When You Lose a Sales Opportunity, Can You Honestly Answer Why?
The Top Three Reasons You Can Master Now
I recently conducted a LinkedIn survey asking salespeople to list the top three reasons they failed to win new sales opportunities. I encouraged them to be honest and confidently list their answers, as well as the frequency of loss for each reason.
Before I give you some of the results and my personal observation, take a moment and write down your top three reasons.
What motivated this survey was a blog I read by Ian Edwards, a sales performance leader, discussing why we win and lose sales opportunities. I had just lost a sales opportunity, which felt like a wasp sting, so I needed to do my own “loss analysis.”
The answers my LinkedIn followers gave didn’t surprise me; I’ve heard the same reasons many times from my own clients about their sales competitions.
Survey participants said:
Politics Competition had better relationships;
Products Competition had a unique product that was difficult to match;
Incumbent Incumbent had upper edge; took my solution, stayed with competition.
What did surprise me is this: while responses are all valid, the reasons I heard are not the real cause.
There’s a wealth of data, looking across thousands of sales interactions, that clearly shows the major reasons why salespeople don’t win deals.
For example, in a study by Bain & Company, 375 companies were asked if they believe they deliver a superior value proposition to clients. Eighty percent (80%) said yes. Bain then asked the clients of these companies if they agreed that the specific company from which they bought delivered a superior value proposition. Only eight percent agreed.
So, whatever your reasons, most reasons for loss are a subset of just two predicable factors.
Expectations & Promises
Internalize this fact. Buyers don’t perceive they get what they expected and were promised by salespeople. Whoa! Let me repeat: Buyers say salespeople don’t meet their expectations nor do they deliver on their promise of value. This is a major disconnect that I see all the time. The salesperson thinks he offers the perfect result, yet the prospect doesn’t buy.
Reason One―Not Focusing on the Prospect/Client/Customer
Over the years, Miller Heiman has made a thorough study of what makes sales organizations, “World-Class Sales Organizations.” As a result of that work, we’ve identified key factors that must be in place to generate that winning strategy.
At the center is the prospect. No surprise here. Truly knowing who he/she is, then fully understanding why they buy from us is critical. A successful sales strategy starts with how salespeople interact with their prospects/clients/customers. Then you create opportunities for your products and services within the prospect’s needs profile.
When you understand what is at issue for him/her before you propose a solution, you’ll save time, frustration and boost your close ratio. When prospects don’t see the value for themselves, we as salespeople have failed to connect our products and services to their issues.
Reason Two—Lack of Meeting Preparation
Most sales conversations tend to gravitate towards talking about possible solutions. Meanwhile, at the initial phase, the prospect grapples to better understand the scope of his situation; the business implications; if this is the right time to address the situation; and who else might need to be involved in the decision. This phase is all about becoming aware, and attempting to get some sense, structure and boundaries to the situation.
In my opinion, salespeople under invest in improving their meeting and preparation skills. Now I have coached and/or been involved in literally thousands of sales opportunities, and this is one of those areas that’s simple to change but not easy to change. Most of you reading this blog will think, “I’ve got it – that is what I already do.” Perhaps, but how effectively and consistently do you do it?
Selling successfully has similarities to traveling to a foreign country. To have a successful trip to a foreign land, you need to do some planning, understand the culture and language, know how to communicate, know how to navigate, et al. If any one of these elements is weak or missing, the trip will not go as well. The same is true in sales opportunities. You will be much more successful the better you understand what is absolutely essential to master before you start the process.
Having a well-thought out meeting plan can make the incremental difference between winning and losing the opportunity because it puts you in a strong position to understand what’s important to the prospect as it relates to solving his issues.
Reason Three―Premature Diagnosis vs. Deeper Understanding of Needs
Today, diagnosing needs isn’t nearly as important as demonstrating your understanding of needs. Please re-read that sentence. We’re far too ready to jump in and solve things. In Rain Group’s recent Insight Selling study and analysis of more than 700 corporate purchases, research reveals what winners do differently: “deepened my understanding of my needs” fell near the bottom of the list (ranked 40 of 42 factors). Winners barely did it at all compared with the rest of the factors, yet they still won the sale.
The second place finishers focused more often on diagnosis than the winners, yet they still lost. Situationally, diagnosis can be important. If the buyer wants to make improvements but doesn’t know what the issues are, diagnosis is necessary. But at a macro level, it’s not as important as it used to be according to the Rain Group study.
Buyer’s today have access to so much information. We hear that more than 50 percent of the purchase process is completed before buyers have their first serious interaction with salespeople. In my experience, buyers work internally first to try and understand their issues and possible solutions before they reach out to people they feel can help them solve their problems.
Don’t Sell So Fast
Although salespeople may not have to diagnose as often or deeply anymore, they do have to credibly demonstrate understanding of need. It is critical. I believe this is one of the major reasons salespeople don’t win sales opportunities. They diagnose the problem in their mind, then immediately bring a solution to the table. They’re selling too fast!
When you discipline yourself to avoid the dangers of product dump, you gain the obvious advantage of understanding the prospect’s needs. By drawing out the prospect’s current interests and concerns, you can focus on the results he really wants to get accomplished – not just the results you think your product can or should deliver. When you learn to do this well, you make room to address the specific objections you can solve and can tailor your presentation accordingly.
Know this: Because it is still rare for salespeople to focus on the prospect’s vision for a solution, if you learn to do it well, you differentiate yourself from the competition. This subtle strategy lets the prospect know you intend to deliver value—the type of value she specifically needs. The sheer beauty of this genuine approach to deliver value: You leap several steps ahead of those competitors who are merely playing low-bid games. Why would you have it any other way?
See you on the upside, Bill
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