by Jacques Werth
I was riding along with Jim Langworthy, one of the top sales producers in the industry that supplies production equipment to the electronics industry. He was not an engineer, but almost all of his prospects and customers were engineers. I was there to watch him sell.
Jim was meeting with two decision makers of a multinational electronics company. Iris was the Manager of Manufacturing Engineering and Paul was the Product Manager for Motherboards.
Jim started by introducing me as an observer, and then talked with Iris about her background for a while. Then, he reviewed the information about their new capital equipment requirements for manufacturing motherboards that he learned from Paul in a prior meeting. That included all of the specifications of the motherboard substrates, the quantities to be built, and the types, sizes and quantities of all the components that would be attached and connected to the boards.
Iris and Paul agreed that Jim’s understanding of their new manufacturing requirements was accurate. Then, Jim asked, “If I can supply you with the assembly equipment necessary to meet these requirements and also show you that we can meet your conditions of satisfaction, what will you do?”
Iris said, “If you have the best equipment at the lowest price, we will buy all of the equipment from you.”
Jim replied, “That is not what I asked. We all know that you can’t get the best for less. I asked, ‘If our equipment meets your conditions of satisfaction what will you do?’”
Iris said, “Sorry, I thought that might be a trick question. Seriously, if you can meet our conditions of satisfaction, I will authorize Paul to buy your equipment.”
“When will you make your decision?” Jim asked.
“Since we already know all of the other machines on the market, there is nothing to keep us from making a decision today,” said Iris.
Jim said, “In that case we need to discuss each feature of our machine, the benefits of each feature, and the detriments of each feature. Then you can decide whether each of those features add up to a machine that meets your conditions of satisfaction, or not. Does that work for you?”
Iris looked at Paul, who nodded his agreement. Then Paul said, “Are you really going to disclose all of the detriments of every feature?”
Jim said, “Yes. I provide total disclosure and I expect the same kind of candor from you. It is the only way I do business.”
As Iris said, “Agreed,” Jim opened his attaché case and took out a four-page questionnaire. He began with the first feature.
“One of these machines can handle motherboard substrate boards up to 8 inches by 11 inches with a maximum of twenty, half-inch component feeders. Two machines, in tandem, doubles the size of the boards they can handle and the component feeder capacity. Add two more machines with a computerized conveyor belt, and the maximum board size becomes 16 by 33 inches and you’re up to eighty half-inch component feeders.
“The benefit is that you can start small and add capacity as needed.
“The detriments are: a computerized conveyor adds an additional cost of 15% to 20% to each machine; and operating machines in tandem requires more sophisticated programming.”
“Does that work for you?”
Iris said to Paul, “It’s your system, what do you think?”
Paul said, “It works for me. I like its flexibility.”
Iris said, “It works for me, too.”
Jim checked off the “Yes” box next to their names and wrote in their comments.
Then, Jim introduced the second feature.
“The component placement cycle rate is 2400 units per hour (UPH). However, the average actual placement rate is about 1,400 UPH.
“The benefit is that any configuration of our machines produces the lowest cost in the industry for any given average actual placement rate.
“One detriment is that you need more than one machine plus a conveyor to match the UPH of our competitors.
“Another detriment is that configuring a multi-machine line takes up more floor space.
“Is that acceptable?”
Paul said, “I ran the numbers. Adding in our floor space costs and a four to six machine configuration still gives us a 40 percent quicker amortization rate.”
Iris said, “That’s a no-brainer.”
Jim’s third feature was, “If any one of the machines in a line breaks down, you can remove that machine and reinstall the component feeders in the same arrangement on a replacement machine. Then, just load the same program into the replacement machine.
“The benefit is that you can have your line up and running again within an hour.
“One detriment is that you need to buy an extra machine and have it available at all times.
“Another detriment is that it takes a trained mechanic to do the switchover quickly.”
Paul asked, “What is the average down time per machine, per month?”
Jim said, “The downtime average is a little less than one hour per month, per eight hour shift.”
Iris asked, “If we need to send a machine back for factory repair, what is the average turnaround time?”
Jim said, “If you notify us that you are shipping one back, we will immediately ship you a loaner by overnight freight.”
“That definitely meets my conditions of satisfaction,” said Paul.
Iris said, “Mine, too.”
It took another twenty-five minutes for Jim to go through the other nine features, confirming that they met their Conditions of Satisfaction. Among them, there were two that got negative responses from Paul and Iris. In both cases Jim responded, “That is something we cannot change. So, is that a deal-killer or are you willing to accept it as is?”
In both cases Iris and Paul decided that the benefits so outweighed the detriments that their overall choice had to be Jim’s machines.
At the end of the process, Jim said, “Is there anything else that we need to discuss before you make your decision?”
Iris said, “Our Operations Vice President will not allow us to issue purchase orders for production systems until we have seen them operate satisfactorily, in our plant, for at least 30 days. So, you will have to send us a machine to try out if you want our business.”
“I can’t do that,” said Jim. “However, I can accept a conditional purchase order that stipulates that you can return the machine within forty-five days and pay us nothing if it does not meet your specifications. Will that work for you?”
“Yes,” said Iris. “Why don’t you help Paul write up the purchase requisition? That way, I’ll be able to get home by this weekend.”
“I’ll be glad to,” said Jim.
Iris said, “Thank you.”
Jim said, “You’re welcome.”
Jim Langworthy was one of hundreds of top salespeople that I observed, and most of them used a closing process very similar to this one, with total disclosure.
(Update on 14 January 2010 – You can find a description of the Conditions of Satisfaction closing process at www.HighProbSell.com/workshops/CoS_Process.html)