarchies Regulations Currencies Etc. etc. etc.

12. Business in a hypercompetitive market environment Competitive Advantages are of temporary nature only (product life cycles are getting shorter, flexible business strategies) Strike & Counterstrike Actions 4 Arenas according to D’Aveni Cost and Quality (Coke vs. Pepsi) Timing and Know-How (First Mover vs. Follower) Strongholds (UPS vs. FedEx) Deep pockets (big player vs. small player)

13. The solution to hypercompetition: market knowledge If you are selling equipment to IDMs … … you’d better try to find out the needs of these guys as well!

14. B2B Sales/Marketing Strategies

15. SAD BUT TRUE … Customers don’t want to see Salespeople anymore! John M. Coe Mc Graw-Hill Book, 2003 Marketing is the way to make them call you!

16. Your Customer has a Lifecycle – the CLC CLC = Basis for CRM + KAM Getting a potential customer's attention = MARKET teaching them what you have to offer = SELL turning them into a paying customer = FULLFILL keeping them as a loyal customer who urges other customers to join the cycle = CARE The repeat customer is your best marketer!!!

17. Do you know who are you selling to? Geoffrey A. Moore, Crossing the Chasm, Marketing and Selling High-Tech Products to Mainstream Customer (revised edition), HarperCollins Publishers, New York, 1999

18. Strategies to cross cross the chasm Early Adopters : Driven by a dream – take high risks to achieve a rent (ROI) of high magnitude Achieve leadership in specific niche Assembly Invasion Force by thinking through your customer’s problem Differentiate with your elevator pitch Cross the chasm with direct sales Early Majority: they won’t buy from you until you are established & you can’t get established until they buy from you. REFERENCES PATIENCE

19. 1 out of a 1.000.000.000 sales consulting advises in B2B Get your value figured out, it is most important to your success Decide who fits your model, who are your best prospective customers Understand your strengths, and focus on them Focus on asset-based thinking rather than deficit-based thinking Prospect to warm leads and more probable-prospective customers Grow your alliance network like a big web, and nurture it often Appreciate existing customers and learn from them Create systems and tools to track revenues, profits, expenses, and other metrics Get great at selling - overcome the "selling is bad" mindset Creatively build products, services, and the business as a whole

20. From my point of view it comes down to: Technology Focus Market Focus Customer Focus Core Competence Differentiate (or die) (Jack Trout) Customer Value (in max. 2 sentences) Your personality Your skills Your attitude

21. Industrial Marketing during a recession Spend time marketing to the people you already know Spend time marketing to prospects who are ready to buy Include customer references, reviews, awards, and other validation to convince risk-adverse buyers Align Sales and Marketing. Today's prospects start their buying process by interacting with online marketing channels long before they ever speak with a sales representative. Sales delivers revenue and Marketing is a cost center (?) - change these perceptions especially in a recession! HESITATION

22. Purchasing Process in the investment goods industry

23. The classical purchasing process in organizations Organizations are purchasing in order to: Increase revenue Decrease costs Conform to regulations The organization usually runs through 8 phases in the purchasing process

24. Addressing each phase in the purchasing process Noticing Demand Make them aware of the demand Describing Demand Get involved in the description Specifying Product Make him specify your product Supplier Screening Tell him what to screen for Collecting Quotes Find out his parameters for the deal Selecting Supplier Again, show competence Fixing order details Price is only a small portion of the deal Evaluating Performance This was a battle – win the war! COMMUNICATION!!

25. Short Excursus to Key Account Management USER: he registered demand & he defines the specification INFLUENCER: he is a specialist and will be called in for important decisions PURCHASER: He negotiates conditions – he is the clerk and not the decision maker DECISION MAKER: he relies on its specialists and knows nothing about the product. He is the one that judges the value and signs off. SUPPORTER: he is your internal pipeline to hidden information. Varies between initial & repeated purchase! You are selling to a GROUP of people!

26. 1. Noticing demand -> Make them aware of the demand It’s important to know the capabilities of the potential customer in relation to the one’s of its competitors Make them aware of the fact that your solution provides a competitive advantage to his product & service By decreasing his production costs By increasing his output By improving his quality By boosting his status in front of his customer / his competition TOTAL COST OF OWNERSHHIP

27. TCO – Total Cost of Ownership Value-to-Customer: what is the REAL value of your product – individual from customer to customer! The purchasing price is just a small portion – what are the running costs??

28. 2. Describing Demand -> Get involved in the description The description of the demand is the basis for the product specification If you can not fulfill the product specification you are out of the race At this stage it is essential to establish personal contact with the person in charge (for the investment goods industry it is mainly the technician) There are always more than 1 solution for a given problem , let him describe it the way that your product is addressing it The description is the main part of the investment proposal that will run through a signature loop within the company

29. 3. Specifying Product -> Make him specify your product This is the most horrifying part in the process Your goal is to make him create a “lock out” spec, so let him specify items, that can only be addressed by your product That’s the phase where you have to link the technicians of your customers with your technicians Give him options

30. 4. Supplier Screening -> Tell him what to screen for That’s a done deal if you did your job during specification You know exactly your competition and thus the potential supplier for your customer Often, there is not just an alternative product available but also an alternative solution You have to know your potential competition vertically AND horizontally

31. 5. Collecting Quotes -> Find out his parameter for the deal How far can you go? Give yourself enough room to tumble! 3 Strategies in the investment goods industry “ Free Demo” “ Conditional Demo” Regular Deal Money up front After Sales Obligations

32. 6. Selecting Supplier -> next to last move: “Check” The catwalk – you NEED to be the one that differentiates “ Is there anything else I can help you with?” Innovation History Financial Situation, Ownership References, Sustainability Problem solving capability, reaction time etc

33. 7. Fixing order details -> Price is only a portion of the deal Payment Terms Delivery Time Acceptance Criteria Service Obligations Framework Agreements possible? Legal Issues !! Agreement on Testimonial etc.

34. 8. Evaluating Performance -> Last move: “Checkmate” Lasting of competitive advantages

35. International B2B Strategies

36. The essence in International Business The Ricardo Model You can never change a culture!

37. Affordable Loss and Opportunity Costs International Sales Strategy upfront is not wise – start local! If there is no local market – get a trustworthy international partner! If there is no good partner Don’t enter the business Use the internet What is your affordable loss considering: Cultural Risk Control Risk Exchange Rate Risk Legal Risk Service Risk Economic Risk What else could you do instead?

38. Principal-Agent-Theory in international B2B Sales Whenever one individual depends on the action of another, an agency relationship arises. The individual taking the action is called the Agent . The affected party is the Principal . Typical for local sales representatives Agent want to maximize commission and minimize workload (you can not proof!) He wouldn’t share all customer information with you, you wouldn’t share all deal information with him.

39. Enterprise 2.0

40. How we are going to work in the future? New Business Models will evolve mainly because of the world is getting REALLY flat (see T. Friedman!!!) Demographics Technology From Command & Control to Coordinate & Cultivate Connecting people is the enabler (“we are one”) But it will be difficult to teach a machine the principles of this side of our brains 

41. The main reasons to get involved in Web 2.0 Enterprises will have to implement more and more Web 2.0 Technologies in order to provide the framework for the problem solution competence of the future workforce

42. Web 2.0 – The participation Web Web 1.0: Webmaster is administrating web site, users are accessing data Web 2.0:

43. Catching the long tail for niche segments – a business? Costs to reach the long tail (the niche segments) in traditional marketing are enormous, because demand in local areas is too small – but it isn’t globally! Selling less to more, but still – quality is key Democratization of resources (e.g. wikipedia) Democratization of sales (e.g. amazon, ebay) Reduction of sourcing costs (e.g. amazon reviews)

44. Simplification combined with functionalism Transparent and self-regulating Markets => Quality over Quantity REVIEWS

45. Personal Experience

46. Some Notes from my old trousers Speed is trump !! Learn to be patient, always smile  Don’t get choked about anything Be different but stay credible The money you have is yours! Refuse the sale before signing a bad deal Try to think like your customer Strategic Marketing is the key to success

47. Selling 101 in B2B Herwig Kirchberger Mail: [email_address] Mobile: +43 660 810 2493 How to crack the industrial buyers nowadays