Win More Sales with an Indirect Strategy

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Ten Reasons Salespeople Lose Deals

Below is a blog post from the Harvard Business Review by Steve W. Martin. What are the top challenges your salespeople are facing today? Do you know what obstacles are preventing them from closing more business deals?

Ten Reasons Salespeople Lose DealsTen Reasons Salespeople Lose Deals

Over the past year I’ve had the opportunity to interview several hundred business-to-business salespeople about how they win over prospective clients and the circumstances when they lose. These interviews were conducted with salespeople across a wide variety of industries including high technology, telecommunications, financial services, consulting, industrial equipment, healthcare, and electronics, to name a few. Their companies ranged from start-ups to billions of dollars in sales with the majority being between $50 million and $500 million in annual revenue.

During the interviews I always ask the salespeople to describe the top challenges they were facing. Specifically, I try to find the obstacles that prevent them from closing more business (as opposed to a general list of items that made their job more difficult). Since I didn’t want to influence their answers, I asked open-ended questions instead of providing them with a list of topics to be ranked. Below, you will find the most frequently mentioned responses prioritized from most to least important.

No Decision. The real enemy of salespeople today isn’t their archrivals; it’s no decision. Customers will go to great lengths to reduce the stress of buying. They list their needs in RFP documents that are hundreds of pages in length. They hire consultants to verify that they are making the right decisions. They’ll conduct lengthy product evaluations and talk to existing users of the products to ensure they work as advertised. All these steps are taken in an effort to eliminate their fears, reduce their uncertainties, and satisfy their doubts. However, customers are never 100 percent sure they are purchasing the right product and there are always naysayers in the organization who are against moving forward. As a result, customers frequently won’t make a purchase even after an exhaustive evaluation.

Stalled Sales Cycles. Customers are more cautious than ever and moving the client to the point where they will make a purchase is a formidable undertaking. In some cases, the excitement generated by the salesperson’s initial 30,000 foot sales pitch to senior executives didn’t motivate meaningful follow-up from the lower level personnel of the customer’s organization. At other accounts, prospective buyers weren’t experienced with purchasing products. They didn’t understand how to sell their project internally and were unable to garner senior executive sponsorship. During lengthy sales cycles, evaluators frequently become reoriented toward other emergencies and the decision makers disappeared. Increasingly, purchasing has more say over decisions that were previously made solely by business areas. Procurement can be introduced very late during a sales cycle and reopen the process long after the salesperson thinks he has already won the deal.

Inability to Penetrate New Accounts. One of the most difficult tasks in all of sales is to penetrate new accounts. Salespeople continually cited how hard it was to generate initial customer interest and secure an introductory meeting. In almost every interview, salespeople also lamented the lack of leads being generated by their marketing department as well.

Product Commoditization. Nearly every market today has matured to the point where there is very little difference between the features, functions, and specifications of the competitive products.

Price versus Value. From the customer’s standpoint, the cost of the salesperson’s solution was prohibitive because the perceived value of the operational benefits did not justify the price. In other cases, a competitor’s price was significantly less thereby blocking the salesperson’s future involvement in the sales cycle.

800 Pound Gorilla. Many underdog sales organizations have to compete against the mindshare of 800 pound gorillas in their marketplace. Companies like Microsoft, Cisco, and IBM are so dominant in their particular industry that they win business by default.

“Nice-to-Have” Product. During these tough economic times, companies have drastically cut back on any type of purchase that may be considered non-essential or a luxury. In other situations, the salespeople indicated they lacked the financial arguments and real-world proof points to move their product into the “must-have” category.

Internal Sale. At many companies the difficult task of winning over new customers is equally matched by the effort required to sell the deal internally. Salespeople not only have to rally internal support to pursue an account, they must aggressively justify the approval of legitimate business terms and pricing concessions. They also have to contend with long-drawn-out internal processes to generate proposals, quotes, and contracts that can impact deal momentum.

Administrivia. Salespeople complained that excessive updating of CRM systems, time consuming forms/reports required by management, and post-sales administration activities sapped valuable selling time in the field.

Pre-sales Resources. Many sales organizations are not adequately staffed with enough pre-sales engineer resources and product specialists to fully support all sales efforts. In addition, these technical resources also serve as an important escalation focal point should problems arise during the initial product implementation. When the customer has a negative experience it hinders future purchases and the lack of referenceable customers impacts sales efforts overall.

It’s important to be aware of what salespeople see as their chief obstacles–especially during a tough economic environment that is making their jobs especially challenges. The percentage of salespeople making quota at some organizations was as low as 35 percent in 2012, and this is no doubt in due to the challenges listed above. Finally, I believe these challenges have also directly influenced the top business-to-business sales trends for 2013.

The post Ten Reasons Salespeople Lose Deals appeared first on Harvard Business Review.

Top Reasons Salespeople Lose Business

Here’s a great article from Steve Martin who writes the Heavy Hitter Sales Blog. Are you doing an autopsy on you losses?

 

Top Reasons Salespeople Lose Business Top Reasons Salespeople Lose Business

There’s a natural tendency to assume that the losing salespeople lacked sales prowess that the winner possessed or their product was far inferior in some way. However, in the overwhelming majority of interviews the evaluators ranked all of the competing salespeople and the feature sets of their products as being roughly equal. This suggests that there are other factors that separate the winner from the losers with some being completely out of the salesperson’s control. Below, you will find these key factors along with a corresponding win-loss interview quote.

Incumbent Advantage. The incumbent vendor has a huge sales cycle advantage and the tendency is for them to win business by default. Based upon my research, the odds of unseating an incumbent vendor is typically about one in five.

“It’s a pain to switch vendors. It’s a pain to analyze whether you should or not. We naturally prefer working with our existing vendors.” —Vice President of Purchasing

Inability to Remove Risk. Customers are never 100 percent sure they are purchasing the right product. Regardless of their confident demeanor, on the inside they are experiencing fear, uncertainty, and doubt. The ability to remove perceived risk plays a key role in determining who wins the deal.

“It sorts itself out pretty fast — those who will and won’t make it with us. We are a big company, so there’s always a tendency to go with the big players. Who are your proven big-time customers? What resources do you have to get something fixed?” —Chief Operating Officer

C-Level Executive Access. Because every major purchase involves executive level approval at some point, a salesperson’s goal is to connect with a busy executive and conduct a meaningful face-to-face meeting. However, one of the toughest jobs in all of sales is to penetrate the C-suite, and there is a direct correlation of winning to the number interactions the salesperson has with executives during the sales cycle.

“Every salesperson is trying to get into my office and explain how their wonderful products will save me tons of money. Very few do because most don’t understand what it takes to sit across the table from me.” —Chief Executive Officer

Business Solution Focus. A common interview theme is that both the winning and losing salespeople knew their products very well. However, winners were better able to prove their value as a business partner who had the expertise to solve the customer’s problem.

“What’s wrong with salespeople is they’re typically selling a product. I don’t need a product unless it solves one of my business problems.” —President

Ineffective Messaging. Successful communication is the cornerstone of all sales. Winners have the ability to tailor compelling messages that resonate with the various evaluators across the organization and up and down the chain of command.

“We are a skeptical group, and they lost the deal during their presentation. They said they were different and much better than what we have, but they didn’t provide enough proof. What they said didn’t really apply to us.” —Chief Financial Officer

Poor Pre-sales Resources. The complex sales process is typically a team-related sales effort that involves pre-sales product and consulting experts. Losers were often cited as having inferior quality pre-sales resources and equally important, the lack of knowledgeable resources who consistently attended each meeting throughout the sales cycle.

“The vendor we chose has a group of smart, dedicated, customer-oriented people. To a great degree, I don’t think their products and services are different from their competitors’. They distinguish themselves with their people.” —Vice President

Lack of an Internal Coach. A clear difference between winners and losers is that the winners developed an internal “coach” within the account. Coaches are evaluators who provide proprietary information about the selection process, status of the competition, and help the salesperson
determine his course of action.

“Anytime we had a question, the sales rep attacked it. He would get their people on the phone within a day to answer how we could do something. He listened to what we were trying to do and he knew his resources. He earned our trust so we were much more open with him.” —Chief Information Officer

Out-of-range Pricing. Time after time, interviewees reported they did not pick the least costly option. Savvy evaluators realize there will always be a low bidder. In reality, there is acceptable price range that the prospect is willing to pay and this can be anywhere from ten to twenty-five percent higher than the lowest proposal (depending upon industry and products being purchased). However, solutions priced outside of this boundary will rarely, if ever, be selected.

“Price is always important but we did not buy the lowest priced solution. There are many other factors including the fit between organizations that render pricing to a secondary factor. With that said, I never want to buy the highest priced solution.” —Vice President of Technology.

Losing is always hard. Learning you are the loser in the eleventh hour of a deal is a frustrating, humbling, and embarrassing event. If you find yourself in this circumstance, perhaps it’s time to honestly ask yourself if any of the factors above were at the root cause of your loss.

Harvard Business Review is arguably the most prestigious publication for business leaders and management thinkers. Here’s one of my recent Harvard Business Review articles titled “Top Reasons Salespeople Lose Business.”

The Seven Deadly Sins of Salespeople

 

The Seven Deadly Sins and the Four Last Things...
Image via Wikipedia

 

Here is a post from Heavy Hitter Sales Blog. Do you agree with these sins? And if you agree, would you put them in this order?

The Seven Deadly Sins of Salespeople

by Steve Martin

In the late sixth century, Pope Gregory described the seven deadly sins from the least serious to the most, as superbiainvidiaira,avaritiatristiagula, and luxuria. Translated from Latin, they are pride, envy, anger, avarice, sadness, gluttony, and lust. What do you think are the seven deadly sins of salespeople? Here’s my list, in order of least to most severe.

Chattering. Salespeople talk too much on sales calls for a variety of reasons. Some are nervous chatterers who just can’t keep their mouths shut. Others think they know more than the customer so they lecture the customer to death. Many salespeople feel compelled to recite their canned pitch regardless of the customer’s actual interest. You have conducted a perfect sales call when the customer has been persuaded to buy even though you listened far more than you spoke.

Gourmandizing. Millionaire railroad tycoon Diamond Jim Brady was a legendary gourmand who lived at the turn of the twentieth century. For breakfast he ate eggs, pancakes, pork chops, cornbread, fried potatoes, hominy, muffins, and beefsteak and drank a gallon of orange juice. Lunch consisted of two lobsters, deviled crabs, clams, oysters, beef, and several pies. A platter of seafood and carafes of lemon soda constituted his 4:30 snack. The evening meal began with three dozen oysters, six crabs, and turtle soup. The main course was two whole ducks, six or seven lobsters, a sirloin steak, and servings of vegetables. Dessert included a platter of pastries and often a two-pound box of candy. Does your sales organization include a “Diamond Jim Brady” who devours company resources to the point of gluttony?

Inactivity. Salespeople must be short-term thinkers and long-term planners. An inactive salesperson neglects the future and does not spend time on activities that build his future pipeline. Inactivity is not to be confused with laziness. Many hardworking salespeople are completely focused on the here and now. Unfortunately, they forget about next quarter and next year. Other salespeople place all their eggs in one basket, never really thinking about what will happen if their big deal collapses. They have been lulled into a state of inactivity and could be jolted into reality at any moment.

Obliviousness. Many salespeople don’t take the time to understand how customers fit within their own organization. I am continually amazed at the lackadaisical attitude many salespeople have about understanding the organizational structure of the companies they call on. When they are asked what a person’s title is, they will answer, “manager,” or something equally nebulous, when they should answer, “manager of application security who reports to the director of application development, who, in turn, reports to the CIO.”

Shallowness. Salespeople who don’t know their product well enough to build customer credibility cannot be expected to drive account strategy. How can you determine your next course of action if you don’t understand the customer’s technical objections and how best to emphasize the product’s strengths? Worse, in this situation you are completely at the mercy of someone else because another member of your company has to explain how your product works.

Presumptuousness. Assuming information you really don’t know is one of the worst sins for a salesperson. Salespeople who are not certain but make their best guess about who the ultimate and final decision maker is within an account are more than halfway to losing the deal.

Ignorance. Ignorance is the deadliest sin. If you do not have a spy within an account who is telling you what is happening in closed-door meetings, defending you when you are not around, and disseminating propaganda on your behalf, you will most certainly lose.

Your success is your responsibility. The road to the top is paved with hard work, diligence, and self-discipline. The salesperson who avoids committing these seven deadly sins is well on his or her way to becoming a Heavy Hitter, a truly great salesperson.