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hi guys again Johnson from driversuccess.com today we're going to talk about OEM sales and what I'm talking about when it comes to OEM sales I'm talking about making a sale to an original equipment manufacturer okay and anytime you're doing a sale to an original equipment manufacturer you're dealing with multiple decision makers in terms of the sales process so we're kind of covering two topics here um I mean when it comes to selling to an oem you could be selling uh customized industrial finished good A specialized design what have you but at the end of the day you're trying to sell into an original equipment manufacturer because you know that an oem is going to bring the volume to the table okay typically oems don't you know make a decision to purchase unless they've done all of their research and they tend to want to stick with the same vendors and becoming that incumbent supplier is not easy but when you win their business you're ultimately in a position where they're basically going to spec you into their to their overall finished assembly okay and you aren't going to get uh maybe a supply contract a yearly renewable contract is going to come back every single year as long as you do everything right so what I want to do today is I want to just basically Define how this is different from most sales okay and the first thing I'm going to talk about is how one of the biggest mistakes that a lot of sales people make when it comes to working with an oem account is that typically what they do is they quote and then they sell now you're probably saying what the heck is happening well the problem is is that what they'll actually do is they'll actually get right down to quoting a product okay and they'll actually submit a proposal right off the bat you know say yes we can do this and we can do that and this is what you're looking at so they'll go ahead and they'll give them a quote number let's say 1701. all right now the problem with quoting right away and then trying to sell is that an oem is going to systematically take that quote add and subtract throughout the entire process bring on an original equipment manufacturer is not a short sale cycle it is a long and exhausting sales cycle and it is a long process and I have seen a lot of sales people that go in and they quote and then they try and sell and that's the biggest mistake because they go from quote 1701 rev a to rev b or F C rev D rev e all f it goes all the way up to h j and what they're doing is the OEM gets the price and then they start playing a game take this off add this subtract that and then just go through one revision after another by the end of all of this sales person is looking at razor thin profit margins and he's basically lost all credibility so instead of quoting and then selling what you're going to do is you're going to sell negotiate sell again build consensus and I'll get to that in a minute and then you quote essentially what you're going to do is long before you ever get to an official quote now put that in print in parentheses or an official quote long before you ever get to an official quote we actually put down the dollar value down on paper you're going to do all of these things you're going to sell them on your capabilities you're going to sell them on your value proposition but long before you give them an official quote you're going to eliminate all of these issues that are coming up here if you were to have quoted first okay so instead of quoting and then selling it is sell negotiates sell some more build consensus and then quote and why do you need to build consensus well the reason being is because you're dealing with multiple decision makers okay if you're trying to penetrate an oem account and you're selling to just purchasing you're finished you're not going to get anywhere if you're just dealing with engineering you're not going to get anywhere if you're just if you're just focusing on a project manager you're not going to get anywhere okay so there are multiple decision makers now why is that because the decision to integrate your sub-assembly part into their larger integrated assembly or their larger finish good the decision to integrate your customized solution into their equipment is a big decision and it affects their entire business okay it affects purchasing it affects Finance in terms of the terms that you offer it affects Engineering in terms of the change in specs and the design that you're offering uh it affects the sales people the the actual sales people that sell the equipment for the oems okay you're gonna either you might be increasing their cost how is the sales person going to be able to go out there and make that sale so when it comes to multiple decision makers what you're ultimately looking at is you're not just looking at you know the buyers and the and the purchasing people okay and purchasing you're also looking at engineering okay you're looking at Finance okay you're looking at project managers managers okay maybe the sales people that actually sell that equipment themselves maybe uh product managers what have you all right maybe you're working with draftsman okay and finally you're working with an owner CEO a director But ultimately there are many decision makers in this and the reason why you've got to work with all of them is because all of them have a say you know you're selling a product that's going to be integrated into their equipment every single one of these guys has a say in something and that's the reason why you have to identify who they are because part of your job is to build consensus you want each one of these individuals to buy into your Solution by addressing each one of their individual concerns okay and there's a lot of information you can get from each one of these guys you may not be able to get from the other for instance you know I I was working on a project recently and I just joined a company and I've been a Director of Business Development and for the past eight months I've been working on trying to penetrate an oem account and I was struggling with price because I knew we were priced out of the market we were a little bit too high and so what I ended up doing was was speaking to a salesperson to actually sells the equipment and just having a discussion salesperson the sales person where do we need to be and that's a discussion that I can have with someone like that because an oem is not going to give you all the information about their budget they're not going to do that I mean purchasing is not going to tell you where you're going to need to be engineering doesn't want to get involved in purchasing decisions Finance doesn't want you to know anything all right so there are certain people that you have to get information from in terms of how you penetrate an oem account so you have to deal with multiple decision makers if you're only dealing with one of these guys you're finished okay now the third thing you have to do is you have to understand that you are negotiating you must negotiate okay absolutely don't capitulate let me tell you something about oems oems want vendors who are here for the long term they don't want to deal with someone who's going to be here today gone tomorrow they expect you to negotiate in your best interest they expect you to come to the table and negotiate and negotiate in your favor they're going to be very apprehensive of someone who just capitulates and hands over everything to them because they're going to start to question why you're willing to do that all right so don't do it understand think about how they perform their own negotiations they're probably very tough in negotiation you know don't don't be so tough that you can't get the sale but don't give in make sure you define exactly what you need in terms of let's say liabilities on inventory for inventory okay or terms payment okay which is why you got to deal with Finance okay so just be ready to negotiate and the fourth thing I want you to focus on building value all right now you focused on cost per use benefits all right and what I mean by this is you just longevity benefits what I want you to focus on is what value are you bringing to the OEM aside from just the price of your product now going back to that example I gave you earlier about that company I was trying at the OEM that I was penetrating or trying to get into I knew right off the bat that we were pricing out of the market so rather than talk about price off the beginning I started talking to them about doing some analysis and some tests to show them the capabilities of our product I wanted them to see that first before we got anywhere near you know discussing pricing okay so very quickly when you're selling to an oem it's not quote then sell okay you put an official quote down on paper they'll have you jumping through hoops Excel negotiates sell build consensus with all these decision makers identify who they are don't be afraid to negotiate okay you're there to win business but they want to deal with suppliers who are here for the long term and finally Define that value what are you bringing to the table okay what cost per use benefits and Longevity benefits if you're 30 more expensive than your competitor but you're gonna have you know 50 percent increase in efficiency what does that mean to your customer so that's it oam sales multiple decision maker Sales ianjohnson Drive success.com bye-bye