ºÝºÝߣ

ºÝºÝߣShare a Scribd company logo

Buying Decisions Are Moving Higher In Organizations What Why

•
•
H
hlemke114

1) Buying decisions are moving higher in organizations as senior management more closely reviews large purchases and projects due to reduced revenues and cash flows. 2) The document recommends focusing sales efforts on high priority prospects and projects that demonstrate value and cost justification, which are more likely to be approved by senior management. 3) Gaining access to senior executives early in new opportunities and helping existing champions make the case for priority projects to their managers increases the chances of project approval.

1 of 2
Download to read offline
What & Why – Strategy – Part I “Buying/Purchasing decisions are moving higher in organizations! Part I WHAT do I do? Why do I need to change what I’m doing today? By Dan Lemke, the Vision Group o If projects have not undergone formal Recent information in the news3, our own Value/Cost Justification they are now management experience, and feedback from our required to have that work done. clients indicate decisions for large $ purchases are o Senior management in many cases will being reviewed by higher levels of management, ‘roll-up-their-sleeves’ and undergo a committees, and in some cases the CEO/President careful examination of major projects. level. The reasons (The WHAT & WHY) are o Recent articles1 indicate only high numerous, and if understood can help us decide what priority investments/projects are allowed to do and how to deal with opportunities in this to continue. economy to succeed: So, WHAT do we do & WHY do we do it? Reduced revenue means reduced cash flow. In order to preserve profit levels (or to minimize As discussed in previous newsletters and in our profit decreases) all departmental spending is workshops with sales representatives and senior being reviewed for potential reduction. management the following are what we recommend in any economic environment. In today’s economy Large projects/investments are placed under these items are even more important for us to be review and/or are re-examined. successful: When managers and project leaders hear this 1. WHAT - Ensure we are pre-planning our from senior management they stop and review revenue generation activities to focus on ‘high their spending/projects and determine if/how to priority’ prospects or customer projects. proceed with budgeted projects or new projects pending upper management approval. This WHY –High priority and/or high VALUE causes delays in approving projects. projects to the prospect/client are more likely to be approved. In certain circumstances senior management will change how decisions are made for major 2. WHAT – Review all of your sales projects to purchases. Oversight committees or senior determine if Value/Cost Justification has been management review of all projects greater than a done WITH the clients/prospects and if not, certain $ expenditure will be examined and in initiate this activity with your client/prospect as many cases RE-Justified. soon as feasible. RE-Justification by senior management and/or WHY – You and I already know, based on many committees will look at some or all of the articles and 3rd party studies that following to either bless, delay or eliminate an projects/investments with cost/value justification investment/purchase: are more likely to be approved. Senior o Re-Prioritization of capital investments management will prioritize investments and will (CARS*) in light of economic conditions. make tough decisions about which ones will live, This may take time if multiple be delayed, or die an unmerciful death. (Googling departments are involved in assessing Value Justification = 12,000,000 hits, & Cost the impact of the economy and revenue Justification = 6,600,000 hits…it’s on every generation. senior executives mind today!) o Is it Cost/Value Justified in light of re- prioritized projects? Some projects may 3. WHAT – In new opportunities attempt to gain be red-lined for extensive review or access as high in the organization as possible to outright elimination in light of the begin your sell/buy cycle. Prepare your account economic conditions. strategy to focus on what may be the HIGHEST priority ISSUES (remember Psychoeconomics – buyer’s value loss twice as much as gain2). 1 100 Parkers Lake Road, Wayzata, MN 55391 USA • Phone: 952-475-1475• Fax: 762-592-7943 E-mail: dlemke@visiongroupmn.com Web:http://www.visiongroupmn.com
What & Why – Strategy – Part I 4. WHAT – In existing opportunities, gain access WHY – to higher level executives as quickly as possible • In new project initiations >80% of the time (we are assuming you have helped lower level senior mgt. is involved t early to set mgt. uncover VALUE in your project). If you are strategies, objectives and priority to the unable to gain that access prepare your project (see Figure 1). This means they may Champion or sponsor with compelling allow themselves to be available to sales information for senior management. personnel in the initial stages of a purchasing decision (During Phase 1…see the article on WHY –Senior management is re-prioritizing and HOW and WHEN). evaluating projects. It becomes imperative that • As previously discussed senior management we help our champion/sponsor be a winner in the is re-evaluating projects for priority. Getting eyes of their manager(s). access and helping them identify high priority issues to focus on increases your More on this subject in future newsletters!! probability of success. Even, if your products & services don’t historically have value Tips and Tactics for the HOW/WHEN on this justification that reaches senior management subject. (historically the CEO of your projects decision is at the department level) it is still important to help the department manager Dan Lemke raise your project to his/her highest priority. Senior Executive Involvement in the Purchase Decision 80% 80% 80% 60% 60% 44% 20% 20% Understand Set Establish Set Explore Examine Plan Measure current vendor objectives strategy options alternatives implementation results issues criteria EARLY MIDDLE LATE PHASE IN THE PURCHASE DECISION CYCLE Selling to Senior Executives A white paper written by: Alston Gardner, Stephen J. Bristriz, Jay Klompmaker – Kenan-Flagler Business School, University of North Carolina Figure 1 1 In a downturn, Provoke your Customers by Philip Lay, Todd Hewlin, Geoffrey Moore – Harvard Business Review (www. Hbr.org) 2 CNN Money - Psychoeconomics - Date/Issue: JULY 1995 VOL.24 NO.7 Section: COVER STORY 3 Smart Selling in Tough Times – John Kratz, Ken Jondahl, The Vision Group, March 2009 – Duluth Business Expo *CARS (Capital Authorization Requests) 2

More Related Content

Buying Decisions Are Moving Higher In Organizations What Why

  • 1. What & Why – Strategy – Part I “Buying/Purchasing decisions are moving higher in organizations! Part I WHAT do I do? Why do I need to change what I’m doing today? By Dan Lemke, the Vision Group o If projects have not undergone formal Recent information in the news3, our own Value/Cost Justification they are now management experience, and feedback from our required to have that work done. clients indicate decisions for large $ purchases are o Senior management in many cases will being reviewed by higher levels of management, ‘roll-up-their-sleeves’ and undergo a committees, and in some cases the CEO/President careful examination of major projects. level. The reasons (The WHAT & WHY) are o Recent articles1 indicate only high numerous, and if understood can help us decide what priority investments/projects are allowed to do and how to deal with opportunities in this to continue. economy to succeed: So, WHAT do we do & WHY do we do it? Reduced revenue means reduced cash flow. In order to preserve profit levels (or to minimize As discussed in previous newsletters and in our profit decreases) all departmental spending is workshops with sales representatives and senior being reviewed for potential reduction. management the following are what we recommend in any economic environment. In today’s economy Large projects/investments are placed under these items are even more important for us to be review and/or are re-examined. successful: When managers and project leaders hear this 1. WHAT - Ensure we are pre-planning our from senior management they stop and review revenue generation activities to focus on ‘high their spending/projects and determine if/how to priority’ prospects or customer projects. proceed with budgeted projects or new projects pending upper management approval. This WHY –High priority and/or high VALUE causes delays in approving projects. projects to the prospect/client are more likely to be approved. In certain circumstances senior management will change how decisions are made for major 2. WHAT – Review all of your sales projects to purchases. Oversight committees or senior determine if Value/Cost Justification has been management review of all projects greater than a done WITH the clients/prospects and if not, certain $ expenditure will be examined and in initiate this activity with your client/prospect as many cases RE-Justified. soon as feasible. RE-Justification by senior management and/or WHY – You and I already know, based on many committees will look at some or all of the articles and 3rd party studies that following to either bless, delay or eliminate an projects/investments with cost/value justification investment/purchase: are more likely to be approved. Senior o Re-Prioritization of capital investments management will prioritize investments and will (CARS*) in light of economic conditions. make tough decisions about which ones will live, This may take time if multiple be delayed, or die an unmerciful death. (Googling departments are involved in assessing Value Justification = 12,000,000 hits, & Cost the impact of the economy and revenue Justification = 6,600,000 hits…it’s on every generation. senior executives mind today!) o Is it Cost/Value Justified in light of re- prioritized projects? Some projects may 3. WHAT – In new opportunities attempt to gain be red-lined for extensive review or access as high in the organization as possible to outright elimination in light of the begin your sell/buy cycle. Prepare your account economic conditions. strategy to focus on what may be the HIGHEST priority ISSUES (remember Psychoeconomics – buyer’s value loss twice as much as gain2). 1 100 Parkers Lake Road, Wayzata, MN 55391 USA • Phone: 952-475-1475• Fax: 762-592-7943 E-mail: dlemke@visiongroupmn.com Web:http://www.visiongroupmn.com
  • 2. What & Why – Strategy – Part I 4. WHAT – In existing opportunities, gain access WHY – to higher level executives as quickly as possible • In new project initiations >80% of the time (we are assuming you have helped lower level senior mgt. is involved t early to set mgt. uncover VALUE in your project). If you are strategies, objectives and priority to the unable to gain that access prepare your project (see Figure 1). This means they may Champion or sponsor with compelling allow themselves to be available to sales information for senior management. personnel in the initial stages of a purchasing decision (During Phase 1…see the article on WHY –Senior management is re-prioritizing and HOW and WHEN). evaluating projects. It becomes imperative that • As previously discussed senior management we help our champion/sponsor be a winner in the is re-evaluating projects for priority. Getting eyes of their manager(s). access and helping them identify high priority issues to focus on increases your More on this subject in future newsletters!! probability of success. Even, if your products & services don’t historically have value Tips and Tactics for the HOW/WHEN on this justification that reaches senior management subject. (historically the CEO of your projects decision is at the department level) it is still important to help the department manager Dan Lemke raise your project to his/her highest priority. Senior Executive Involvement in the Purchase Decision 80% 80% 80% 60% 60% 44% 20% 20% Understand Set Establish Set Explore Examine Plan Measure current vendor objectives strategy options alternatives implementation results issues criteria EARLY MIDDLE LATE PHASE IN THE PURCHASE DECISION CYCLE Selling to Senior Executives A white paper written by: Alston Gardner, Stephen J. Bristriz, Jay Klompmaker – Kenan-Flagler Business School, University of North Carolina Figure 1 1 In a downturn, Provoke your Customers by Philip Lay, Todd Hewlin, Geoffrey Moore – Harvard Business Review (www. Hbr.org) 2 CNN Money - Psychoeconomics - Date/Issue: JULY 1995 VOL.24 NO.7 Section: COVER STORY 3 Smart Selling in Tough Times – John Kratz, Ken Jondahl, The Vision Group, March 2009 – Duluth Business Expo *CARS (Capital Authorization Requests) 2