How To Sell When the Supply Chain Is Broken

How To Sell When the Supply Chain Is Broken

With sanctions from the war in Ukraine and unprecedented demand coming out of the pandemic, the global supply chain mess that started with COVID is only getting worse. This has created a whole new set of challenges for business leaders, salespeople, and teams, who must deal with a new wave of shortages, shipment delays, rising prices—and the customer frustrations these bring.

It stands to reason that salespeople question whether they can continue selling given the persistent customer frustration issues. We believe they can, but only when they possess an agile and resilient mindset towards overcoming customer concerns, whatever they may be.

The Modern Buyer

Before we take a closer look at supply chain issues, it's important to first understand the thought process of modern corporate buyers. Every customer a salesperson services is also a consumer, and as consumers, our expectations around delivery have been largely reshaped by our experiences with a single company: Amazon. Ten years ago, people had no choice but to patiently wait for online orders to be delivered. Today, Amazon has over 200 million Prime members who have come to expect delivery in two days. Some products can even be delivered faster. Groceries from Whole Foods can sometimes arrive within a couple of hours! And between order and delivery, we can track the status of the items moment by moment, culminating with a receipt of the delivery via email or text.

Ralph Waldo Emerson said, "The mind, once stretched by a new idea, never returns to its original dimensions." So, it should come as no surprise that the consumer mindset is now seen at the negotiating table across nearly every B2B industry.

If business customers now expect that if they can source an overseas item relatively quickly for a personal purchase, then why wouldn't their much larger corporate purchasing department be able to do the same? Conversations surrounding shipping and delivery are commonplace for most salespeople. It's amazing the transformation when even the most stringent buyer decides they want a product. They suddenly want it as soon as possible. Everything is fine when the supply chain is intact, and products are arriving without delay.

That's not to say that salespeople have never dealt with supply chain issues. This has always been an objection for sellers to overcome, even before the pandemic. Many industries have long experienced the supply impact of the Chinese New Year, which only lasts for a week but usually results in factory and port closures that last for about ten days. Thankfully this type of closure can be anticipated, so while it can create issues for some customers, it usually doesn't affect all industries and customers.

The world salespeople find themselves in today is anything but status quo. Global supply chain issues have salespeople facing incredible pressure from customers. One salesperson told us that he's not putting any effort into obtaining new business because all his attention is fixed on trying to keep the existing business he currently has. 

While it's true that some industries have it harder than others, in our opinion, the leadership in an organization plays an even greater role. When a salesperson doesn't think their managers have their back, a breakdown in communication and a drastic drop in productivity are sure to follow. We'll talk more about that later.

International Manufacturing

It's surprising to discover how many products are made overseas or have a component made overseas. China, arguably the dominant player in the global manufacturing stage, is currently the United States’ largest goods and trading partner. The US had a $285.5 billion trade deficit in 2020, meaning we purchased $285.5 billion more from the nation than they purchased from us. The last decade has also seen a large rise in goods from other Asian countries like Vietnam, Malaysia, Thailand, and India.

The desire to outsource manufacturing overseas began sometime in the 90s when companies realized they could reduce production costs by partnering with foreign manufacturers who could produce the same items significantly less. Before the pandemic, companies realized that this mindset was akin to robbing Peter to pay Paul since outsourcing production meant they were also outsourcing control over deliverability. The world learned that although China could manufacture products for less, unexpected shutdowns caused by floods and other natural disasters could arise and would be very costly.

Disruption Multipliers

Then, in 2020 another unexpected disruption occurred. China tackled the Covid-19 epidemic with a zero-tolerance strategy, which they maintain today. The strict measures led to large-scale lockdowns and factory closures throughout the country. Some factories tried to remain open using "closed-loop" management. According to Reuters, "China's 'closed loop management' process is akin to a bubble-like arrangement, in which workers sleep, live, and work in isolation to prevent virus transmission." 

Despite these efforts over the past two years, many factories are still only able to maintain a fraction of their normal production due to delays caused by other factory closures and another byproduct of the pandemic: trucking delays. As a result, sales forecasts among some companies are looking bleak; we heard of one that is predicting zero sales for this April and May. "We need somebody in the warehouse and the manufacturing facility to do the work, and we need a truck and a driver. These are the two key components, and both are impossible," lamented the CEO of a construction materials manufacturer. The normal rate to book a truck from Shandong province to Shanghai quadrupled from 7,000 yuan ($1,100) to 30,000 yuan. Shipping containers that move via ocean freighters have seen similar increases. Then they face US port bottlenecks for unloading.

Production issues were then further compounded by another unexpected cause for concern—the war in Ukraine.

Ukraine provides between 45% to 55% of the world's supply of semiconductor grade neon, which is used to manufacture the chips found in electric cars and devices. The war has brought that production to a rapid halt, stranding cars and other products throughout the nation as they wait on "a chip." Sanctions placed on Russia magnified the already growing delivery issues. The Russian railway, which was heavily relied upon to transport manufactured goods out of China, is no longer an option for US companies. 

Shipping goods via air is an alternative shipping method (when there is product to ship), but it drives up the cost, which companies must either absorb or pass on to their customers. When salespeople thought things couldn't get any worse, the United States' ban on Russian oil led to even greater price increases as the nation watched the price of oil peak at over $110/barrel near the outbreak of the war.

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Two Keys to Sales Success

So what can salespeople do to combat all of this? Our book Agile & Resilient: Sales Leadership for the New Normal outlines strategies salespeople can follow to continue selling despite global supply chain issues. All the points revolve around strengthening two foundational attributes a salesperson must possess: trust and value.

We define trust in sales as when a customer believes that a salesperson is credible and reliable and places the customer's best interest over their own during the sales process. A LinkedIn survey concluded that only 32% of buyers view salespeople as trustworthy, while an astounding 88% of the same respondents said they would only buy something after trust had been earned. That's a big gap to fill. 

Salespeople should make every effort to understand what actions they can take to build trust. Demonstrating knowledge of their customer's industry and empathizing with their challenges is a great place to start. Following up on verbal promises with dependable action is another known trust-builder. Every sales training has the obligatory warning not to over promise and under deliver because when in a pinch, it's incredibly tempting and easy to create tomorrow's problem with a false solution today.

The second key to sales success is value, and it's dependent on building trust where the customer can recognize the salesperson's expertise for industry guidance and advice. Most salespeople start their careers by becoming knowledgeable about their own company, but this provides little value as most buyers can access that information on Google. On the other hand, sellers who can endure difficult market conditions want to provide value, so they are viewed as genuine strategic partners. 

Continually demonstrating trust and value are the means, so let's explore some practical ways salespeople can enhance trust and value with customers.

Be Transparent

When orders are delayed, customers need to be updated every step. This includes proactively telling customers about your shipping schedule and their delivery date and time. Today's sellers may have to answer new in-depth questions and concerns surrounding the specifics of their company's international supply chain. These types of objections may be foreign (pun intended) to some sellers, so it will be good to be ready for this line of questioning and find answers before these questions are asked.

To understand the experience customers are looking for, simply think of what it's like when you buy something as a consumer. You typically receive an email or notification when the order is placed and another one when your product has been shipped. You are notified of any shipping delays, and you receive one final notification once the package arrives at your front door. Corporate customers expect the same. Suppose a company doesn't have an automated process to provide this service. In that case, it falls on the salesperson to have this information at the ready—or even better—they can pass it along seamlessly without customers having to constantly ask for updates.

Answering questions is an everyday part of the job, but salespeople must be honest about what they know and what they don't know in all customer interactions. It is a misconception that a salesperson must have all the answers. Customers will not tolerate being misled with false or made-up information. Some may gain respect when a salesperson admits they need to follow up with an answer instead of simply saying what they think the customer wants to hear. A salesperson who presents assumptions as facts is headed for big trouble. Telling a customer, “It will be there next week," may temporarily get them out of a tough conversation, but they'll regret it when they're having the same conversation a week later.

We're not advocating that ignorance can be relied upon as a substitute for proper preparation. It is a significantly better strategy to be prepared to answer tough questions. Salespeople should plan to conduct industry research into their calendar to be familiar with their customers' current circumstances and reality. The better a salesperson understands their customer, the easier it will be to empathize with them. Plus, spending time thinking about customers may spark creative alternatives they might not have thought of to help them get the products they are looking for. You may not be able to deliver the product they initially wanted, but perhaps an alternative solution can be found. It's difficult to think "big picture" when operating with only a small piece of the information.

We were recently working with a client in the construction industry. After multiple weeks of delayed shipment, the salesperson was notified of another significant delay. The salesperson decided to visit the account, walk through the updates that had been previously communicated, and then broke the latest news. The salesperson asked, "what alternatives can we explore?" Ultimately, the customer chose to cancel the original order for a lower-priced product with a shorter warranty that they could get sooner. The salesperson ended up with a smaller order but gained new respect in the eyes of the customer. 

Communicate Proactively

Informing customers as soon as you hear about changes will help manage their frustration and prevent them from calling you to vent. Ask customers how much information and how frequently they want you to communicate with them post-sale leading up to delivery. You'll likely find that it's almost impossible to over-communicate in times of global disruption.

This brings up a question we've been getting a lot lately: when a salesperson has to regularly communicate bad news, how do they keep telling customers the truth week after week and have them continue believing it? After all, delays are out of the salesperson's hands. The company is doing everything it can to make good on its promises. Unfortunately, prices sometimes have to go up, and salespeople are often the bearers of all this bad news.

In our experience, top salespeople realize that questions can be avoided entirely if answers are given before the customer thinks to ask the question. It is far better to set expectations around known challenges that may arise after placing an order before the customer places it. The alternative is having to pick up the phone and inform someone of bad news—or worse—wait until they call to complain. 

Go to meetings prepared with data showing your company's past monthly percentages of on-time deliveries if you can get it. Talk about what caused delays for other customers and what your company did to resolve those issues. This line of preparation shows that you care, and that builds trust. Sales leadership also needs to be proactive in communicating any foreseen changes to their sales team as quickly as possible to immediately adjust to set new expectations with customers.

Remember, today's sellers aren't in a price war. They're in a delivery war. Of course, price will always be important, but delivery trumps price when resources are limited to move products from point A to point B.

Another client of ours recently told us they were "recycling" certain products removed from a customer site so that another customer could have a working, if not ideal, solution quickly, then replacing the "recycled" product with no additional labor costs when the final product arrives. Our client saw this as a time to build goodwill, even if it meant lower profitability for awhile 

Talk Candidly About Price Increases

Everyone is experiencing price increases. Being the one to talk confidently about the increases, their reasons, and the value you add will reinforce trust.

Customers not receiving orders on time isn't always the worst news to deliver. Sometimes the price also has to go up. In some industries, quotes that used to be valid for 90 days are now only valid for 30. We mentioned it earlier, but sometimes supply chain issues cause price increases on existing placed orders. Given the global uncertainty surrounding the rising cost of manufacturing, there are instances where a vendor would have to take a loss if they delivered the product at a previously agreed-upon price. 

The bittersweet reality here is that many customers are now accustomed to price increases. Customers dealing with the aftermath of problems caused by supply chain issues from the buyer's side of the table are becoming a bit numb. Simply telling them the truth about the price and the measures your company takes to compensate will go a long way.

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Retain Top Talent

This last point is mostly for the business owners and high-level leadership. Given the reality of everything discussed, it is likely already obvious which of your salespeople and support staff are worn out. One client told us he had a receptionist who had been with his company for 20 years—quit—because she was tired of the abuse she was taking from customers. Another salesperson told us, "You just hope that it's not your week to be the guy they call and scream at."

We had a customer tell us his top-performing sales rep quit his job last year to work at the Home Depot because products there were either in stock or not. USA Today found that one in five workers who quit during the "Great Resignation" ultimately regretted their decision. As for the other four, it's important to note that people don't tend to leave companies with a positive culture that makes them feel valued and heard. We would challenge organizational leadership with this hypothetical question: would you be willing to work in your customer service department or as a salesperson for a day? If the answer is no, that's an indication you might have a cultural problem.

People are looking for leaders who will step in and work through problems or find ways to give them the skillsets they need to get through their challenges.

People are still dealing with supply chain issues two years into a global pandemic highlights the need for updated and relevant sales training. Yes, leadership has a big problem when customers are screaming at tenured employees enough to make them quit, but that's also a sign that something else is going on. 

Salespeople need to be able to uncover what the real issue is. Knowing how to ask better probing questions so your people can dig deep and uncover what's happening is something covered in our award-winning IMPACT Training. To broach the subject at a high level, an incredibly reliable strategy is simply listening. When we say listen, we mean to listen for understanding, not for what you're going to say next. There's a big difference. Listening for understanding means you take notes when customers are talking, recap their challenges as you heard them, and ask if there's anything you missed. It's amazing the insight you can learn from customers when you simply ask them to provide it.

Closing Thoughts

Salespeople must remember that their customers have a tough job to do. Put yourself in their shoes and do your best to ease the pain they're feeling. Trust and value are the keys to long-term sales success, but trust always hits when a company can't deliver on its promises. Sometimes the best you can do is make sure the trust you have personally stayed positive.

The chances are strong that if your company has supply chain issues, your competitors are as well. The companies who get their act together first will be the ones who win in the long run. If you are transparent, communicate proactively, talk candidly about price increases, and work to retain your top talent, your organization will always come out on top no matter what is happening on the global stage.

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