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Back in the day when I was a junior sales representative for IBM we had to go through some rigorous sales training before we earned the right to call on a client. This included 6 weeks at the Dallas, Texas Sales University and watching many 8 track sales tapes in the Cranford, NJ Office. IBM wanted to make sure that before they sent a sales representative to see their client that the rep could represent the high standards required by IBM. Needless to say this training was grueling but effective. I can honestly say that I learned more about how to make a living in sales than my college taught me while earning my MBA.
During this training we learned how to demo the equipment, present features/function/benefits, how to handle objections, how to present, how to trial close, learn the different closing techniques and how to be professionally persistent. We mastered all of these selling skills and most of us went on to become successful sales people for IBM and other companies. Of all these learned skills the one that I was most reluctant to use but ended up being my ace in the hole was Financial Selling Skills. At IBM we called this “Pencil Selling”.
Pencil Selling was more of the science of selling versus the art (i.e. handling objections, building rapport and trust). Pencil Selling was used to demonstrate to a client that it was actually more financially beneficial (aka cheaper) to trade in older IBM equipment for new. Our sales trainers promised that if we used this method with a client that we would significantly increase our ability to close sales.
So what was Pencil Selling? Like the phrase implies we would take out our sharpened #2 Pencil and, with the client, fill out a preformatted form that had us list all of the client’s equipment, it’s age, the depreciation method used (back then there were three – Straight Line, Sum of the Years, and Accelerated), factor in the Investment Tax Credit and the cost of the new replacement equipment. We would then take out our colossal HP or TI Calculators and determine the after tax cost savings, the break even month and the cash flow. As numbers don’t lie the client could see whether this made sense or not.
This all sounded good to me when I graduated from sales school but I guess I wasn’t convinced deep down inside. When I got my rookie patch in Middlesex County, NJ I was finding success by just making many sales calls. I was meeting my monthly quota but I wasn’t closing any whales (big deals). I watched some of the more experienced sales reps get great Branch Recognition awards by closing large deals. I wanted to be a hero too (and make some big $$). I asked these winners what was their secret. Everyone one of them said “Pencil Selling”.
From that moment on I committed to becoming an expert in Pencil Selling. I spent time gathering equipment details on my clients (no Oracle or Salesforce.com then!) and based on equipment age I picked out my Top 10 Prospects for upgrading their equipment. I practiced with my Sales Manager and some of my sales team colleagues and then made my appointments. I was ready!
My first call was with the Office Manager of a large college testing company in Princeton, NJ. I sat down with her and reviewed the meeting objective which was to go over their IBM inventory and show her the path to upgrading the equipment. I was pretty pleased with myself as a glided through the Pencil Selling sheets. Along the way I was seeing that the Office Manager was nodding her head “yes” which gave me a real boost of confidence. I could smell this big sale coming!
When I finished the analysis I then asked her “Can you see the obvious financial benefits of upgrading your equipment now?” To my horror she had a completely blank expression on her face and said “I have to admit, I have no idea what you just showed me.” Thank the good lord this was a very nice lady and she said that because I had obviously put some time into this that my work should not be wasted. While in her office she called the company CFO and said she had the IBM Sales Representative in her office and that I had important financial information for him. He said to come upstairs and he would meet with me.
The end of this sales story is I did get a very large sale as a result and a good piece of advice from the CFO. He said for this type of selling I need to call on the client financial decision makers while maintaining good relationships with my existing contacts.
From that point on I used Pencil Selling extensively and closed more large sales. I made my annual quota objective in September and made enough cash to place a down payment on my first house. There was no turning back now and I committed to perfecting my Financial Selling Skills.
Next Week, in Part Two, I will talk about the development of my first ROI Calculator and my first seven figure commission year. Stay tuned.
Click here to download our free ROI Calculator!Recommend0 recommendationsPublished in Marketing
Carl is correct, for certain types of sales an ROI calculator is a must! All sales people should have this in thier sales toolkit