Posts Tagged ‘Sales Methodology’

The Best Qualifying Questions

June 4, 2010

As you have gathered, I believe in the value of intelligent questioning as the most important element in the qualifying process.  Here is another great example of a series of questions which will not only uncover the pain and it’s impact, but position you the seller, as a valuable resource.  Here’s an excerpt from Bob Apollo‘s recent post Sales People: can you resist the itch to pitch?.  The title is self-explanatory and Bob makes the point eloquently.  I’m a big fan of the questions. 

“Missing the golden moment…

Sales people who cannot resist the itch to pitch are missing a golden moment.  When a prospect acknowledges an issue that you are confident you can help with, the worst possible thing you can do is to jump straight in and tell them how.

Time to explore… 

Think of their acknowledgement of the issue as a golden opportunity to explore.  Instead of prescribing your “solution”, determine instead to learn more about their circumstances.  

What first drew their attention to the problem?  What are the consequences of the problem?  Who else is affected?  What would happen if no fix can be found?  Could they live with the status quo?  Have they tried to deal with it before?  With what results?  Why is solving it important now?

Interesting, important or urgent… 

You’ll learn an enormous amount by following these lines of enquiry.  You may even help your prospect to think differently, and to take a fresh perspective – and earn their respect as a result.  Perhaps most important, you’ll be a better position to judge whether the issue they have acknowledged is interesting, important or urgent to their organisation.

Interesting needs can get you considered.  Important needs can get you evaluated.  But only urgent needs will get you bought.  There’s no point in pitching a solution to a problem that isn’t regarded as urgent.  But by asking these questions, you may be able to elevate an interesting or important need to an urgent one – or to identify a related need that turns out to be truly urgent.  Or you may be in a position to conclude that there’s no urgent need to be solved, and nothing that you can do to secure a sale.”

Thanks, Bob, for your insightful post!

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State of the Art Objection Handling

May 25, 2010

Dave Stein’s recent post Sales Objections: Opportunity or Death Knell provides a great roadmap to handling objections through a process of qualifying the buying criteria throughout the sales cycle.  Such qualifying questions will keep you apprised of changes as the result of internal priorities or changes in competitive pressures.  As Dave rightly states, controlling the buying criteria at the conclusion of the buying process wins the deal.  Dave concludes with some excellent examples of handling objections exposed by the validation of the buying criteria, as well as a solid recommendation for organizational support of objection handling.

There are only two reasons you lose a sale….wisdom from Donal Daly

May 18, 2010

Usually I try and add some interpretation to articles like this.  For this one, there is no need-it stands on its own!  This was originally posted on the Sales 2.0 Network Blog in April 2010.  Enjoy

“One of the issues that I’m often asked about is how to improve Sales Win Rate.  Sometimes the question is presented as “What’s a good Win Rate?”, or “What percentage of deals that I bid for should I win?”  Of course there is really no universal answer to this question – and the reason for that is that it’s the wrong question.  In my opinion, energy is more productively spent in determining why you lose deals, and in my experience, the explanation follows a fairly predictable pattern. If that is true, then if you can identify the common attributes of lost deals, you can work to avoid deals with those attributes, or focus on how to overcome the weaknesses that gave rise to the failure. Then by definition, your Sales Win Rate will improve.

In reality there are really only two reasons why you lose a deal:

  • You Should Not Have Been There (pursuing the deal) In The First Place, or
  • You Were Outsold.

I will substantiate this claim a little later, but first I want to share some alternative perspectives.

When I ask sales managers why their teams lost a specific deal the most frequent responses include things like:

  1. “Well, he wasn’t speaking to the Decision Maker.”
  2. “She didn’t understand what the customer really wanted to achieve.”
  3. “We should never have bid in the first place, the customer is locked into our competitor.”
  4. “Our solution just wasn’t a good fit, and he (the sales person) tried to squeeze a round peg into a square hole.”
  5. “The competitor had a stronger relationship with the customer.”
  6. “There was never a project there in the first place.”
  7. “We didn’t understand the personal motivation of the Decision Maker.”
  8. “He couldn’t get the customer to understand our value proposition.”
  9. “She never realized that the budget was way too small for our product.”

Responses from sales people to the same question include many of the above, but there are sometimes some additional reasons given:

  1. “We’re just too expensive.”
  2. “We couldn’t provide a reference because we’ve never sold to that type of customer before.”
  3. “I never knew [the deal] had to be approved the technology committee.  He never told me that.”
  4. “The customer just doesn’t get it. I don’t understand it – she really needs our stuff.”
  5. “I never knew that the competitor wrote the RFP.”
  6. “He never told me that Capability X was important.”
  7. “My [internal] sponsor just didn’t have the juice to make it happen – even though he told me he did.”

For mid-to-large deals in an enterprise B2B market, the costs incurred in pursuing a sale will typically range between $10,000 and $100,000. Our research at The TAS Group has shown that it takes 50% longer on average to lose a deal than to win one.  Think about that for a moment.  If your sales team is spending more time losing deals than winning deals, what’s that going to do to your quota achievement?  Or, if you could fix the problem, what impact would that have?

No matter how you look at the reasons given above, in truth there are really only two reasons why you lose a sale:

  1. You Should Not Have Been There (pursuing the deal) In The First Place , or
  2. You Were Outsold.

It’s as simple as that – just two reasons. In my experience, failure is weighted fairly evenly across both. So, let’s look at these in a little more detail.

Reason 1. You Should Not Have Been There In The First Place

At The TAS Group, we discuss ways to help sales teams win 4 of 7 deals, instead of 3 of 10.  This means that you pursue fewer opportunities.  It’s not about ‘getting up to bat’ more often. In fact it’s the opposite.  In practice it means determining at the outset if your solution can uniquely and competitively add value to the specific customer that you are targeting. Of course it means research, and work, and understanding of what the customer wants to achieve, and how your solution might be applied to solve their specific problem.  This information is only useful if you understand what the competitor might be offering.  Often, it’s as simple as defining your ’sweet-spot’ customer – listing the attributes that describe the profile of the customer to whom you can competitively add value. When you hear yourself saying “We’ve not sold to this type of customer before – but I think I can make it work.” – then move on. You’re wasting your time.

If you look at the ‘lost deal’ reasons listed above, items 3,4,6, and 9 in the Sales Manager’s list, and items 2 and 5 in the Sales Person’s list fall into that category – you should not have been there in the first place.

Reason 2. You Were Outsold

Sometimes this is hard to accept. I know that in my case, if it’s not Reason 1, then I’ve been outsold. I didn’t understand what the customer wanted to achieve, I was not politically aligned in the customer’s organization, I didn’t understand the customer’s buying process, I chose the wrong competitive strategy, I failed to articulate my value proposition in terms that the customer understood, I failed to demonstrate ROI for my solution, or, more likely, a combination of a few of these.  Looking at the lists above, items 1,2,5,7,8, and 9 in the Sales Manager’s list, and items 1,3,4,6 and 7 in the Sales Person’s list fall in to this category. I’ve been outsold – someone else did a better job.

Now, even if you’ve done a great job in qualification – and that’s what you’re doing to pass the ‘Should I Be There In The First Place?‘ test, you won’t win all of the deals.  Sometimes, you will be outsold, 3 out of 4 is a realistic Sales Win Rate target.

* * *

When I express the perspective outlined here, I get a range of reactions, ranging from animosity (“Who does he think he is? He doesn’t understand what I go through to win a deal”) to guarded acceptance and excitement (“Wow, if we could actually achieve that, it would be incredible. We should give it a shot.”).

As we’ve watched our customers move to these kind of ratios it’s been really gratifying to know that we’re making that kind of difference for some.  I’ve spoken at length to those who excel on this journey, and there are a number of common attributes – some organizational, and some with respect to the tools they use to help them.  Organizationally, the companies just seem to be run better, and sales is viewed as the engine that fuels growth, and investment is commensurate with that view.  From a sales tools perspective, the common elements are a sales process that maps to how the customer buys, deep analysis of the customer’s political structure, and collaborative interaction with the customer to truly understand their business problem and what they want to achieve.

To demo or not to demo?

April 21, 2010

Many software sales professionals rush to do a demo.  Such a strategy is fraught with risk.  Check out this post from Sam Reese (CEO, Miller Heiman) on the Miller Heiman blog which offers some great advice and perspecitve.   I enthusiastically support the comment to Sam’s post from Bob Hatcher (a former colleague of mine from Lotus) who points out:

One thing to keep probing for is what they want to see or learn from the demo. A key question to ask could be framed like this: “Our products solve a lot of problems for our customers, so I am sure to target this demo for you, what would you like to see that would convince you that our solution would have value for you and would help to solve your problems?

With this question, even if you don’t customize the product/demo itself, you can customize the presentation of the demo.

In scripting demos I always break them down into three components:

1) What you say
2) What you show
3) Why what you showed is important to the prospect.

You can’t get to number 3 if you don’t know the answer to the above question!

Dave Stein adds some insight to this important topic from the point of view of having a precise demonstration strategy in your sales process-particularly for technology companies.

Sales People, Sales Process and Sales Metrics

March 12, 2010

I’d like to share a great post by Greg Deming at Peak Sales Performance (listed in my Blogroll as well) which takes you through 5 important points on the role of sales professionals, an 8 step sales cycle, metrics for each stage of the sales cycle, some recruiting metrics, and how to use the metrics to create a “Sales Excellence Template“.  Given the title, it makes sense to include it here on my blog!  

http://bit.ly/9G84Jp

The “sales excellence template” provides the best framework for building sales process metrics I have seen.  It truly is as simple as a manager inputing their annual goal, and working backwards to identify the metrics they need for each sales person on their team.  Here’s a back-of-the-envelope example:

Annual Goal    =$12M

“Over Assignment” Buffer     =$3M

# of Sales Excs   =8

Annual Goal/Exec   =$1.875

Average Sale     =$100k

Annual Deals/Exec   =19

The Sales Exec’s Annual pipeline would look like this:

119 First Presentations (10/month) 

 95  Needs Analysis  (8/month)

 62  Formal Presentations  (5+/month)

 53   Decision Pendings   (4+/month)

 32  Negotiations  (2+/month)

  19   Implementations  (2/month)

By tracking these #s individually and collectively, a manager has a road-map to measure performance.  They also can be keenly aware at any given moment as to the status of their business with visibility into problem areas where they can coach, motivate, mentor or initiate change.

One of my earlier posts discussed the importance of looking at the front end of the pipeline with the same energy as reviewing what’s closing.  By employing Greg’s template, that process is much simpler.

Close Often! Throughout the sales process-

February 8, 2010

Great post http://tiny.cc/MH4Z9  by Anthony Iannarino from The Sales Blog  on “closing” throughout the sales process, not just at the conclusion.  Constant focus on adding value with each sales interaction, and closing to “move forward” are key attributes for successful sales professionals.

The essential attribute is self discipline

January 19, 2010

Great post by S. Anthony Iannarino on The Sales Blog.  Check it out at  http://tiny.cc/dMfl5

  “To be effective in sales requires many and varied skill sets and attributes, all of which are essential. But only one of these attributes is the foundation for all of the others, making it the master key to sales effectiveness. It is the cornerstone on which all other attributes and skills are built. With this attribute your success in sales is all but guaranteed, and without it you are certain to fail.”

The Changing Face of Sales Leadership-

January 18, 2010

Another great post by Jonathan Farrington describing what company leaders should be thinking about as they assess their sales organizations and specifically, their sales leadership compentencies  (http://tiny.cc/BbQgB).  There are some thoughtful quotes including: 

There is a difference between leadership and management. Leadership is of the spirit, management is of the mind. Managers are necessary, but leaders are essential. We must find managers who are not only skilled organisers, but inspired and inspiring leaders.” – Field Marshall Slim

And…

Sales managers with an intimate feel for the selling process succeed because their staff regard them as part of the sales team but coaching the team is as important as playing in it. In other words, sales managers must be prepared to provide training, feedback and support to every individual within the team.”

Dealing with Prospect’s Perception of Risk

October 8, 2009

Bob Apollo has hit the nail on the head with his recent post regarding dealing with “prospect’s perception of risk” http://hub.tm/?rGvIg.  Sales teams that don’t explore the prospect’s perception of risk throughout the buying process risk failure or no decision.  Bob outlines three questions to explore, which expose the impact of the issue being addressed by the buying process:

  • What has caused the issue to become important at this point?
  • Who else is affected or impacted by this issue?
  • What would be the cost/impact of not dealing with this issue?

The answers to these questions will provide a roadmap to other stakeholders, and provide a means to avoid “no decision”. 

 

I recommend expanding Bob’s thesis and including a line of questioning and discussion which will expose the stakeholder’s individual professional and personal “wins” associated with the successful resolution of the problem to be addressed.  By understanding the impact on individual stakeholders, sales teams have an additional qualifier as to the individual and organizational focus on the successful implementation of a solution.

What Business Problem do you Solve?

July 14, 2009

I had a conversation recently with a real sales professional who reminded me in simple and direct terms, what I consider to be an imperative in sales discussions-WHAT BUSINESS PROBLEM DO YOU SOLVE?  He is in the sales training business (http://www.bettersellsolutions.com), and described an exercise with sales teams where he has them write down their best sale in the last six months.  Evidently the responses are 100% similar- “I sold 500 widgets to Acme Technology for XXX,XXX dollars.”  There is never a response that says I saved Acme Technology XXX,XXX dollars by eliminating bottlenecks in their distribution channels, and allowing them to expand into new markets…” 

It is essential to understand the business problem you solve, and drive the qualification discussion to that capability specifically.  In the best case, your discussion will result in a real opportunity that has high visibility within the prospective organization. In the 2nd best case you will know quickly that your capability is not a priority for the prospect,  which will allow you to move on to another prospect.