Letter of Understanding – Build Trust with Customers and Prospects
What is the Purpose of a Letter of Understanding?
The purpose of a Letter of Understanding is to confirm a sales person’s understanding of the buyers’ situations and their decision-making processes—whether those buyers are prospects or existing customers. It’s always a good practice to confirm agreements and understandings throughout the sales process, so a company might have more than one LOU, or several forms of a LOU that can be used along the way as reps work with buyers.
What is the intended result of a Letter of Understanding?
The intended result is to gain trust with buyers and increase the effectiveness of the solution or product the sales reps are presenting.
The Letter of Understanding can be sent via regular mail or email, and should include some or all the following items:
- Buyers’ goals, needs, or problems
- Current situations (including information on people, places, circumstances, and history, as well as the companies internal business systems, processes or structure.)
- Recap or description of what buyers envision happening after implementing a solution or buying a company’s product
- Value proposition that will justify the cost of the purchase
- Agreements on access to other people involved in the buying decision (if necessary)
Here is the Letter of Understanding I promised to send over. Its purpose is to summarize my understanding of our discussion today and to ask you to confirm or correct this letter so we can both be on the same page. I look forward to your response to my summary below:
You want all of your communication and information systems to be flexible and capable of accommodating virtual employees without losing the feel of having everyone on one local network. The ultimate objective is to make it easier for all your employees to work most effectively together and with customers. Currently, virtual employees are using various platforms, including personal cell phones and their own computers—which means the ability to create a “one company” feeling is being lost because of some compatibility issues and lack of integration. You also want to minimize the use of third party integration systems as much as possible and are willing to compromise on some features to keep more apps integrated in one system.
You are concerned your key managers will resist the changes and are looking for a vendor that can ensure a complete and effective transition. Cost, of course, is a concern, but implementation and integration are key objectives. You do have a budget for this purchase this quarter.
You suggested I meet with your leadership team to collect information on needs and concerns, and you will make introductions so I can set up these meetings. Your timeline is to have a comprehensive solution presented in eight weeks.
Please confirm if I am on track and understood you correctly. If so, I will await the introductions to your leadership team.