Part III. Win-Win Sales
Dialogue 6. Why Is Sales a Cycle?
As soon as the topic of lessons was announced, the teacher was asked the question, “What’s the point?”
S: Why are you talking about the cycle? Sale is a one-time act. It is even called the “act of sale.” The seller met the buyer, sold him the goods, and they never meet again in their lifetime. What kind of cycle could it be?
T: Thank you for a wonderful question! In the good old days, it probably was “an act.” If the seller was selling a good, reliable product, buyer used it for a long time, and there was no need to meet the seller again. If the product was bad, buyer did not contact this seller again, that’s all. Of course, I do not consider goods that need to be bought on daily basis, such as food or consumables. In this case, the buyer did not come to the seller for negotiations, but simply exchanged money for the goods.
About 50-70 years ago, when the so-called “acceleration in technological innovation” began, the picture of sales started to change. Improvements in goods came faster and faster, the market became more and more dynamic. Moreover, the reliability of the goods began to decline steadily. This was a necessary measure to reduce the risk of stocking and overspending of resources. Once upon a time, shoes on polyurethane wedges were the hype. Polyurethane was technologically advanced, easy to process and beautiful in appearance. But it was also a wear-resistant material! And then a catastrophe erupted in Europe: mountains of almost new polyurethane soles were in a landfill. Polyurethane could neither be recycled nor destroyed! The style of shoes quickly went out of fashion, the upper part was completely worn out, and the sole was as good as new. That is what the excessive reliability of goods leads to in our time.
S: And what does all this have to do with sales?
T: As it turned out, it had the most direct impact on sales. The buyer needs to buy more and more. At the same time, while buying presumably the same product, he actually each time buys something new. Accordingly, on the new terms! So, every purchase became a negotiation.
S: Well, why? When you buy a phone, you buy a phone again, not, say, a TV. When you buy a car, you buy a car again, not a plane. What does the negotiations have to do with it?
T: Well, yes, buying a phone, I buy a phone every time. But compare what capabilities the phone had 5 years ago, and what they have today. I’m not even talking about the fact that you would hardly have bought today a phone produced 15 years ago, right?
Cars, as well, change from year to year, much faster than it was, say, 40 years ago. The set of capabilities that would satisfy you 15 years ago will not suit most of you today.
So, buying a phone or a car today, you are actually buying a new product, not like the previous ones. The service is changing, too. And again, you need to negotiate with the seller on the “price to capabilities” ratio.
S: How does this affect the transition to the cycle?
T: With whom is it easier for the seller to negotiate, with new buyer or with the returning one?
S: Difficult to say. But theoretically, of course, it’s easier to negotiate with the returnee.
T: How could you convince him to return?
S: Well, if he returned, he, probably, expects a bonus for loyalty.
T: That is, a bribe.
S: Why are you saying that? This is a loyalty bonus.
T: Who will pay for this bonus? From whose wallet?
S: Well, of course, from the seller’s wallet.
T: That’s my point. So, this is a bribe for loyalty. The same phenomenon could be called differently, but its nature does not change with name. Call a bribe a bonus, does this change its nature is some way? No. It will look more acceptable, however. That’s the whole difference. Such a renaming is nothing more than a form of deception, kind of “political correctness.” Here, we are trying to understand the nature of phenomena. Therefore, we call things by their proper names. Are there other ways to convince the buyer to return?
S: He will return, probably, if between purchases he was well served, if seller helped him, kept in touch with him.
T: Exactly. If seller maintained good relations with him. Here it is, the missing element of the sales process that closes it into a cycle. Previously, the seller did not care what happened to the buyer after buying his goods. It did not make sense to establish and maintain any relationship with buyer. Each act of sale was considered as the first and last in the relationship between seller and buyer. No continuation. And therefore, a fraud during the sale was acceptable, in the form of both manipulation and persuasion. Concessions were also acceptable. They were made so that the seller did not lose on them. The initial price of the goods was simply overstated. If there is no prospect in a relationship, then everything is OK. The goal is to sell, “shove down the throat.” Well, when it became clear that customer loyalty has a price, then sales gurus started talking about the relationship between the seller and the buyer, that the returning buyer became much more valuable than the new one. That’s when the act of a sale began to turn into a sales cycle.
S: Why do we still see disloyal relations between sellers and buyers?
T: It is tales that are quickly spun, deeds are sooner said than done. Many sellers still do not want to notice the importance of relations with customers. They see customers as “disposable objects.” Customers, seeing this attitude, also prefer to look for a new brand each time, hoping that it is slightly better than the previous one. Most often, loyalty rewards the brands of those companies that invest effort and money in maintaining this loyalty. Experience shows that these investments are paying off. But this experience, alas, does not teach others anything.
Selling is a repeating and reproducing process of exchanging values in society. And since this process is repeated, it is best described as a cyclic model. This process is not only repeated, at every turn it goes to a new level of understanding, professionalism and artistry.
The sales cycle is described in Nikolai Rysyov’s book Active Sales.
Having accepted the structure of the Sales Cycle as a whole, we will try to fill it with a new understanding based on simple thing: win-win sales.
Step Three: Build a Solution | 13 Dialogues on Win-Win Sales | Dialogue 7. Sales Philosophy and Negotiation Strategy