Check Yourself: Why Do You “Lose” Sales?
Do you regularly ask yourself this question?
I do in many workshops and client conversations. Watch and listen to various responses in a recent workshop. Make a note that participants were leading salespeople from multimillion dollar financial services firms. They claimed:
Missing information. No sense of urgency by prospect. Prospect doesn’t see your solution as the answer. Gatekeepers block opportunity. Process becomes too complex. Prospect becomes overwhelmed.
Let’s break down this information.
Over the last decade, I’ve interviewed hundreds of decision makers as part of the win-loss studies I conduct for clients.
I’m always fascinated by how decision makers describe their selection process; why they make the final decision; and why competing salespeople lose the opportunity.
It is natural to assume the losing organization’s sales team lacked the sales effectiveness the winner possessed or their products and services were far inferior.
However, in the majority of my interviews, the buyer ranked the competing salespeople and product or service features and benefits as roughly the same.
What I learned: The buyer saw other factors separate the winner from the losers, many of which were completely out of the salesperson’s control.
Pay attention to these factors, listed in no particular order:
Such an important factor, I devote an entire chapter to the incumbent advantage in my new book MERGE 2.0. For your ease of learning, I am creating an eLearning module, too, as part of my new eLearning platform coming out this spring.
Incumbents carry a major advantage; most buyers tend to allow them to win by default. In a Harvard Business Review article by Steve W. Martin, Top Reasons Sales People Lose Business, he says “the odds of unseating an incumbent is typically about one in five.”
Let’s face it, no buyer wants to rip up the sidewalk and switch vendors.
A vice president of human resources told me, “We would prefer working with our existing supplier, as it is hard to switch. The decision doesn’t just impact my departments, others must also weigh in and we are all super busy, and we remember how much time it took last time.”
From one of my previous blogs, here are three ways to unseat the incumbent.
The ability to remove perceived risk plays a key role in determining who wins the deal. “Ninty-nine percent of B2B buying is about covering your butt,” says the author of a new EnquiroResearch.com study.
In other words, B2B buying has become more about minimizing personal and organizational risk. Today’s challenging economy only magnifies this risk behavior.
In a recent CEB blog post, the writer stated that a recent academic paper further argues the greater the perceived risk of making a wrong decision, the more likely people will seek out more information.
Prospects are never 100 percent certain they are making the right decision. They may appear confident on the outside, but their stomachs are turning with fear inside.
Most people believe the choices they make result from a rational analysis of available alternatives. In reality, however, emotions greatly influence and, in many cases, even determine our decisions.
When confronted with a decision, emotions from previous, related experiences affix values to the options we consider. These emotions create preferences which lead to our decisions.
Damasio’s view is based on his studies of people whose connections between the “thinking” and “emotional” areas of the brain had been damaged. They were capable of rationally processing information about alternative choices but were unable to make decisions because they lacked any sense of how they felt about the options.
Emotion and B2B complex sales are two terms we do not normally connect. A CEB study claims that only 14 percent of B2B buyers see a valuable difference between the business value of various brands. However, personal value provides twice the impact that business value does on a B2B purchase.
When it comes to B2B complex sale decision making, Karl Schmidt from CEB Marketing sums it up this way:
“If we think about the risk we take on from making a large [B2B] investment…we’re talking millions of dollars. These are career-altering type risks and if we don’t think about what it takes to overcome that risk, from a personal, emotional perspective. . . then we’re missing where we as marketers should really be focused.”
Look at the chart above. You see the relationship between the personal risks that a B2B buyer experiences and the degree to which that drives some of these emotional connections.
Now let’s think about the potential risk any of us take on as a B2C consumer. For example, buying an iPhone. Sure, it may not do all the things we want; we may even argue with our spouse why we wasted money on the thing, but the relative risk is quite low.
As executives, however, we think long and hard about the risk we take on when making a large investment in a CRM solution, for example. Millions of dollars may be at stake.
These decisions represent career-altering risks. If we, as salespeople, do not consider what it takes to overcome that risk for our buyers, from both a personal and emotional perspective, then we miss the nucleus of the sale.
In my experience, you will find the emotional side of the decision in what the buyer regards as his or her personal win or loss. Saving your company two million dollars of expense is a sound and rational decision. However, on the emotional side, your department will lay off 30 of your co-workers.
Many times, because of this emotional side of the decision, prospects lack a sense of urgency. They can and will procrastinate more often than you expect.
Most salespeople move right past this flashpoint without earning the commitment. You must search for the personal side of the decision, which is emotional, and ensure your prospect commits to change.
Continuing our discussion of the factors which separate losers and winners of the sale:
Access to the C-Suite
One of the toughest jobs a salesperson takes on is the need to penetrate the C-suite. We assume the final decision in B2B complex sales occurs with a C-level executive or a group of them.
Because every salesperson in the world tries to reach the offices of senior leaders, they have put up many roadblocks.
Once you understand the direct correlation between winning opportunities and the number of executive-level interactions by the sales team on the buying journey, you will realize the importance of developing a strategy.
In my eBook, How to Secure Executive Appointments, I provide you with a plan to crack the C-suite code.
In executive interviews, buyers tell me they are bombarded with phone calls, voice messages, e-mails and referrals from others for salespeople who want to meet them.
Most salespeople do not succeed in breaking through because they do not bring any perspective to the buyers.
Moreover, if they do get in, the majority do not gain the opportunity for a second meeting. In fact, CSO Insights emphasizes that 53 percent of sales organizations report less than half of first meetings become second meetings. Why?
Poor positioning and preparation.
A vice president of finance shared this story with me:
“The sales rep wanted me to introduce him to my boss, the CFO, as he knew she made the final decision. I did not have the confidence that he was equipped and had the right solution, so I continued the process of asking for more information to stall that step. Introducing him would have been a big career mistake. On the other hand, his competitor brought a unique perceptive and with his solution made me look good in front of my boss. I am actually the one who suggested he meet her.”
Helping Buyers Form a Vision for the Solution
My interviewees indicated their winners delivered real value by bringing a new perspective to help buyers see their solution.
Although each salesperson may have his or her own definition, the concept of a buying vision is quite simple─it is the way you show your prospects how your product or service creates a solution for the “job” they want to get done.
This explanation may seem too obvious to many of you. After all, don’t your prospects already realize that they need to solve their problems or issues?
Not necessarily. Seasoned salespeople know that some of the thorniest pain points often go unresolved, at least until a sales rep enters the picture. Several possible reasons explain this circumstance: Prospects do not have the time, resources, or vision to seek out all possible solutions.
In reality, prospects do actively seek out new solutions at any given time. The good news? Studies by Forrester Research reveal that salespeople who create a buying vision end up winning out against the competition about 74 percent of the time.
That is an impressive win rate and a testament to the value of helping to shape a prospect’s vision for a solution.
The head of procurement for a large manufacturing company said, “Even though we used an RFP process, at the end we didn’t see much difference in products or services being offered. What made the difference was how the company made us see the impact their product had and the consequences of not fixing our problem. They had us rethink our criteria for a solution.”
For a comprehensive guide to win more RFPs, download our free white paper.
Missing a Coach
One clear distinction between sales winners and losers─winners develop coaches or champions around the account in development.
Every situation needs someone to take responsibility and help champion your product or service through the decision-making process.
We call this role The Champion, by far one of the most important roles in the decision- making process of an organization.
Many times, champions are called coaches because they have a stake in the game. They may personally benefit from the sale of your products or services, or those products or services affect a key area of the champion’s responsibility.
Often, his personal interest is to ensure his boss receives what he wants. A champion is also someone who wants you to succeed, who wants your solution to win.
However, please be aware of how much influence and power that person wields. Your champion will be most helpful to you if she holds credibility with other members of the buying team, especially the economic buyer.
The Champion can help you understand the decision-making and approval process, and coach you along the way. He will tell you what needs to be done, and whom you need to satisfy to reach the final decision to move forward.
The Champion can come from any level within or outside the organization. Find this person early in your process. You should not expect him to raise his hand and volunteer for this role; you must dig deep to find a champion. Fortunately, champions are present in all buying situations.
The CFO in one of my interviews said, “We selected the firm because it seems to have understood our issues better than the others and it paid attention to what mattered to each person on our committee. I had the feeling some of the other firms who proposed solutions weren’t listening.”
Don’t stand by and let sales slip through your fingers. Check in with yourself.
Figure out what you missed. Be extremely honest.
And use these factors to debrief your sale:
- Incumbent Advantage
- Access to the C-Suite
- Helping Buyers Form a Vision for the Solution
- Lack of a Coach
Also, take the time to read the content solutions offered in this blog post.
You’re in a tough business. You deal with your share of rejection. I know.
However, you chose sales for a reason.
The monetary rewards.
The personal recognition.
The opportunity to excel.
What’s more, while you may not think of it this way, you are in a helping profession.
When we can be of service to others, an occasional lost sale is a small price to pay.
See you on the upside,Bill
For more information, go to www.pleinairestrategies.com
Or call William L. MacDonald in San Diego at PleinAire Strategies LLC at 760.340.4277 or 213.598.4700