Below the “C” level are the middle Managers who run the business. This is not always apparent from their titles; I have never been given a business card which has the title “Middle Manager” so you need to be able to position them within the overall organization. Some companies have a position, Chief Operating Officer (COO), which is the man who is usually responsible for delivering this years’ business plan (sometimes a 3 year business plan), sometimes the CEO of a Division of a larger organization is really a middle manager, it is almost impossible to know what a VP does (particularly in Citibank in my experience). You need to find out who is responsible for the part of the organization that you are selling to. The easiest way is to ask the guy you are talking to what his role & responsibility is. This is a specific instance of talking to people about what they are interested in. Most executives are very interested in their role & responsibility and will happily spend a couple of minutes telling you how important they are. Maybe wait for a second or subsequent meeting when you have a fledgling relationship but supplementary questions on “How do budgets work?” or “What does the buying process look like?” or “Who do you report to?” will also give you knowledge you have to get, and will build a relationship. We are definitely getting ahead of ourselves. If the middle manager is responsible for running the business he will ultimately be responsible for delivering aspects of a company business plan that is handed down from the planning and strategy level. The commonest aspect is a Budget. How much money he can spend is always an aspect of a budget. The budget is usually structured into at least three levels:
- Company wide
- Division / or Function specific
- Sub – Division or Sub Function
Most purchases of significant size are made at the Company or Division / Function level. An example of a sub- budget might be that the company knows that it needs certain raw materials or consumables as inputs to some process. A relatively junior executive may have day to day control of re-ordering these commodities from an existing supplier. At best he may be able to justify on price or availability grounds that he buy from you rather than the competition, but you are not going to make your reputation by selling at this level. I have frequently had accounts where this was the main type of business done and I have always sought to just do it efficiently, provide good enough service so that the company will not go away from my company as a supplier (or me as an account manager) but try to optimize my time so that I can either get up the executive ladder within the account to get a larger share of their spend, or to attack a new account. In today’s world if you are not adding value (rather than milking existing accounts) eventually you will have the account taken away from you and given to someone else. If the company becomes convinced there is no further opportunity in the account they will give it to a lower cost channel (telesales or Web Self Service) if they believe that there is more opportunity and you are not delivering it, they will give the account to another salesperson.
Unlike the CEO the Middle Manager probably does spend his days in meetings, conversation and exchanging emails on operational issues and he is interested in the “How” things contribute to his success. Success is a key word. Many Middle Managers are even more insecure about their reputation within the company as someone who delivers than salespeople are. You need to understand that in the competitive world of the Middle Manager each year they are either formally or informally ranked by the “C” level and most want to be in the upper quartile of managers that are potential future “C” level or at least they want to avoid being in the lower quartile who are candidates for downsizing, “outplacing” or early retirement.
There are two scenarios; either the Planning Process of the company has identified a need for a major procurement of replacement or new capital equipment, in which case the middle manager has been given ownership of the procurement and it will be in his interest to run the process well, reach a decision that is right for the business and execute the project well. In this scenario he will be easy to reach, will meet you and you will be given the opportunity to sell to him.
(Health Warning – it is not uncommon that procurement exercises are exercises in compliance, that there is an incumbent or early winner and the process is just “for Show” or rather just to avoid problems with auditors, stakeholders etc.. In this case you need to decide whether you are going to make trouble – usually go over the head of the Middle Manager, or walk away, or put in a form bid without really working the opportunity. How you decide on your response is up to you in discussion with your manager, always tell the company if you believe you cannot win the business, otherwise they will assume you “failed”.)
The second scenario is that you are asking him to initiate a purchase that is not anticipated in the business plan (and is not budgeted for). This is clearly a more difficult sell, but actually it can be more valuable for both you as a salesperson and him as a manager. As a salesman you get to shape the requirements (needs) that will eventually be reflected in the formal procurement process (usually in a Request for Proposal, RFP). The objective here is to ensure that all the differentiation of your product is included in the RFP and underpinned with business value, while the competitor’s products features & benefits are marginalized. If I received a RFP from an account in my territory that I had not been aware of, I used to read it once to check for tell tale competitive slant and 80% of the time I did not bother to respond as it was clear who was supposed to win the evaluation. The value from the Middle Managers perspective is to give himself visibility to the “C” level as someone who has the vision to do more than act as a manager of an existing process / budget and to build a reputation as someone who can see how a change can improve the business (and deliver the improvement by executing the project). This is how you get into the upper quartile pool from which “C” level candidates are selected.
Either way the Value Proposition needs to take into account the dual purpose of the procurement process and implementation project:-
- How it will benefit the business
- How it will benefit him
So a model answer might be:-
“When this is fully implemented” – focus on future state not current problem
“your process / function / division” – create ownership
“will be 20% more efficient” – or however you can quantify the comparison with current performance
“giving you a $ improvement in – company win
“a ROI in 2 years” – company benchmark that must be achieved
“and making your division the – you have to be able to justify, but this is
highest performing in the company” the most powerful statement you can make
to a Middle Manager.
One final thought on organization. All the text books assume that all decisions are top down, which is why you are told to “call high”. Generally true, but do check this assumption. I definitely lost a deal in an account where I lost patience with some middle managers who were “not getting it” and went over their heads to an executive I had a relationship with. Unfortunately it back-fired; the company culture was “middle-up”, the evaluators almost never had their recommendations overturned by the executives. The executive role was to set direction and is this case request middle management to look at and evaluate a solution, but middle managers owned the decision whether it should be done. Maybe 80% of the time decisions are strongly influenced by top executives; but the middle-up model is not as rare as most text books lead you to believe. There is no upside in making an enemy, so keep the middle managers onside if you can.
If you are selling to someone who is responsible for buying a commodity from an existing budget, focus on being as fast and efficient as you can be. As discussed above if you cannot sell yourself up the sales value chain, you will be replaced.