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Episode 80 – How to Get Big Accounts [when opportunity knocks for a big deal]

Aug 15, 2018

This Episode

Mark Stephenson & Marc Vila

You Will Learn

  • How to close a deal with BIG company
  • How to deal with multiple decision makers
  • How to persuade people to work with you and not your competitors

Resources & Links

Episode 80 – How to Get Big Accounts [when opportunity knocks for a big deal]

Show Notes

When the phone rings or the email comes in from your typical customer;
– Local Cheer Squad
– High School Principal
– Small Business Owner

.. you know that 9 times out of ten you’re talking to the person that makes the decision. If this person likes you, what you have to sell and your pricing.

What happens when a big company calls and many more people might be involved in the decision. Consider the below questions to ask:

How are you going to make the decision on which company to go with?

What’s most important to you?
– Quality
– Delivery speed
– Price
– Reliability

How are you doing this now? Where are you getting this now?

Why are you making a change (if it applies)?

Is there already a house favorite? Who else are you considering?

How does the decision making process work?

Who makes the final call?
– Purchasing
– President
– Production manager

Other than a good price, what do you need from me to help make that decision?

When will a decision be made?

Tip: Get all the stakeholders involved as early as possible
Tip: Get all the information FIRST, then quote
Tip: Ask the “house favorite” question – remember, this person may be just trying to justify going with HIS/HER favorite and you need to find that out to change their minds.
Tip: This may be a long process – always schedule a time to follow up after every stage

Transcript

Welcome to the Custom Apparel Startups podcast, your best source for information, news, tips and tricks to get you off the ground running, and earn success with your custom apparel decorating business. So, get ready to soak up some knowledge!

Now, here are your hosts, Mark and Marc!

Mark S: Hey, everyone! Welcome to episode 80 of the Custom Apparel Startups podcast. My name is Mark Stephenson, from ColDesi.

Marc V: And Marc Vila here, from Colman and Company. Today, we’re going to talk about big accounts. Specifically, we’re talking about how to get big accounts, when opportunity knocks for big deals.

Mark S: That’s a great title! But I feel like we should just take a moment and recognize that it’s episode 80, because I feel like I should tell a story about before refrigeration, where the milk guy would come and deliver milk or ice, or something like that.

Marc V: It’s a good amount of episodes. If this is the first time that you’re listening, you can feel free to start here, if this is relevant to you. But there’s a whole lot of other episodes out there to listen to, so I recommend you kind of scroll back, and you find -. I don’t think it got good until like 20.

Mark S: Really? I think episode seven was one of our best. I don’t even remember what that was about. I just like that.

Marc V: I just picked that number. Actually, even since episode one, I think they’ve all been great, and they’ve had their right place. We’ve just gotten more experienced.

Mark S: It’s true. That’s very true.

Marc V: Today we’re talking about big accounts. We’re talking about when you get a phone call from a fairly large organization, maybe in your area; a University, the electric company.

Mark S: Water.

Marc V: Yeah. Somebody that’s significantly bigger than you. Not just a company where the owner is calling you, but a company where they probably have a Procurement -.

Mark S: Purchasing Department.

Marc V: They have a Purchasing/Procurement Department, where actually there’s somebody who calls and gets quotes, and there’s multiple people involved. You have to figure out how to properly handle that, because it doesn’t matter how much the purchaser likes you, often.

Mark S: As a matter of fact, if the President or the owner of the company is calling you directly, it’s by definition, not going to be that big of an opportunity. Right? Because if they have time to call, then they’re not running that big of a company.

I will tell you a couple of things. The first thing is why we’re talking about this today. What inspired this today is that ColDesi, we’re a pretty big company in this business. But a year ago, we started in the UV business, as well. If you haven’t seen our incessant emails on the Compress UV printer and what it can do, you should definitely look at that, because it’s an amazing machine. It does a lot of different stuff.

But we’re getting the attention of some very big companies. By big, I mean international sporting goods companies that you would recognize the name.

And we’ve been learning that – you know, most of the time we’re talking to folks like you, that it’s a small shop, or you’re just getting into business. Or maybe you’ve got kind of a regional online fulfillment business. You’re our customer, right now.

Marc V: 100 employees or less, within that range, which is probably a lot of your customers, as well. If you’re listening to this podcast, more than likely you are about to start, or you own a custom apparel business, and you probably have less than 100 employees yourself, and your customers probably have less than 100 employees.

Mark S: Right. Normally, when you call us, whether it’s for a Digital HeatFX system or a DTG printer, or something like that, we know that we are talking to the person that’s probably going to make the decision, or that person’s husband. It’s going to be one or the other. Maybe it’s a small group.

That is a pretty good conversation to have, because we know that everything we tell you is going to go into the decision-making process. All of the videos that you see, and the literature that you read, and the podcasts that you listen to from us, they’re all going to you, the decision-maker that’s going to decide what they’re going to do next.

Marc V: Yeah. It’s like yourself and a business partner, or there’s three people. Or maybe the owner isn’t terribly involved; however, they rely heavily on maybe the two or three of you that run the business.

Mark S: Right. But if the University of Tennessee calls, or if the world’s biggest hockey stick manufacturer calls, now you’re on the phone with the person that somebody else told to get the information.

If you’re dealing with a big University, and you get an RFQ or request for quote, for 1,000 or 1,200 shirts every 90 days, the person that sent you that quote is not making the decision. Right? They’re not going to be the one that says “Yes, I’m going to do business with you.”

Because someone told them to go get that information. And the person that told them to go get that information might be gathering that information for somebody else. So, it’s a much more complicated process when you’re dealing with a big company, kind of related to the opportunity.

If somebody is going to buy one machine, one piece of equipment, they’re going to buy a dozen or 50 custom t-shirts, the person that you’re talking to is making the decision, usually. If somebody is going to buy 1,000 a month, then probably you’re not talking to the person who is going to make the decision.

Marc V: And one of the first steps is kind of determining that. Even though they are a really large organization – it gets complicated. I think the first step might just be kind of figuring out who is making the decision. The reason I think that is because there are really large organizations, multi-international organizations that subset out. They subset and subset and subset out decision-making.

There’s divisions of Coca-Cola that operate locally here, that decisions for a lot of the things they do, including promotional items, are made on a local level. So, when they’re calling up, even though they work for Coca-Cola, and that’s who is going to write the check, they really are just operating a shop that is 50 people or less.

Mark S: That’s a good distinction. Right.

Marc V: So, you need to make that first – “I know it’s a big brand, it’s a big company. Are they making a decision like a big company, or am I just talking to the person who has the credit card in their pocket, and they have to make a choice?” So, probably the first step is making that first rift on, even though they are a big company, how are they making the decision?

Mark S: Right. And that goes to this list of questions that you should ask, if you have a big opportunity in front of you. One difference is if you get a small company that’s interested in buying a dozen shirts, you’re going to do your best to get that order, while they’re on the phone.

If you get a large organization that is looking for a large quantity of clothing, you kind of want to slow down that process as much as you can, because you want to collect a lot of information before you send them a sample or give them a price.

One of the first questions that you’re going to ask is -.

Marc V: We’ve got a great list here!

Mark S: Yeah, definitely. Is “How are you going to make the decision on what company to go with?” What is it? Is it going to be the price? Is it going to be the quality of the shirt?

Marc V: The delivery time?

Mark S: Right. Is it going to be delivery? Is it none of those things, and it’s just availability of you personally, to help if there’s a problem? Maybe customer service is their hot button.

Finding out some of these things, like you had said kind of when we were talking about it. Like the University of Tampa has bought hats before.

Marc V: Yeah. If you’re talking with a large organization, a big company, and they contact you because maybe you’re local to their area. When they did a Google search, they found you, or they saw a sign. Or you know them.

You kind of know somebody within the organization, if they were networking, or a friend of a friend. They’re “Oh, yeah. I know somebody that’s in Purchasing for this really large company. I’m going to give them your information.”

So, they contact you, but it’s not the first time they’ve bought shirts. It’s not the first time they’ve bought hats. But they are speaking with you again. Why? Maybe every year, they have to get three quotes, and they’re always going to go with that first person.

Mark S: It’s so disappointing when that happens. I think we see that a lot, on the Custom Apparel Startups group. A new business comes in, and they get that call from a local school system that wants you to outfit all of the employees for the county schools.

The immediate question is “What should I quote? This is what they want.” Well, why are they sending this out to bid? Because like Mark said, it’s not the first time that they’ve done this. So, what happened?

Are they required to get new pricing every year or every two years, or whatever the cycle is? Are they just using you, so they can check a box, to say that they got three quotes? In that case, you don’t want to spend any time on it at all.

Marc V: Yeah. It’s kind of just “Oh, I have to get new pricing.” And you find out. The thing is, when you’re talking to some of these people, especially when you’re dealing with a request for a quote or an RFQ, you can deal with a very cold-fronted person. “I need to get a quote on this.” “Okay, what -?” “I just need to get a quote on it.”

One of the best things you can do is, this person probably knows a lot of this information. They’ve made this decision before. They’ve seen other things. They’ve got everything in front of them. They’re holding all of the cards in their hand.

They know that they can just call companies up and say “This is all I need. I don’t know that. This is all I need.” Most of the time, after the second wall put it, you assume it’s not going to be broken down, and you just go and spend hours and hours trying to make a quote.

Mark S: What’s the best price? Calling SanMar, “What’s my price on 500 polos a day?” Things like that.

Marc V: When you never had a chance. What you need to do is you have to try to break the wall down on that person, a little bit. Slow the conversation down with them. See if you can build a rapport. Empathize with them.

All of the things that we’ve talked about in other podcasts, get the information from that person. If they just turn around and say “Oh, yeah. We’ve used the same company for ten years. We just have to get new quotes every year,” chances are, if they used the same company for ten years, they probably have a relationship.

Mark S: If nothing’s broken.

Marc V: Nothing’s broken. That company probably has ingrained in a really low margin, more than likely, on this product. They’ve got all of the designs done, so they can afford to do it cheaper. There’s a lot of things to consider.

So, you’ve got to kind of put that on your mind. When do you just not waste your time on it?

Mark S: Right. You get that RFQ in, and you start asking these questions, before you give somebody a price. Maybe the first one is going to be – you can tailor this to your own personality and your own methods – “How are you doing this now, and where are you getting it done?”

You can even say it just like Marc Vila did. You can even say “Obviously, this isn’t the first time you’ve bought shirts.”

Marc V: Yeah, that’s great.

Mark S: “It’s not the first time you’ve bought shirts. What’s making you go out, looking for a new vendor?” It could be he says “Well, we have to do it.” “Okay, I understand.” Then, you can go and take a different tack, if you find out that they really are just checking a box.

Maybe “Okay. Does it really matter what I quote you? Are you pretty much going to go? Is it really a cheapest price thing? What are the other factors that might win me the business?”

Marc V: One thing I was thinking about with that is you really have to find out the things that are really hot, hot reasons to get excited. When they say “How are you doing this now?” “We were using the same company for ten years, and they just went out of business.” Or “We were using the same company for a while, and last year we had so many quality control issues, we have to find a new vendor.”

Or “Yes, our Sports and Athletics Department buys a lot of things from the Sports and Athletic shop, but when we requested a quote for some of these other items, they kind of said that wasn’t what they do.” Maybe they’re looking for full-color t-shirt prints, and their only screen printer, they stop at six colors. That’s kind of the max they do. Anything beyond that, they’re not set up, so they turn that business away.

You’ve got like a DTG or a Digital HeatFX system, and you can do full color. That’s why you’ve got this opportunity.

Mark S: There are four things you just said that would cause me to be excited, because now you’ve identified opportunity where you might be able to leverage yourself in the business. The more information you get up front, the more likely you are to win, to get a new customer.

Marc V: So, the first question should be, as we mentioned, “Who is making the decision?”

Then, the second question we said so far is – did you say even how they’re going to make the decision, yet? Did we talk about that?

Mark S: No.

Marc V: I know that’s on the list, but the second one we said was “How are they doing it now?” I think next is “How are they going to make the decision?”

Mark S: I agree.

Marc V: Talk about that. What do you think?

Mark S: There’s two questions here. One of them is, what I mean by “How are you going to make a decision?”, what I really mean to say is “How is the decision going to be made?” What’s the process? What happens?

I’m going to give you a quote. Then, what happens?

Marc V: We know step one is they call up.

Mark S: Yeah. “You’re looking for a price. Are you going to ask for samples? What is your process? Do you get pricing, and then order samples, and compare quality? Do you take the prices in a stack, and you go up to the President of the University, and he goes through them and just picks the lowest number?”

Both physically, how is that decision made? What’s the process? And who is going to make it, in the end? So, you can be prepared in advance. Because if you ask that question, if you ask “What’s the process for making the decision?”, then you’ll start to identify the people that are going to be involved.

Marc V: And take notes on all of this stuff. We’ve talked about having a CRM, just as a side note, on other episodes, so having a place where you can take all of these notes. You should ask all of these questions, and note them vigorously, with every detail you can, so you can really analyze it.

Mark S: Yeah. So, what’s the process, and who is going to be involved in that process? If, for example, there’s the Purchasing Manager. You’re talking to the Purchasing Manager, and you’re looking up the Purchasing Manager on LinkedIn and Facebook, to see if you’re connected in some way at all.

You find out that it’s going to go to the head Purchasing Manager.

Marc V: Some sort of levels of management.

Mark S: Yeah, levels of management. You want to identify all of those people, if you can, and what they do, so you can figure out different ways to appeal to them.

For example, if you’re going to need to submit a sample, and that’s part of the process, now you can submit a sample with the University logo on it. But if you look, and you find out the Purchasing Manager went to school there for Philosophy, then you can do a University t-shirt, with the Philosophy Department.

If you know that it’s going to go to the Sports Committee, because they decide on all of the apparel at the University or the college or wherever it is, then you’re going find out “The Sports Committee, here are the two people in it. They both played football. Now, I’m going to tailor my sample.”

So, you’re looking for these little areas of differentiation. You need this information, in order to get those.

Marc V: It also comes into the information, like if they mention quality control was an issue, which is why they’re looking to possibly change a vendor now, because last year, it was quality control. See if you can find out what that was.

The question may go like this; “Okay, great! I sell apparel from t-shirts that go for kids’ birthday parties, that are basically throwaway shirts, that people wear like once, and then they wear them as smocks, to paint, all the way up to premium Nike polos that are $80 apiece. So, I sell this level. What was it about the quality control, that wasn’t satisfactory?”

They’ll just say what it was. It might be something great, that you know you could easily fix, like the design was just poor. The colors weren’t right.

Mark S: It washed out, after one wash.

Marc V: Or the digitizing in the embroidery was a poor quality, not the shirt. “All of the shirts were puckered, on our embroidery.” You can find that out. Or they might say all of the shirts shrunk.

So, you know this information, and right away, you know the level of apparel you have to sell. If they say “Yeah, we had Adidas shirts last year, and the quality of the embroidery wasn’t as nice as we wanted,” you know that you can go ahead and quote them an Adidas, a Nike, and maybe a generic similar option, if you wanted to give them a few options.

Then, you could note in there, like a quality guarantee or a wash guarantee. “If the design puckers after a wash, I know how to embroider it correctly.” Things like that.

Mark S: I like that. If they do kind of identify, like if you ask them about how the decision is going to be made, or “What’s most important to you?” is another way to say that. If somebody says quality, or you’ve already identified that as an issue, you can kind of guide their process, too. Ask them the question “Well, I offer a variety of different price points of shirts. Are you going to ask all of the people that submit quotes to send you a sample, so you can verify the quality?”

Marc V: Yeah, encouraging the sampling process is something that can benefit you.

Mark S: You’re also saying that if he wasn’t going to do that, then they are now, because you’ve identified quality as being very important. The only way that they’re going to be able to know that is if they get a sample, and you’re the person that introduced that.

Marc V: Too often, what happens in any business – this isn’t just for us – but when you are not used to doing this, or you’re new into sales, or you’re a bit of an amateur in the small business world, what happens is somebody calls you up and asks for a price, and you just give them some sort of a price, whatever it might be. And you have no clue what they’re looking for.

Your favorite, most popular shirt might be a t-shirt that’s like a $5 shirt, which is on the higher end of cost for a blank shirt. But that’s your favorite shirt. That’s the one that you like to sell. Your customers love it the most.

However, this particular customer might be trying to find that throwaway type of a t-shirt. They’re just trying to find something very inexpensive, for a short run. “What can I get, a short run, that’s just a really low price?”

So, you’ve got to kind of find exactly what they’re looking for, before you throw out that price. Before you throw out a quote, period. That’s kind of the bottom line.

Mark S: Even if they do identify the decision is just going to be made on price, which is that first guy that you described calling. That’s what they’re going to tell you, is “I’m just looking for the lowest price.” Then, you should say that back to them.

“So, you’re asking me to quote you on the cheapest shirt that I can possibly find, and decorate it with your logo in the cheapest possible way? That’s what your decision is going to be based on, is how cheap I can find a shirt, and how cheap I can make it?”

If the answer is yes, and you’re listening to this podcast, odds are you are not going to win. There’s always someone that will sell a cheaper shirt.

Marc V: There’s always someone that will sell a cheaper shirt. Also, this is so much dependent on your area. You should really, at this point in time, if you don’t yet, you need to know who is your competition in the area, typically. Who’s got big accounts?

If you go and you stop in to shops that have storefronts, or maybe they don’t have a storefront, but they’re in a warehouse. You go and you visit these shops, and you take a look. You just find things out. You find information.

If you go out to networking events, you find out who do they use. If you’re hearing a shop a few times, and you find out this shop has a 12-color automated heat press, in 150,000 square foot warehouse, and they typically bid on these large jobs.

Well, if it’s a single one-color design, or something like that, it’s going to be tough for you to compete with that, compared to when you know that they want high color, short run. That’s why they’re calling. “We need to get 50 shirts. They’re going to be different every week. They’re going to be pictures of things. They’re going to be digital images. So, we need 50 shirts a week, for the next five years.”

You need that information, to know if you can even compete.

Mark S: Another scenario is, let’s say it’s a utility that wants polos for its employees, and you have a single-head embroidery machine, and no way to outsource it. So, you don’t have that relationship.

If someone comes to you and wants a huge number of polos with their logos on it, and matching hats, and they want it delivered within six weeks, you can do the math very quickly, and find out “Am I realistically going to be able to do that?”

Then, you can decide right there, not to spend the time trying to sort of micro-analyze the cost of your hourly rate, and how much you’re going to make on the shirt, and how many stitches it is, and try to figure out how long it is. Because you know just in general, “I’m not ready for that job yet.”

Marc V: Another thing, this is also an opportunity for you to, if you don’t currently have an outsource relationship, when a job doesn’t fit what you can do. That’s not always necessarily the quantity of the garment, but the type of print that it is. This is also an opportunity for you to go out and try to find a partner to outsource with.

I’ll tell you, in the years being in this industry, absolutely there are customers who came, who bought equipment from us. The reason they bought equipment from us was because they were doing really big jobs for, say the local school district, or something like that. They didn’t own any equipment.

They had the opportunity to bid. They went and got a bid, they marked it up, the percent that they felt was good enough for them to do business. And they ended up winning the bid. Now, they’re coming to purchase equipment later, maybe because when they do the short runs, they can’t bid it out to that place.

They can’t shop it around. They need short run stuff. They’re still going to outsource, or they’re looking to get two two-heads and two single-head embroidery machines, because they’re ready to bring it inhouse. So, use this opportunity to hone up your skills on outsourcing, if you haven’t done it yet.

Even if you don’t get the bid, it’s a great opportunity to go out there, get the quote, write it up, and get some experiencing doing it.

Mark S: I kind of like that word “fit.” I mean, it’s great to be asked to the dance. Do you know what I mean? It’s wonderful to be nominated. But you really want to make sure, before you take on a large opportunity.

Part of that process that we’re talking about, where you’re talking on the phone with somebody or you’re exchanging emails with somebody, and you’re asking all of these questions, this is kind of an interview process for both of you, to see if you’re a good fit. Because what you don’t want is you don’t want to get a job from a large organization, and then not be able to fill it properly.

Because really, it will do a couple of things. It will kill your cash flow, and it could really hurt your reputation in the community, especially if you’re in a small or mid-size town, and everybody works for the utility. And you screw up that job, “Oh, geez! You did that job? I washed that shirt once, and it came right out!”

Marc V: Yeah. If the local paper factory is within a 100-mile radius, and 20% of the people work there, and then you’ve got the opportunity to bid for this job, you need to do everything that we said above. And there’s nothing wrong with realizing when it’s also time to turn it down.

There’s one large screen print shop. You call that company up. “I’m going to try to outsource this.” You call the company up, and maybe “Oh, this order sounds familiar!” Then, you kind of put two and two together.

Mark S: Everybody in town got this quote.

Marc V: Yeah. And then, you’re “Okay.” You contact them back. “I see that you might be working with a couple of these organizations,” or something like that. “I think this is a better fit.” Or you just kind of refer it out to somebody else. You pass it along, and you say “But this is what I can do.”

Mark S: “Please keep me on your list, by the way. Definitely, call me next time, as well!”

Marc V: And take all of these as an opportunity to sell something else to this organization, that would be a great fit for you. If you get the quote in, and you’ve got one DTG printer, one heat press, one embroidery machine, whatever it is. You’re a fairly smaller shop, and you get an order in that’s huge, so you go through all these steps.

You maybe try to outsource it, and quote it out, and you find out that you’re not going to get it. Or you just find out that you don’t want to take this.

Mark S: Yeah. It’s not a good fit.

Marc V: “I can’t outsource to anybody reasonably, for the cost that they’re looking for.” Which by the way is another thing, to just ask them if they have a price that they’re trying to reach. Sometimes, they’ll just tell you.

But after that, now you pitch – you already know who else there makes decisions on these things. Then, you can turn around and say “You know what? I can’t do this job for you. I’d like to respectfully decline this, because it really doesn’t fit what my niche is, the products that I do. However, what I would love to do is send out a sample of some of the things I am great at, and some kind of pricing on that, and send you a couple of samples.”

“I see so-and-so and so-and-so also make decisions. I’d like to send a little kit maybe to each of you.” If you’ve done some good research ahead of time, like you mentioned.

Mark S: You can tailor samples.

Marc V: You can do some tailor stuff. So, if you are the small shop, and you get the big opportunity. If you’re the really big shop, or you’re getting to be a big shop, and you’ve got a lot of different equipment, you’ve got multiple heat presses, and you can handle this stuff, then this is your time to shine, and you’ve got to outpace everyone else.

Mark S: Yeah. And you still need to go through this process, by the way. If you’re a huge shop, this is even more important for you, because you need to make sure that you’re a good fit, so you keep getting these kinds of opportunities.

What we’re talking about is, again, is how to deal with big opportunities that come in, the difference between dealing with a potentially large account, and the typical kind of small and mid-size account that you might be dealing with.

When you’re not dealing with the decision-maker the first time, you get them on the phone. Perfectly appropriate. You get the call, you get the email. You get an email. It’s an RFQ for a large opportunity. You pick up the phone and talk to them.

Say “Hey, listen. Before I quote you on this, which I’m excited about doing, I’d love to ask you a few questions, and make sure that my company is going to be a good fit.” The guy can’t help but say okay. They’re not going to say “No, I’m not going to do that.”

Then, you start down this path. “Well, tell me how you do it now. Why are you making a change? How does this decision-making process work? Who else is going to be involved in making the decision? Is there a house favorite, already?”

“If you’re just using me because you have to get a quote, I understand. But I’d love an actual chance at getting the business. What do I need to do, to do that?”

Marc V: And then, what’s most important? The quality, the delivery time, the price, the reliability, the ability to do a specific type of decorating, the ability to have a specific finish, washability? Is that most important? Or is that not as important as just the quality of the garment?

They know that the shirts are going to get beat up, but they want the garment to hold together. The design is going to get scratched up, no matter what we put on it. But if it shrinks the first time, that irritates a lot of the folks.

Mark S: You may even find out that this big company has been dealing with another big company, and they just don’t like it. They’re not getting the customer service.

Marc V: It could be customer service, definitely.

Mark S: Say “Great! Your headquarters is like five miles from our business. I will load those shirts in the back of my vehicle, and I will come and deliver them in person.”

Marc V: And definitely maintain a professional type of – it goes without saying, but maintain a professional demeanor with these organizations. Find out what they’re looking for.

“Okay, is this something that you’d like to set an in-person meeting for? Because I do that for other organizations that I work with, as well. I bring some samples out. I show them to all of the folks who are going to make the decision.”

You have to find this information out. You have to really just know as many facts as you can. And any question that pops into your head, you’ve got to ask it. Then, ask it again. If the answer they provide you with doesn’t really answer it, ask it again in a different way. But the information is going to be the key for all of this.

Mark S: I like that, asking things in a different way. We’ve kind of restated the same questions in different ways, since the podcast started. But just something like “Other than a good price, what do you need from me, to help you make a good decision?”

What you’re saying there, implicitly, “I’m going to give you a good price. I may not be the cheapest price. I’m not going to be the most expensive price. But what else do you need from me?”

Marc V: And when you’re doing this, it’s important to understand and have done some of the homework that we’ve talked about in previous podcasts. But knowing how much it actually costs to run your business, knowing the lifetime value of customers, and factoring your time in, as a cost, whether paying yourself or however you’re doing it.

Factoring in your cash flow, on what it’s going to cost you to bring this in.

Mark S: Opportunity costs. If this is going to take you 20 hours a week, are you going to pass on other jobs that you would have been doing in those 20 hours? Do you have to bring on extra help, to fill this job? Are you going to need to maintain the equipment?

You’ve got to think about bringing more supplies in for this job, on an ongoing basis, and keeping that on the shelf. You have a lot of things to do, especially if this is your first big account. You’ve got a lot to think about, before you just say “Oh, my God! How cheap can I sell this for? Here’s my price.”

Marc V: That’s part of the challenge with the pricing, is people ask how to price. Every business has to operate within a certain percent margin, or a certain percent profit, that works for their business. Right? And that’s different for everyone.

For Colman and Company, for example, we’ve got live people on the phone, live chat. We do fast delivery on everything.

Mark S: It’s expensive to do.

Marc V: Yeah. It’s expensive to do some of those things. So, the particular amount that we have to make has to be able to afford to do that. And your business has to be able to afford to do that, too.

So, if your business is run out of your home, and it’s just you, your cost of operation, you’ve got opportunity there, compared to somebody who just opened up a new boutique in the mall. You go to a mall, and the reason why you go to a mall, and the t-shirt could be $40 for a single – I mean, there’s a store here that’s $40 for a black shirt, with a front and back, for one of them.

You post that online, on the CAS group, and people “That’s crazy! Nobody would ever pay that!” Well, they’re in the mall.

Mark S: It happens all the time, actually.

Marc V: For one reason, there’s a different customer there. And the other reason being is they have to be able to make that money, to be able to stay in the mall. So, you’ve got to determine what margin can you work off of, that you can afford to do all of the things you want to do.

You mentioned opportunity cost, and all of that. Then, quote on that margin. It doesn’t matter what anyone else on forums says they quote at. It doesn’t matter, any of those things. This is what you have to do.

If you send that bid out, and you put value in it, you may or may not get the business. But if you do not get the business because of the price, well, that’s what you needed to make. You couldn’t have done it.

Mark S: You could have dodged a bullet! I think I’ve told this story before, about occasionally, if some of our customers are struggling, and they think it’s marketing, Sales will refer them to me and you, to talk to them about ways to market their business.

We’ll take a look at pricing and everything. We’re glad to do stuff like that for you guys, too. But this one customer had a Digital HeatFX system, and he was in a small town, with one big company. He had gotten this system specifically to fill orders for this one big company, and a couple of smaller ones.

There was a screen printer in town, that was selling shirts for $8 apiece, to this company. This guy had gotten some of that business, and basically he couldn’t make his lease payment. He couldn’t make his lease payment, which was only about $300 a month.

The reason is because he had matched that screen printer’s price. So, they were doing a one-color shirt, selling it for $8. This guy was paying like $2.50 for the shirt, and $2.50 for the transfer. And it took him a certain amount of time to do it. So, he was literally breaking even, if he did not include his labor in this deal, every time he did it.

He was so frustrated. He couldn’t figure out why he wasn’t making money. It was because he had priced out the clothing incorrectly. He didn’t have the help he needed. He didn’t have the equipment that he needed, to respond specifically to that quote.

He didn’t call anybody to outsource it, looking for a better price. He didn’t ask these questions, like “How are you going to make this decision?” “Well, I’m going to make the decision because I’ve been buying $7 shirts for the past 15 years. I’m going to keep doing that.” Okay, pass!

Marc V: Yeah. I can’t make any money.

Mark S: But his biggest mistake was never doing the math, before he said yes. So, it’s not like we want to encourage you not to do these big deals. We want you to be in a position to do them profitably, where you can say yes confidently, knowing that you’re going to make some money.

And you’re not going to be able to do that, without doing this upfront work, for a big opportunity.

Marc V: I think that if you start to do this upfront work, and you realize that “With the equipment that I own, this is right for me. I can do this. I’ve been waiting for this.” Then, you need to make sure that you get your math right, get your margin right. Get it down, because you know that other folks out there are going to go slim on that margin, especially if it’s really large.

So, slim that down to where it’s still profitable for you, and it ‘s worth the time to do it, and then go. Go hard after that.

Let them know that “Before you make the final decision, could I have the courtesy of a call, or letting me know if you’re not going to choose me, what that reason might be, and if there’s anything I can do to remedy that? Because I’ve asked you a lot of questions, but some of the things here, I still have to make assumptions on, because I don’t know what else you’re getting quoted on.”

If you get that opportunity to get that call back, and they say “Hey, we’re looking at another company, and the reason is –. They’re going to do the same shirt. They’re going to the same thing, except you’ve got a $200 set-up fee every time we want to redo an order, and they said they were going to waive that for us.”

You do some math, and you say “You know what? For this customer, I’m doing my margin. My margin was here, now it’s going to be here. You know what? I’ll do this deal, with that.” And you get that opportunity.

So, do that math, and know that it’s probably going to have to be slim, but it has to be something that’s profitable.

Mark S: Or maybe you go through this whole process, and you learn that it’s not the price that’s really their driving factor. So, everyone else is quoting the cheapest thing that they possibly can, but you send them a beautiful high-quality polo shirt with amazing embroidery, and a matching cap, with all of that personal kind of information that you found out about everybody.

And they just decide to go with you, even though your quote is higher, because it was the quality, and no one else asked that question.

Marc V: Which is so true. We’re trained to think that price is everything, right? Because that’s what billboards are, 99 cent hamburger, $5,000 off MSRP on a car, zero percent interest, everything. You’re trained to see that low price, and you’re assuming that.

However, there’s a lot of high-end car companies that are in business doing very well. In fact, doing better than the cheaper car companies.

Mark S: it’s not because they sell cheaper cars.

Marc V: Yeah. They’re doing better than the cars that sell cheaper. You also find that a lot of our customers that are extremely successful, and have been consistently successful for years, they make sure that they’re making money on their deals, and they’re not selling shirts.

Mark S: They’re good at math.

Marc V: Yeah. They’re good at math. They do math. And when we talk to somebody who is like “Oh, yeah. I’m doing this DTG shirts, and I sell them for $4 apiece.” Then, you turn around and -.

Mark S: I think we’ve had that conversation, too.

Marc V: Yeah. I do math, and I’m just like “Hmm. What’s the trick, man? What’s the trick? Because I’m doing the math here, and the most you could make is this.”

Mark S: “What do you do for a living?”

Marc V: “Oh, that’s what I’m getting started with.” Again, these are all things. Actually, one gentleman said “I can afford to do them now, because I’m not quite breaking even. I make a little bit of money, but what I’m doing this for is the opportunity, because I’m making tons of connections. And the other shirt, I sell custom shirts, so it’s a lifetime value type of a thing.”

Mark S: That’s math, too.

Marc V: It’s math, the lifetime value of the customer. So, this podcast isn’t just about how to do this. But it’s about you have to understand the things that we’ve talked about in all of our other podcasts.

Mark S: Yeah. We did actually a good podcast on how to beat the competition by being different, not being cheaper. So, that’s a good one to look for.

One more point that I’d like to make is if you do engage in this process, you should always schedule a follow-up, or know when the next step takes place. If you’ve identified the process, you’ve talked to whoever your primary contact is, you’ve found out that it goes through these steps, if you have to send samples or not.

Or it just goes to committee, or the Homeowner’s Association has to meet, whatever it is, that you know when you should follow up, and you should schedule that. It’s great when somebody remembers you, and they remember to call when a decision is made, because they really enjoy giving you bad news? No.

Most of the time, it’s going to be “When are you going to decide?” “I’m going to decide by the time school starts.” “Okay, great. That’s September 4th,” or whatever it is. “Can I call you on September 6th, to go over your decision? Because I’d like to find out if I won, and if I didn’t, maybe I can do better next time.”

Marc V: Yeah. That’s great.

Mark S: So, schedule every everything. “You’re going to take it to this person? Great! I’m going to call you the next day, to find out how that went, and just see if there’s anything else that I need to do for you.” That kind of thing is a good process to go through, when you’re going after these bigger deals.

Marc V: You’re building rapport with that gatekeeper type of a person, as well. It’s important. That’s why I said if they’ve got walls up, try to break them down, because they will have a level of influence on this decision, whatever that might be.

Even if it’s just they’re going to print everything out, and they put yours on the top of the pile. It could be anything like that. We don’t know.

We can probably blast through some of these questions again, because I want everyone to write this down, consider this, and make sure that this is more than just a phone call and a price. Don’t forget that.

Mark S: That’s not a recipe for winning.

Marc V: It isn’t. Some things that we add here, the things you need to know; “How are you going to make the decision for what company to go with?” Know what the criteria is.

What is most important? The quality, the speed, the price, the reliability of the garment, the type of garment that’s produced, the type of decorating that’s being done, whatever it is. The options, whatever they are, you have to find out what are going to be one or two or three of the key decision-making points.

How are they doing it now? They probably are doing it now, or they did it last year, whatever it is. How did they do it? How did that decision get made? How happy were they with the results?

Mark S: “Why did you make the change?”

Marc V: is there currently a house favorite? Do they just have to get quotes, but they use the same company, and they’ve been using the same company for 25 years? Things like that. If there is a house favorite, why are they getting quotes? Find out why.

Go ahead and just ask them questions that are bold, that you think they might not answer. Because we had a note here, “Who else are you considering? Is there a price you’re trying to get to now? Is there a price you paid last year, that I can take a look at what you ordered?”

“Do you have an old quote you can send me, so I can compare what I can do? Because what I might be able to do is offer you a better value.” That doesn’t mean a better price. It means a better value.

Mark S: And this may or may not be okay, for the Purchasing Agent that you are talking to. Some Purchasing Agents might say “I can’t do that. I’m not allowed to.” And some people might say “Yeah, no problem. Here you go! It will make my life easier, because you’ll see exactly what we’re talking about.”

Marc V: Absolutely. When I worked in sales, if I knew they were shopping around, I definitely would just ask. And I would say almost half the time, if not more, “Oh, yeah. I don’t have a problem doing that.”

A lot of people don’t mind throwing the chum in the water, and watching the sharks go around. “Yeah, I’ll send you my quote. I’m going to send them yours, too, by the way.” “Okay! Let’s do it, then!”

Mark S: That’s my second least favorite analogy.

Marc V: What’s your first? The biker?

Mark S: It’s the biker. You walk into the biker bar, and you see a girl.

Marc V: I don’t know if I came up with that one.

Mark S: You did. It wasn’t me.

Marc V: No, it was the gentleman, the marketing and trademark. Wasn’t that his example?

Mark S: I think it was yours.

Marc V: We’ll go back and listen.

Mark S: Okay. The next one is you have to know how the decision-making process works. Just ask them that, and then let them tell you. “I decide.” “We get all the quotes, and we throw them up in the air, and we pick the one that’s on top.” “We go for the cheapest one.”

So, “Is it you that’s saying yes or no? Does it go to a Purchasing Agent? Does it go to the department head? Can you kind of break that down for me, how that happens?”

Marc V: Yes. And then, when will the decision will be made? Find out when it’s going to made, so you can make the phone call to follow up, or whatever it would be.

One additional thing we didn’t mention, that popped into my head, was if this is coming over the phone or via email, if you could ask for an in-person interview with all of, or more than one of, the decision-makers, you’ve got an opportunity to impress them. Because oftentimes, again, decisions aren’t always made on price.

Sometimes, decisions are made on price, but then you get to change the game of kind of what the standard is. The cheapest thing that they could absolutely do would be to not buy t-shirts, and just get markers, and write it on the guys’ chests, for the football game. Right? That doesn’t exist. They have shirts.

Well, they don’t actually have shirts in a football game. They have jerseys. They don’t actually have jerseys. They’ve got specific types of jerseys. It’s like there’s levels up, so you’ve got the opportunity to go in there and kind of change the game.

Mark S: I love that, because if you get to talk to more people in the process, you may get the directive from the person that you first talked to, that sent out the RFQ, that they’re just looking for the cheapest shirt.

Then, if the question to the next person up the chain is “So far, I’ve been instructed to quote the cheapest thing that I can find, to put your logo onto. Is that really what you are after? Because I can do that, but I had some other ideas.”

That person might say “What are you talking about?” If the second person in line says quality is really important, then all of a sudden, everyone that Purchasing Agent talked to beforehand is now kind of out, because you’re going to quote them on a higher quality shirt, and everybody is going to know that it’s not going to be the cheapest.

Marc V: Also, another really important thing to ask is what is the budget? Do they have a budget that they have to hit? That’s such a simple one, but “What’s the budget? What are you trying to spend?”

And then, my turnaround. They might say a number that might turn you off right away, or they might send you a number that you’re like “You know what? I could do some really awesome stuff with this budget.”

Then, in the quote, you quote them the shirts, but you also quote them some hats or some koozies or some coolers, or other promotional items you might sell, that still fit within the budget, as add-ons. Then, they choose you, not necessarily because the shirts were the best price or the caps were the best price.

But you’re the one that also offered the can coolers or whatever it was, tote bags. They just automatically pick you, because “Let’s go with this company, because they also do this and this, too.”

Mark S: That’s a great point. I wish we would have done it sooner, because most of the people that are listening to this podcast have already stopped listening by now. Usually, they get about 20 minutes in, and that’s when they drop off.

So, we save all of the good stuff for last, just so you know.

Marc V: Just for the good people.

Mark S: Even if you do get somebody that requests a quote on price, and that’s how the decision is going to be made, but you do decide to participate anyway, because you can handle that deal, don’t be shy about amending the quote, and adding those extra things, as well.

Because maybe they weren’t thinking about getting hats. Or maybe they hadn’t considered koozies and coolers. Or maybe that’s part of a separate process that you’re not being offered, because you have “t-shirt” in your name. So, you might have a bigger opportunity, or an opportunity for more.

Maybe they would really love to deal with one person that can do all of these things. You get a request for t-shirts, and you also, by the way, put a couple of prices down for caps, for koozies, for bags, for the other stuff that you’re good at.

Maybe at a little bit higher margin, still. You might end up with that [inaudible 50:04].

Marc V: That’s great. And then, don’t forget at the very end, if you feel that you can’t do the job, or the job is not a fit for you, take this opportunity to outsource to another company. “Here’s the other things that I do.” Can I outsource this job? Is there a company that I can kind of be an affiliate for, where if I get them the job, they’ll pay me a percent for the sale?

“Do I just straight out deny it, but then try to go in for other opportunities in the future, or that might exist right now?” Don’t say “Ohhh, there’s no way I’m going to get this bid” turn into a disappointment, and a failure of your business. Turn it into an opportunity to either learn how to outsource, learn how to affiliate, or learn how to upsell to a customer that might not have thought about something.

Mark S: I love that! Because if you can establish a relationship there, then you’ve got a relationship with a big organization that maybe you can’t help now, but you will be able to help in the future. I like that a lot.

Marc V: Absolutely. Plant the seeds.

Mark S: What I like about this episode, I think, or let’s say the points that I would like people to take away from it, are; when you get a big opportunity, slow down. You don’t want to react to it immediately. What you want to do is collect as much information as possible, like we described.

You can think about the opportunity, look for ways to give yourself the best advantage, in order to get that opportunity. But get the information one way or the other in the end, so you can decide yes or no, whether or not I actually want to go after it.

And then, what’s your best strategy to win?

Marc V: And if you do decide to go to social media or forums or Facebook, and ask groups how they would do it, and you get answers, remember that there are tens of thousands of people, hundreds of thousands of people that do this, that quote on this type of work, even if they’re not in your industry. Millions of people.

Four people are going to respond, and if two of them are discouraging, well, let them be the ones that lose. You listen to podcasts like this, do other research online, whatever you can.

If you get a couple of people that say “Oh, yeah. I’ve got such-and-such company, which is similar, in my area, and I did the shirts for this dollar amount,” and you look at that and you’re like “I could never sell it for that,” okay. That’s not the company you’re bidding on. That’s not in your area.

Never let online forums blow you up too much. Don’t let them shrink you down too much. If you choose to go there, use them as a tool. Everything that we’ve said, use it as a tool. Put all of the knowledge together, and go for it, because you’re the only one that can win that deal.

Mark S: Yep! It’s your business. I think that was good!

Marc V: Alright! Very good, then. It’s time to wrap it up. Let’s encourage people to do some things.

Mark S: Okay. First of all, I would just like to say that this episode has been sponsored by the new embroidery grip, from Colman and Company!

Marc V: Very cool!

Mark S: We now have the ability to – there’s a hooping device that will allow you to grab a sneaker again, and customize a sneaker. So, if you’re an embroiderer, and you’re up against that big deal, then maybe you can offer some embroidered sneaks, and that will be a winner for you!

Marc V: That will be the thing that will take you to the next level!

In the past few days of messing around with it, I went in there, and I embroidered a shoe. I unclipped it, and I put a baby bib, and I did that, and I unclipped that. Then, I put a tote bag on, and unclipped that. Then, I put a karate belt on, and unclipped that.

So, I did four designs in a row, back to back from each other, just switching out the design. All I did with the hoop was just make adjustments to the width, how wide the design was. That was it! It’s a really cool device, and it’s really well made, too.

Mark S: Yeah. You should look at it. Okay! Thanks for listening! This has been Mark Stephenson, from ColDesi.

Marc V: And Marc Vila, from Colman and Company.

Mark S: You guys have a good business!

 

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