On Reflexion - what we've been thinking...

B2B Sales: From Always Be Closing to Always Be Qualifying?

Alec Baldwin’s performance as Blake in the film Glengarry Glen Ross immortalised the “Always Be Closing” attitude that for many has come to exemplify everything they hate about pushy, predatory sales people.

In any sort of complex, high-value sale, particularly one that involves multiple stakeholders, decision makers have become immune to this sort of Neanderthal behaviour.  But what are we to replace the “Always Be Closing” mantra with?

Vote with your wallet, or vote with your feet...

Pushing aggressively for the close at least had one advantage: it may have caused many buyers to vow never to deal with the vendor again, but at least it forced a conclusion.  In an ABC world, prospects quickly vote with their wallet, or vote with their feet.

I come across many situations where the opposite is true; sales pipelines that are clogged up with deals that are going nowhere.  As my friend Donal Daly has pointed out, it takes 150% longer to lose than win.  So clearly just waiting and hoping for nature to take its course isn’t a great alternative.

The discipline of winners...

From what I’ve observed, top-performing sales people rarely suffer from clogged pipelines.  They have the discipline to qualify accurately, and the confidence to politely turn away from deals that are never likely to close or they have a slim-to-no chance of winning.

Contrast that with the behaviour of all too many middle-of-the-road people: they hang on to opportunities that are long past their sell-by date in the mistaken belief that abandoning them will reduce the value of their pipeline.

Of course, the opposite is true: the real-world value of their pipeline, and their chances of beating quota, is diminished rather than enhanced by holding on to these non-win deals.  Better to set them aside, and go looking for better qualified opportunities.

From Always Be Closing to Always Be Qualifying...

In fact, I’m going to suggest that the new mantra ought instead to be “Always Be Qualifying”.  And by that I don’t mean just the classic BANT criteria (Budget-Authority-Need-Timescale) which is hardly relevant in many opportunities where the need has to be created before it can be satisfied.

And I don’t see qualifying as a one-time act at the start of the sales process, either.  My observations of top-performing sales people suggest that for them, qualifying is a continuous process rather than an event.

The art of continuous qualifying...

Let’s accept that the status quo rarely prevails.  Opportunities that looked promising to start with can fade away.  Leads that seemed poorly qualified can be nurtured into winning deals.  But at the end of the day, I’ll suggest that you need to keep on top of two things above all: will they buy, and can you win?

Will they buy is all about whether the problem they are facing is so painful that they have to act.  You need to be continuously qualifying for the economic impact, who else might be affected, and what the consequences of inaction might be.  If the problem turns out to be merely irritating, can it be elevated to important?  And is resolving the problem still a top priority - or has it been overtaken by events?  What would it take them to move forward to the next stage?  And what might hold them back?

Whether you can win is about whether they trust you, more than any other option (including “do nothing”), to deliver them the results they need.  Have you got the support of the people who matter when it comes to making the decision?  How can you elevate your value, and mitigate any risk?  And are you sure that you know what sets you apart – and why it matters to your prospect?

Coffee is for qualifiers...

According to Alec Baldwin, “coffee is for closers”.  But I’d be happy to buy a coffee (or send a Starbucks gift card) for anyone who contributes to this thread with their ideas about great qualifiers.

There are only 2 reasons why you lose a sale

I'm happy to share the second in our series of guest blogs from Donal Daly, CEO of the TAS Group.  In this article, first published in his Sales20Network blog in April 2010,  Donal explores the factors that affect sales win rates - and concludes that there are only two reasons why you lose a sale.  

I am sure you'll enjoy his perspective - over to you, Donal...

"One of the issues that I’m often asked about is how to improve Sales Win Rate.  Sometimes the question is presented as “What’s a good Win Rate?”, or “What percentage of deals that I bid for should I win?”  Of course there is really no universal answer to this question – and the reason for that is that it’s the wrong question.  In my opinion, energy is more productively spent in determining why you lose deals, and in my experience, the explanation follows a fairly predictable pattern. If that is true, then if you can identify the common attributes of lost deals, you can work to avoid deals with those attributes, or focus on how to overcome the weaknesses that gave rise to the failure. Then by definition, your Sales Win Rate will improve.

In reality there are really only two reasons why you lose a deal:

• You Should Not Have Been There (pursuing the deal) In The First Place, or
• You Were Outsold.

I will substantiate this claim a little later, but first I want to share some alternative perspectives.

When I ask sales managers why their teams lost a specific deal the most frequent responses include things like:

1. “Well, he wasn’t speaking to the Decision Maker.”
2. “She didn’t understand what the customer really wanted to achieve.”
3. “We should never have bid in the first place, the customer is locked into our competitor.”
4. “Our solution just wasn’t a good fit, and he (the sales person) tried to squeeze a round peg into a square hole.”
5. “The competitor had a stronger relationship with the customer.”
6. “There was never a project there in the first place.”
7. “We didn’t understand the personal motivation of the Decision Maker.”
8. “He couldn’t get the customer to understand our value proposition.”
9. “She never realized that the budget was way too small for our product.”

Responses from sales people to the same question include many of the above, but there are sometimes some additional reasons given:

1. “We’re just too expensive.”
2. “We couldn’t provide a reference because we’ve never sold to that type of customer before.”
3. “I never knew [the deal] had to be approved the technology committee.  He never told me that.”
4. “The customer just doesn’t get it. I don’t understand it – she really needs our stuff.”
5. “I never knew that the competitor wrote the RFP.”
6. “He never told me that Capability X was important.”
7. “My [internal] sponsor just didn’t have the juice to make it happen – even though he told me he did.”

For mid-to-large deals in an enterprise B2B market, the costs incurred in pursuing a sale will typically range between $10,000 and $100,000. Our research at The TAS Group has shown that it takes 50% longer on average to lose a deal than to win one.  Think about that for a moment.  If your sales team is spending more time losing deals than winning deals, what’s that going to do to your quota achievement?  Or, if you could fix the problem, what impact would that have?

No matter how you look at the reasons given above, in truth there are really only two reasons why you lose a sale:

1. You Should Not Have Been There (pursuing the deal) In The First Place , or
2. You Were Outsold.

It’s as simple as that – just two reasons. In my experience, failure is weighted fairly evenly across both. So, let’s look at these in a little more detail.

Reason 1. You Should Not Have Been There In The First Place

At The TAS Group, we discuss ways to help sales teams win 4 of 7 deals, instead of 3 of 10.  This means that you pursue fewer opportunities.  It’s not about ‘getting up to bat’ more often. In fact it’s the opposite.  In practice it means determining at the outset if your solution can uniquely and competitively add value to the specific customer that you are targeting. Of course it means research, and work, and understanding of what the customer wants to achieve, and how your solution might be applied to solve their specific problem.  This information is only useful if you understand what the competitor might be offering.  Often, it’s as simple as defining your ’sweet-spot’ customer – listing the attributes that describe the profile of the customer to whom you can competitively add value. When you hear yourself saying “We’ve not sold to this type of customer before – but I think I can make it work.” – then move on. You’re wasting your time.

If you look at the ‘lost deal’ reasons listed above, items 3,4,6, and 9 in the Sales Manager’s list, and items 2 and 5 in the Sales Person’s list fall into that category – you should not have been there in the first place.

Reason 2. You Were Outsold

Sometimes this is hard to accept. I know that in my case, if it’s not Reason 1, then I’ve been outsold. I didn’t understand what the customer wanted to achieve, I was not politically aligned in the customer’s organization, I didn’t understand the customer’s buying process, I chose the wrong competitive strategy, I failed to articulate my value proposition in terms that the customer understood, I failed to demonstrate ROI for my solution, or, more likely, a combination of a few of these.  Looking at the lists above, items 1,2,5,7,8, and 9 in the Sales Manager’s list, and items 1,3,4,6 and 7 in the Sales Person’s list fall in to this category. I’ve been outsold – someone else did a better job.

Now, even if you’ve done a great job in qualification – and that’s what you’re doing to pass the ‘Should I Be There In The First Place?‘ test, you won’t win all of the deals.  Sometimes, you will be outsold, 3 out of 4 is a realistic Sales Win Rate target.

* * *

When I express the perspective outlined here, I get a range of reactions, ranging from animosity (“Who does he think he is? He doesn’t understand what I go through to win a deal”) to guarded acceptance and excitement (“Wow, if we could actually achieve that, it would be incredible. We should give it a shot.”).

As we’ve watched our customers move to these kind of ratios it’s been really gratifying to know that we’re making that kind of difference for some.  I’ve spoken at length to those who excel on this journey, and there are a number of common attributes – some organizational, and some with respect to the tools they use to help them.  Organizationally, the companies just seem to be run better, and sales is viewed as the engine that fuels growth, and investment is commensurate with that view.  From a sales tools perspective, the common elements are a sales process that maps to how the customer buys, deep analysis of the customer’s political structure, and collaborative interaction with the customer to truly understand their business problem and what they want to achieve.

The following movie links give an overview of components of how the Dealmaker Sales Performance Automation platform is used to support these three goals.  Though, as it uses our Dealmaker product, it’s a little self-promotional, and I don’t like to do that in the blog, it’s the best way I can think of to elaborate on the areas that I think add considerable value and I’ve seen executed well."

• Sales Process
• Political Alignment – go to the 3min mark in the movie
• Collaboration

I hope that you've enjoyed Donal's perspective, and that you'll understand why we see such value in our relationship with the TAS Group. You can learn more about Dealmaker here.

B2B Sales: Eliminating the barriers to the buying decision journey...

The past year has provided abundant evidence that driving sales people to "sell harder" and hoping that this will boost revenues is an out-of-date and ineffective strategy in a world of increasingly well-informed and generally risk-averse B2B buyers. 

It's clear that sales people are having to sell smarter - and to ensure that they can diagnose and deal with the obstacles that might be preventing their prospects from making buying decisions.

 

B2B Sales: Elevating your prospect's need for your solution...

In today's business climate, useful or important needs might help to get a vendor considered or evaluated, but only urgent needs will get them bought. So it's become critical that sales people are able to elevate the prospect’s need for their solution. This ability to identify or create urgent needs makes all the difference between successful and unsuccessful sales people, and between companies who lead their markets or follow as also-rans.

In fact, I’ve observed that the inability to distinguish between useful, important and urgent needs, or to elevate a prospect’s need for the solution from useful or important to urgent lies at the heart of many sales pipeline challenges.

Why not just look for urgent needs?

Given this, why wouldn’t sales people and vendors concentrate solely on trying to find prospects with urgent needs?  There are a couple of reasons why this is not an effective strategy – first, prospects with urgent needs are often already in an active sales cycle with another vendor’s fingerprints all over it and second, urgent needs often have personal, painful and emotional dimensions, and getting prospects to acknowledge this in a first contact may be challenging.

Distinguishing between useful, important and urgent needs...

Useful needs drive curiosity, generate interest and can be helpful in initiating buying processes. Important needs drive consideration, cause evaluation and can be helpful in stimulating evaluation. Urgent needs drive action, lead to purchase and are essential to concluding the sales process. A key way of distinguishing between the different levels of need is to get the prospect to describe the potential impact of not dealing with them.

Useful needs are often irritants without clear economic consequences.  Important and urgent needs typically have some measurable economic impact, but the things that differentiate urgent needs include escalating economic impact the longer the issue remains unresolved, the number of people affected, and explicit linkages to “top of list” personal or corporate goals.

The consequences of inaction...

Clearly defined consequences of inaction are an essential foundation for urgency.  Faced with an acknowledged prospect need, sales people must establish how the prospect may have tried to deal with the issue before, why now is the right time to address it, who else within the prospect organisation is affected by the issue and – most critically - what would happen if they fail to deal with the issue soon.

It’s rare for needs to be elevated to urgent status unless the economic consequences of not dealing with them have been acknowledged by a sufficiently powerful champion within the prospect.  These economic consequences don’t just revolve around the opportunity to reduce cost – they can also relate to missed revenue opportunities.

Qualifying for urgency...

So, with a very few exceptions, if the pain cannot be monetised, persuading the prospect to invest in solving the problem is going to be an uphill battle.  In fact, a growing number of our clients have adopted the approach that sales opportunities cannot be valued and should not be forecasted unless and until the pain has been monetised and acknowledged by the prospect.

This has interesting consequences: applying the rule at first reduces the perceived value of the sales pipeline - but in the absence of urgency the affected opportunities were almost always overvalued anyway.  It also forces the sales person to think carefully about how to elevate the urgency of the prospect’s need or (if this cannot be achieved) to accept that a longer-term “nurturing” strategy may be more appropriate. Either way, forecasting accuracy inevitably rises.

Consider this...

What proportion of the prospects in your current pipeline have acknowledged urgent needs, and are you able to help them to monetise the consequences of inaction?  Are your sales people able to accurately distinguish between useful, important and urgent needs?  What are you doing to help elevate your prospect's need for your solution, and how are you dealing with opportunities that seem to have no current urgent need?  And does your current sales forecast include prospects who have not yet acknowledged the cost associated with preserving the status quo?