|Are you spending more time generating less business? There are reasons for that. No mystery here. The economy, tougher buyers, shrunken budgets, organizational changes, desperate competitors who undercut your prices, buyers’ attempts to commoditize everything we sell, risk aversion, software companies going out of business, being acquired. Ouch.
What are you doing about it? Are you changing the questions you are asking your prospects, digging deeper than ever before? That’s not a natural tendency for sales people, who, by nature, are generally optimistic. We don’t look for bad news, or things that will signal to us that a deal is being lost or it really isn’t there at all.
For you to spend less time generating more business you’ll need to be much more intent on learning what is really going on with your sales opportunities. You need to seek the truth. Only then you can focus on those opportunities that will offer the highest ROI for you.
Here is what you can do to assure yourself that you are properly qualifying potential business opportunities and acting appropriately to maximize sales effectiveness:
1. Understand that qualification is a process, not an event. Whatever can change during the course of your sales campaign will change. So you have to keep asking the same questions again and again, often of the same people. In order for you to continue pursuing an opportunity, you need ongoing validation that the prospect is going to buy, when they say they will buy, and that someone else has not already won the deal. If, for example, you don’t keep asking your prospect what their decision criteria are at that point in time, how will you know if your competition has influenced a change—that would favor them?
2. Your prospect gets to evaluate you—you get to qualify them. It will cost your company anywhere from $30 to $70,000 and more to participate in a full-fledged software evaluation. That’s a lot of money. So with that in mind, you have the right to expect your prospect to answer your questions, provide you with access to key buyers and decision makers and let you know where you stand during the progress of that evaluation. One way to assure that they do answer your questions, is by “training” them early on in the cycle, when they “need you more than you need them.” Make sure you get answers to your key questions before you provide them with what they are asking for, whether it be a completed RFP, product information, references, a demonstration, access to your company’s experts or a visit from your CEO.
3. Check again and again on the decision and approval processes. Approval levels have gone considerably higher during the last year. A VP who might have been able to approve a software acquisition of $200k last year may now have to go to the CEO for anything over $100k. If you don’t know that in advance it could mean a delay or worse—elimination at the CEO level for any one of a number of reasons unknown to you—unless you ask. Make sure you understand who will approve your proposal and have a plan for getting them involved earlier, rather than later in your selling efforts.
A salesrep who works for a client of mine didn’t ask who the ultimate approver was on a $2.8 million software evaluation where had been selected. The rep’s coach, the division controller, told him that it was the board of directors who would ultimately approve the investment. Through the efforts of the controller, the company’s CFO arranged a phone poll of the board, locking in the final approval and bringing in the deal within my client’s fiscal year. Had that question not been asked, the deal would have slipped into the next year.
4. Make sure that they are still going to buy. Budgets have been frozen, initiatives and projects halted, or it has been decided that development will be taken in house. If you are not asking the right questions often, you may not find out that they are not buying until it’s too late—after you have invested too much time. Other than for your solution, where else is your prospect spending money? Strategic projects only? Quick and inexpensive fixes to critical problems? Get validation from the person who will sign the check and/or whomever is paying for the investment in your software that nothing has changed regarding their intent to go forward with this purchase. You need to make sure that they are still going to buy first, then make sure they buy from you.
5. Can the buyer cost justify the investment in your solution? It’s no secret that senior executives are looking for ROIs of a year or less. Can you meet or beat that—and prove it? Does your buyer have to make a case for an investment to a higher level? Are they qualified to sell for you in the executive suite? Have you given them the information and tools that they need? Is there any chance that you would be invited to make your own business case to the ultimate approver, whether it be CIO, CEO or the board? Understand your prospect’s ROI requirements and make sure you developed the appropriate business case. If you don’t know how to do this, get help. Because if you don’t, there are companies who will simply not buy from you.
6. Is your solution or company perceived as risky? With everything that’s bad going on in the business world today, executives and boards are very, very risk averse. Especially in the software industry. Are you 100%, absolutely certain that you have proactively addressed all risk issues and that risk will not prevent your prospect from going forward with your offering? If all else fails, are you prepared to share the risk with your prospect where they pay you a percentage of your price and fees when they have achieved their objectives? More risk for you, less for them, but that’s what it may take to win a deal in these challenging times.
7. Is your prospect going to ultimately buy on price? You’ll want to know that now, early in the deal, not after a competitor dives for the deck when they suspect they are losing. Ask your prospect to explain to you the differences they see in your offering versus the competition and the value associated with those differences. If they don’t see a difference or they don’t see the value, you have some work to do. If it’s late in the deal, you may just have to accept the fact that you have been commoditized. You’ll need to do a better job next time.
8. After all the work you have done, are you going to get beat up by the VP of Purchasing or your prospect’s attorneys? Best to figure this out early on or it will cost you time and money. Speak to another vendor to find out how that prospect treated them. Or ask your coach how your prospect works with vendors—what you should expect. Remember this: when you provide real business value during the sales process while establishing relationships with influential executives, you earn the right to ask them to work on your behalf with tough purchasing people or lawyers whose job it is to squeeze all the value out of the deal for you. You need to educate your executive contacts that win-lose and lose-win always turn out to be lose-lose—for you and them. The key to spending less time generating more business is to ask the tough questions, often. Those tough questions will enable you to know what is really going on with your sales opportunities and allow you to make the right choices required to be successful.
Dave Stein is the author of the Amazon business best-seller, How Winners Sell. Before he founded his sales consultancy, The Stein Advantage, Inc., in 1997, Dave was employed by several leading-edge software companies in a diversity of roles: programmer, systems engineer, sales representative, sales manager, director of worldwide sales development, VP of sales, VP of marketing, VP of international operations, VP of client services, and VP of strategic alliances.