The Perils of Selling Too Fast
Don’t Make These Foolish Mistakes
I’m often asked to ride along with client company sales reps to observe the sales process and determine how to improve the rep’s closing ratio. It’s a pretty enlightening exercise. One such story involved a large retirement advisory firm which sells investment advice, fiduciary services, nonqualified plan services, and client administration. I’d like to share it as a teachable moment.
Ripe with Opportunity
We arrived at the rep’s first appointment, a large hospital, to meet with the Vice President of Human Resources (VP-HR). He was referred to her by the hospital’s law firm which suggested it was looking for someone to assist in retirement plan communication and education for its 5,000 employees.
Sounds good, so far. Full of potential, yes?
We got situated in the large conference room as the VP-HR entered. After exchanging pleasantries, the rep immediately shared that his firm’s competitive advantage was a totally integrated solution of employee administration, communication, education, and investment management.
His firm had many competitors in each product and service area, and she knew it. As I watched, I felt uneasy because I knew this opportunity was a challenge—his best solution was a totally integrated system, yet we soon learned the prospect’s focus rested with only one aspect. He was selling a bountiful buffet to what seemed like a strict vegetarian.
The prospect continued the meeting by stating her interest in implementing a communication and education strategy to help improve participation levels in the hospital’s various retirement plans. The hospital had a 401(k) plan for all employees with a generous match, as well as a nonqualified deferred compensation arrangement for its physicians and executive management group.
To the sales rep’s credit, he did ask some clarifying questions around her needs. However, he quickly turned to probing her needs in other areas that complemented his competitive advantage.
As he questioned, I could see she remained focused on her need to improve communication and education of the hospital’s retirement plans. Frustration swept the rep’s face. I wanted to jump in but couldn’t. The rep finally agreed to follow-up and send her some information on how his firm could provide the services she sought.
As the meeting closed, the VP-HR asked the sales rep if he knew anyone who could fill an open position for a director of employee benefits. He asked for more details, and the VP-HR shared a job description, compensation, and a list of possible hospitals where this candidate might be found and agreed to take on the task.
The Opportunity Sours
As we drove to our next meeting, the sales rep asked me for feedback. I told him he learned more about her needs regards the open position than he did her need for improving communication and education of their retirement plans. He dropped the ball on those key questions.
The reason why? He sold too fast. Yet asked on his research, he knew the prospect had too many managers in her investment line up. He knew the hospital was paying above market for the investment management fees. He also saw a few opportunities in the hospital’s nonqualified plan design and felt his totally integrated approach would not only make its plan more efficient, but it would also save the hospital a substantial money. Unfortunately, he was in such a hurry to prove his point of differentiation; he overlooked the real nuggets on the table.
The rep failed to get a second meeting. The VP-HR hired someone other than his contacts for the position. He never learned why she needed to improve the communication and education areas. Sadly, his approach fell apart because he failed to listen and focus on the prospect’s issues and her vision for a solution.
When you slow down and take the time to master the prospect’s vision of a solution—in her case, improving communication and education—then tie your solution to that, you sell in a systematic way that parallels the prospect’s thinking.
If a prospect tells you they have a need, slow down and probe for details on the need. Don’t be so anxious to solve the problem, especially if you’re unclear about what the problem really is. Only by understanding the needs and reasons underlying the solution requirements can you focus on results the prospect really wants to accomplish. By doing so, you’re able to highlight the specific objectives you can address and tailor your presentation accordingly.
Doing It Differently and Better
What’s more, had the sales rep asked about the symptoms and causes underlying the VP-HR’s desire to change providers, he may have discovered justification for a good part of his total integrated solution. He needed to arrange the buffet for the vegetarian’s appetite.
Thinking back on this sales call, I witnessed a number of things the sales rep could have done:
Outlined to her what he knew and what he didn’t know
Learn whether she already researched solutions and simply wanted to compare solutions
Crafted insightful questions, then position himself as the right solution
Determine if he was the first or only firm
If the incumbent or another competitor had already worked through a solution
- And if the hospital needed to speak with multiple vendors to confirm its vision
Perhaps, the most obvious deficiency to this fateful sales call was the total lack of a well-organized meeting plan, packed with a questioning process to diagnose the prospect’s situation. It is a deceptively simple tool to help shape the vision of a solution for the prospect.
The Biggest Takeaway
I don’t want to risk oversimplifying why this sale didn’t succeed. Keith Eades, the author of The New Solution Selling, reports that the IBM Software Group found that it lost sales 93 percent of the time when it was not involved in defining the requirements for the solution. How could our sales rep been involved in shaping her definition when she had already done that?
He should have begun the meeting by stating a valid business reason for the meeting. “It is my understanding from XYZ law firm that you would like to explore a communication and education strategy, is that correct?” This clarity sets the stage and ensures everyone is on the same page.
Then he could have asked:
“What caused you to search for a new approach?
What isn’t working currently?
What alternatives have you looked at?
Is the incumbent not providing a solution?
How do you feel about making a change to a new provider?
What results do you hope to accomplish with a new strategy?
- How will you measure success?”
Armed with the answers to these questions, our sales rep could have built trust, identified a need, presented a possible solution, sharing similar situations he encountered. Then, he should have closed the meeting by asking to book a follow-up meeting with the VP-HR and her decision making team.
Alas. None of that happened. So my wish is that this cautionary tale keeps you from falling victim to these unnecessary mistakes and omissions. And because I am a huge proponent of an effective sales process, I’ll leave you with this thought…
See you on the upside,
For more information on how to simplify the complex sale, go to www.pleinairestrategies.com
Or call Bill in San Diego at 760.340.4277 or 213.598.4700