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The Letter of Understanding

Written by: Rene Zamora

Article Overview: Owners and managers should have your sales people begin using the letter of understanding and you will see how well and deep they are approaching the sales discovery process. It serves as accountability for how well the sales person is discovering needs, offers concrete data to coach with and manages expectations with prospects.

The Letter of Understanding

The letter of understanding is a way to qualify your buyer. It helps you know if you should keep moving and confirms how well you understand their needs and situation. You should have your manager review these letters before you send them until they start coming back with no suggestions. You will probably need 6 or 7 letters to get there.

In this letter (mail or email) you want to confirm the following:

Buyers goals, needs or problems
Current situation
Vision of how they see things after implementing a solution
Value – areas that will cost justify the purchase
Access to other buyers if they exist

Here is a sample

Dear Bob,

Thank you for your interest in ICU Security Group. The purpose of this letter is to summarize my understanding of our discussion today. You told me your primary goal is to be able to monitor the activity in your businesses from anywhere in the world.

Today you have four different locations and they each have a security recording device. The businesses are open 24/7 and do not have management in the store for 16 hours of the day. The security systems were originally installed to prevent robberies and they have, but shortages have risen 20% over the last year totaling $50,000. The cameras do not cover the whole store and no one is checking the recordings since they were installed for robberies and none have taken place. You believe you can reduce shortages if you have the following capabilities:

Camera coverage over the whole retail and stock room floors to remove blind spots and bring accountability to staff and customers.
The ability for you and your managers to monitor the store anytime of day from any internet connection including PDA to add additional accountability.
Ability of managers to see cash register transactions on the video recording to monitor purchase transactions and audit register tapes.

You indicated you would like me to visit with you managers before moving forward to gain additional input. I would suggest the following as a course of action:

Confirm you are in agreement with this summary.
Arrange interviews with your managers.
Summarize my findings and meet back with you to discuss solutions.

I will call you on Tuesday, January 7th at 9:00am to review this letter and discuss our next steps. If that time is not convenient for you, please let me know an alternative. I look forward to working with you and your company.

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Article Tags: 7 letters, accountability, blind spots, camera coverage, cameras, capabilities, cash register, current situation, internet connection, letter mail, letter of understanding, purchase transactions, robberies, room floors, security group, security systems, stock room, value areas, video recording, world today



Related Forum Posts
Received my first Letter of Interest, What now? - After blasting financial and VC firms with my executive summary, I have finally received my first Letter of Interest. I'm really excited that my work is finally starting to show results, but that makes me all the more cautious. The terms aren't very good, give up a little less than half of the company for less than a million dollars of funding. It also says I'll basically have to do what they say so they can 'protect' their interest. So my question is, how open are these letters of interest to negotiations? I really appreciate any information/advice from anyone who's been through the process so I don't sign up for something I will regret. Thanks!
Re: Marketing to Wealthy Consumers - [quote="RussellWebb":4018wpr1] I'll then create a marketing piece, either postcard, letter or even a Fedex Letter (this really gets their attention!) and make contact this way. This approach allows me to create a tightly focused campaign that can be personalized... instead of a mass mailing approach.[/quote:4018wpr1] I use FedEx second day for when I target CEOs or Presidents and this REALLY gets their attention!
General business value - Typically a general ball park value range can be calculated by figuring 3- 5 times the net earnings. With the 2007 year ending recently, if the top page of the 07 tax return is not available to give you official documentatin of that, you will have to go according to the P & L statements. Just make sure you get something in writing from the seller that states the P & L's will be reflective of the 07 tax returnwhen it is prepared. Either the seller or the buyer can bring a LOI (Letter of Intent) to the table outlining a deposit, refund policy and anything else that will protect them. I suggest having a lawyer draw up a LOI to ensure you are protected fully (as Hap hazzardly put together LOI could cause problems later on).
Important tips for online business - 1.Traffic. Without traffic, you have nothing. It is like having a store where nobody walks through the door. Without traffic, there is none to buy your product. 2. Your Sales Letter. This is where you sell your product. It is of vital importance that you have a sales letter that converts, and you should work on it continuously to increase conversion. Otherwise those prospects that you have got to your website will just leave and go somewhere else. 3. Your list! You should continuously be trying to build your list and your network. It is easier to convert a qualified prospect into a customer, and an existing customer in to a repeat customer. Hope this helps guys!
Re: Marketing to Wealthy Consumers - [quote="Sebastien":3r7pgljg][quote="RussellWebb":3r7pgljg] I'll then create a marketing piece, either postcard, letter or even a Fedex Letter (this really gets their attention!) and make contact this way. This approach allows me to create a tightly focused campaign that can be personalized... instead of a mass mailing approach.[/quote:3r7pgljg] I use FedEx second day for when I target CEOs or Presidents and this REALLY gets their attention![/quote:3r7pgljg] Great idea Sebastien - isn't everyone a little curious when that type of package shows up


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