Category Archives: Agile Selling

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Take the 30-Second Survey on Dual Screen Selling

A number approaching “all” of B2B sales cycles start with a web delivered sales presentation.  This holds for both inside sales teams and also field sales reps.  Yet, according to our clients, few sales professionals of either stripe take full advantage of the interactive capabilities of web conferencing platforms to better qualify and engage customers on the other end of the second screen.  Nor are they executing critical sales process steps.  And according to those clients, opportunities are compromised and lost as a result.

There is no sign that dual screen selling is going to slow down any time soon.  Since it will continue to be with us, we’re curious about your experience with typical B2B sales challenges and the dual screen environment – take our 30-second survey (for sales leaders and sales professionals) and we’ll report back on what we learn from your colleagues and peers.

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Web Delivered Sales Presentations: The Good, The Bad, And The Ugly

Sam is stuck in a grind. He works for a large software company, delivering web based sales presentations day in and day out. Like most large organizations, this company has specialized roles in the overall sales process. His role is to present his solution, and then, if the prospect is interested, he hands the lead to a field rep. . His company has a well developed marketing automation solution so he gets plenty of appointments for sales presentations. He could deliver them in his sleep and often does. He told me he dreams about delivering sales presentations as a recurring nightmare. He’s bored, feels like he’s got more potential than this assignment, and worse, the conversion rate for these prospects is trending down so the answer seems to be to do even more of the same just to keep up.

When Sam related his story to me, I conjured up a vision of one of those dystopian movies filmed in sepia tone where dozens of other young, smart and talented sales professionals are chained to their desks enduring the same grueling process day after day. 

We talked about his career goals and what would make his current assignment more fulfilling. Then we reviewed his current sales presentation.  It was supplied by the marketing department, included very slick looking graphics and followed a familiar pattern:

  • Let me tell you about my company…
  • Let me impress you with the logos of our Fortune XXX customers…
  • Now let me tell you how this product works…
  • And, lets end by talking about next steps.

I was tasked with delivering this format as a young sales person, have witnessed it in full swing at dozens of companies around the world, and just this week, subject to it when I expressed interest in a new technology solution. 

It reminds me of the quote attributed to many including Benjamin Franklin and Albert Einstein (while neither probably actually said it), “The definition of insanity is trying the same thing over and over again, but expecting different results.”

I suggested we turn his grueling process into a more engaging dialog and have fun experimenting with different ways to implement it. Here’s what we did to the format:

  • A discussion about the problems and challenges the customer has getting the job done with the current solution. (The variation was starting with a blank slide to have the buyer lead the list, versus a partially filled out list to let the seller lead the dialog and encourage the buyer to add to it.)
  • A discussion about how these problems roll up to create executive level headaches. (Which I call “business issues”) For example, how a broken process delays the time to market for a new product or increases development costs. (Again, varying having the buyer lead or having the seller lead and guiding the buyer to supplement the dialog.)
  • A discussion about how these problems are impacting the business in terms of time or money. With the dialog lead variation option as well.
  • Segue to how the seller’s solution addresses the identified problems. Specifically tailoring the presentation to the problem list.
  • A short overview of a similar customer with similar problems and the resulting outcome. (Try the logo slide here as another variation.)
  • A dialog about who else is impacted by the problems identified.
  • Next steps.

After the first day, Sam called to tell me the results. Some of his observations included how the day flew by, how he was looking forward to each new meeting, and how much more dialog oriented the meetings were versus monologue centric. 

After about 30 days, Sam noticed that his choice to lead each diagnosis subject with examples or let the buyer lead was most productive based on the apparent presence of even keel attitude or lack thereof. If they were even keel he would lead, if they sounded like they had done their homework and were really serious about a purchase, he would encourage them to lead.

Now came the interesting part. Sam reported that after 90 days of this experiment, his conversion rate (from interest to purchase) almost doubled, he was told he was on top of the list to take on the next open field assignment, and he no longer experienced recurring nightmares about sales presentations!

If you’re one of those people stuck with a marketing presentation that doesn’t fulfill you, or a sales leader trying to get more performance out of your team, try this and let me know how it goes.

 

 

 

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The Trump Effect On Enterprise Selling

This is not a political opinion piece. I’m not commenting on policies in favor or against the new administration. I’m simply spotlighting a challenge and an opportunity in sales given the current transition in power.

The inspiration for this article came recently while listening to Jim Cramer’s show called Mad Money, where he evaluates investment opportunities and makes recommendations on buy/sell actions. The segment that caught my attention was focused on the Trump effect on Wall Street. Also a non partisan assessment of the ups and downs on Wall Street related to recent policy announcements with some insight into investment opportunities. It got me thinking about the effects of recent policy changes on sales people and sales campaigns.


The most obvious implication is for sales people who sell healthcare solutions or solutions to help companies comply with regulatory requirements. Both of these topics are front and center for the new administration which is likely to cause prospects in these categories to go into “wait and see” mode. For sales leaders in these segments, no decision outcomes are likely to increase and create havoc on forecasting and close ratios.


Secondarily are companies or industry segments that are spotlighted but have not yet experienced a policy outcome. This includes pharmaceuticals, companies with foreign manufacturing, and potentially even travel related businesses. There may be others in the weeks to come.


The point I want to make is that now is the time for sellers focused on these industries to pivot from their standard operating procedure. For example, when the dot com bubble went bust in 2002, Cisco’s sales retracted about 15%. But their closest competitors reported a 30% reduction in sales. Cisco pivoted while their competitors stayed the course. In the face of a frozen market, Cisco consciously branched out from their focus on IT and began a campaign to call on the C suite to compel investment into networking to deliver business results, not just implement updated infrastructure which was the focus of most IT purchases prior to the bust. Their pipeline from non-IT centric opportunities grew by 300% and mitigated the sales retraction that would have happened had they not pivoted. (As you may have guessed, I was consulting with Cisco on this pivoting strategy at the time.)


If you are selling into a market that might freeze like a deer in the proverbial headlights due to potential changes in policy, here are some practices you might want to sharpen:


1. Identifying the compelling reason to change. Whether your sales proposal is battling other uses for funds, or trying to unstick a frozen buyer, being meticulous in uncovering, articulating and confirming the reasons for change are of paramount importance. This means identifying the people/process/technology problems the buyer is experiencing, connecting these underlying problems to C level topics I call business issues (time to market, cost management, competitive differentiation, and more.), and calculating the cost of not taking action. The three components of a compelling business proposal are critical for overcoming the distractions of potential policy changes or mitigating the impact of an actual policy change if the business proposition is compelling. This orientation requires the seller to get out of a capabilities focused dialog and into a problem hunting, value articulation and stakeholder threading dialog.


2. Incorporate more powerful stakeholders.  As Cisco found out, the more powerful the stakeholder the less difficult it is to compel action in the face of uncertainty. Lower level stakeholders tend to get scared and withdraw during times of crisis, so they need help overcoming this natural behavior mode. An Agile seller will announce the requirement to incorporate more powerful stakeholders as a result of concerns about wasting time given policy implications, and hold the line if pressured to relent. Use the potential waste of time as a reason to bring more powerful stakeholders into the conversation.


3. Qualify, Qualify, Qualify. When markets freeze, your time allocation becomes critical. As I’ve said before, a prospect that won’t buy robs you twice. First they rob you of the time you spent with them with no results to show, and second they rob you of the time you could have spent with a different prospect that was in a better position to buy. In times of crisis, BANT (Budget, Authority, Need and Timing) is no longer a viable qualification model. The Agile seller shifts to a disqualification model. In effect they put the buyer in the position of having to convince the seller that they will buy even under unusual circumstances. In 2009, at the height of the great recession, Imprivata, a provider of single sign on solutions used this model to separate tire kicking prospects that had too much time on their hands and no money to spend from those that were willing to help Imprivata sell more effectively. Their business grew 47% during the worst year of the recession. The secret to their disqualification process? See items 1 and 2 above. Or read more here.


In a nutshell, the new administration is and will probably continue to create crisis in specific industry segments. The Agile seller will learn to use the situation to compel their contacts to collaborate more effectively given the obvious potential for wasting time. And they’ll take the opportunity to sharpen their selling skills and turn adversity into an advantage. 

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“I’m Sorry, We Don’t Have The Budget”

This is my favorite objection… Ever!

Actually, I’d like you to think of of it as an invitation, not an objection. So it’s my favorite buying invitation, ever! I’ll explain…

Every seller has heard “lack of budget” as an excuse on multiple occasions. When I conduct workshops on being a more agile seller I gather the most frustrating sales challenges from the audience. Lack of Budget is usually in the top five.

Let’s start by translating what it really means. When a contact says, “we don’t have a budget for this”, they’re really saying, “I don’t have the authority to change the budget.” This means someone else has the authority to execute a reshuffle of the budget.

Now comes the interesting part: The agile seller uses lack of budget as an invitation to meet the real budget authority and sell larger deals.

A while back, I had a LinkedIn message exchange with a former colleague of mine, Steve Flannery. Our quick exchange reminded me of a time when Steve tackled this challenge in spades. I recall reviewing his “year in advance” forecast with him during a Q1 Ops review several years ago. During the review Steve revealed his largest customer, Unisys, would not be spending any money on our solution in the coming year. They were dropping from spending over a million dollars a year to zero – nada, zilch. When I asked why, he described a situation where Unisys was consolidating from five product lines down to one and laying off personnel, leaving them saturated with our software solution. He ended his story with the words, “so they slashed the budget”.

I suggested it was an invitation to meet with the person who slashed the budget.

Steve set up a meeting with the General Manager of this particular Unisys division. When Steve met with the GM, he found the situation was even worse that he previously understood. As a result of waves of personnel layoffs, their best remaining people were shopping their resumes and were likely to jump ship. That meant the GM wouldn’t have enough of the right people to get their only remaining product line to market.

This opened up an opportunity for our services, and Steve ended up closing a $75M contract to insure the one remaining product line succeeded.

Here’s what I learned from Steve’s experience:

  1. If there’s a big problem lower in the organization, it’s probably more painful higher up.
  2. Budget is an amorphous solid. If you forgot your high school chemistry, an amorphous solid is one that can change shape, usually by adding some heat.
  3. The Agile Seller uses lack of budget as a reason to meet with the person who can reshape a budget.
  4. An effective problem diagnosis can create a larger opportunity with the person who has the authority to move money around.

Let’s exit Steve’s example, and talk about the everyday, ordinary selling campaign. Can a seller still use lack of budget as way to get to a decision maker and overcome the obstacle? The answer is yes, if…

If… the seller does an agile job diagnosing the problem set and uncovers the impact of not taking action. When done effectively, the contact will usually respond positively to a request to collaborate together to get the purchase funded, including taking the message to more powerful budget holders.

So the next time your hear “no budget”, translate it in your head as an invitation. It’s an invitation to diagnose effectively, meet other stakeholders and create a larger opportunity.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. The Enterprise Selling Group is a leader in delivering training, coaching and project oversight to improve the agility of sales teams around the world.

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RFP Strategies

No matter what you call it, RFP, RFI, or RFQ… the success rate for winning unsolicited requests for proposals are dismal. If a buyer sends out 10 bid requests for an RFP, statistically each vendor only has a 1 in 10 chance of winning. That’s much worse than a normal 1 in 3 win rate for most line items on an average sales rep’s forecast.  But if the RFP is rigged for a single vendor, then all the other vendors have zero chance of winning.

So, back to the question, do you bid? I’ll say it depends. I’ve helped many companies improve their RFP win rate, usually very dramatically. But the strategy is very heavily dependent upon knowing which RFP request to ignore. The best way to ascertain if you should walk is to test the RFP. Here are a few of my favorite test points:

Posture

“As the leader in an industry that is growing dramatically, we don’t have the luxury to respond to unsolicited RFP’s. If you would like to evaluate our solution for your needs, we’ll need to engage in a dialog about your business in a more direct manner.”

One of the best methods for increasing your win rate and reducing wasted sales cycles on unwinnable RFP’s is to posture you way out of the process altogether. Although ideal, this strategy usually only works for the leaders in an industry and has to be truly aligned with a buying frenzy.

One of my clients recently hosted a prospective CIO customer during a headquarters visit. After the VP of Sales gave a very energetic overview, the CIO implied that the next step would to tender an RFP for response. The VP of Sales responded with a solid posturing strategy, “As you know, our technology is in the perfect storm of opportunity, market leadership, and high growth. We don’t do RFP’s, we can’t afford to.” The CIO responded, “Yeah, I can see your point. OK, we’ll skip the RFP and go direct to an evaluation phase.” That’s how posturing is supposed to work.

Test their Resolve and Intention

Of course, not everyone is a market leader in a perfect buying storm, and when a quota has to be met, every opportunity should be evaluated. (Notice I said evaluated, not pursued.) I suggest a series of tests to determine their intentions about your solution and to improve your position should you decide to pursue.

The Shadow Story

I worked with an experienced sales management professional who had a saying, “An RFP is the shadow of the story.” What he meant was when you receive the RFP it’s focused on the requirements. What’s missing are the reasons behind the RFP. What unresolved business issue is driving the RFP? What specific people/process/technology challenges were linked to each solution requirement? How big are these problems in terms of money, lost opportunity or other value proposition?

The first place to test an RFP is to ask the prospect if they can share the story behind the RFP. If they refuse, you’re not on solid ground. But if they agree, you have some indication that you are needed in their RFP process either as their first choice (good footing) or an important price/functionality reference point (not so good).

This is your opportunity to not only understand the story behind the RFP, it’s also a chance to change it. This is where the next test comes into play.

Adding Challenges and Requirements

If you have the opportunity to hear the story behind the RFP, you have an opportunity to change the story. This is where you look for problems or challenges that have not been identified, link to your differentiators, and have value for the prospect. There is always something they overlooked.

If they accept the suggestion to change the RFP to incorporate the challenges and associated required solution capabilities you suggested, you have another favorable data point. If they refuse, you have a negative data point.

Reprioritizing Challenges and Requirements

Sometimes you have a capability that differentiates your offering. Look for the opportunity to get a priority ranking of key capabilities. If you have a differentiator that is low on the list, ask about the pain associated with the challenge it addresses. The more pain the higher it should be on their priority list. Conversely, look for competitor’s differentiators. If they are higher on the list, a review of the pain (or lack thereof) behind the associated challenge could help to lower the priority of a capability that you can’t address as well.

If the prospect engages you in the reprioritization dialog and responds favorably to suggested changes in priorities, you have another favorable data point. If they refuse, note the negative data point.

Trade Offs

There will be occasions where you can’t address a capability as described in the RFP, or you address it differently. This is where you request a trade off. You’re trying to get the customer to accept an alternative capability or trade a different capability for the one they specified. If they accept, your position is stronger, if they reject the request, you have another negative data point on your position.

Stakeholders

Another test is to request access to the stakeholders that would benefit from the solution. If they allow the request, you have a stronger foothold, and you may be in a better position to influence changes to the RFP. If they deny the request, you have another data point that may indicate your solution is not valued. If you do get access to the stakeholders, that’s your best chance to re-engineer the list of requirements by bringing up challenges they didn’t anticipate. (see above)

Date of Submission

Another good test point is to ask the prospect if you can be late for the submission date, whether you need it or not. If they agree to accept your submission late, it may be an indicator that you are valued in their RFP. If they reject your request, you have another data point that doesn’t indicate a position of strength.

Conditional No-Bid

At one point in my sales leadership career, my sales team came to me with a very comprehensive RFP tendered by a large corporation. The sales team wanted to secure a large technical team to spend several weeks assembling our response. I said, “No”.  One of our competitors was the incumbent in the account and we had no role in building the specification for the RFP. So I asked for an audience with the RFP committee. My sales team relayed the request and the RFP committee agreed to meet with me.

During the meeting I requested the story behind the story. They declined to share any information. Then I asked if they could extend a longer period of time for our response.  They said if we wanted to compete, we had to play by their rules. Then I asked for access to the stakeholders that would benefit from the purchase. Once again they said, “No”.

I walked away from that meeting with the feeling that we were not their favored vendor. When I got back to my office, I wrote a contingent no-bid letter. I addressed it to the CEO of the company.

In my letter, I explained that we were the leader in our industry, that we were excited about the opportunity to potentially add value to their business, and so on. But, I explained that without more information about the circumstance that brought this requirement to the surface, we could not possibly tender a proposal that would hit their business needs as well as we probably could. I suggested that if the circumstances were to change, and they were willing to share the information, we would be happy to submit a proposal, but in the meantime, we had to decline the RFP. This is what I call a contingent no-bid. I leave the door open, but decline under the current conditions.

A few days later I received a phone call from the CFO of the company. He said the CEO had asked him to get back to me personally. He told me that there was no budgeted purchase planned. He also explained that this group of people were in-between projects and were being funded by a training budget until they were assigned to a project. In other words, there was never going to be a purchase. He apologized for the confusion and asked me if there was anything else he could do for me. I said, “yes, there is!” I asked for a meeting with the CEO and the CFO to simply describe how we could address their business challenges better than the vendor who was currently supplying their solution. He said he would look into it. (I eventually got the meeting). More importantly… I asked him to please not share the information he just disclosed with the other vendors involved in the RFP. He laughed and said he would let it run another 30 days before shutting it down.

A contingent no-bid is an effective test for determining if the prospect needs your response. If they do, they will call you back and attempt to talk you into the response. If they don’t, you were not going to win, and best case, you were only there for pricing comparisons. Better still, if worded correctly, it leaves the door open if the circumstances change.

Improving Your RFP Hit Rate

The quest to improve your RFP hit rate is highly dependent upon setting a goal to NOT reply to blind unsolicited RFP’s. If you can posture your way out of responses you’ll save a lot of resources and project yourself as the most attractive solution. But if you have to reply to win, you can use the strategies listed above to improve your position and test the reality of your chances for winning. If the tests indicate a weak position, you should feel good about walking away from the situation before you invest any resources into the response. After all, if there’s no way for you to win, the unsolicited RFP robs you twice. First because you can’t win this deal, but they also rob you of the time you could have spent on any opportunity that you could have won.

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Selling Services

Michelle was nervous. She told me she was worried she would lose her sales job for a well known technology company. As a single mother of two teenage boys, her anxiety was difficult to avoid noticing and uncomfortable to watch. As she detailed her situation, varying between 70-90% of her quarterly quota for several quarters in a row, I had to agree with her. If she didn’t do something soon, she would need to dust off her resume.

In her defense, she described several reasons for the shortfall in performance: the flagship product was experiencing new competition at the low end of the price spectrum, her territory had been cut in half the year before, and several new product introductions failed to meet expectations for revenue growth across the company. After some prodding, she shared the good news, she had several loyal accounts that stuck with the flagship product, had been open to evaluating the new products, and in general, were still steady state revenue producing accounts.

After poking on several strategies for improving her performance, I asked about her services revenue. She scrunched up her face and explained that she has tried to sell services but the notion usually falls on deaf ears. As I dug deeper into the subject, I concluded she was selling services with a datasheet, not by creating need. 

Here’s the strategy we developed to help Michelle turn the lackluster results into a quota achieving business. 

People buy services for three reasons:

  1. They don’t have enough people to get a task completed. Almost every team feels like they are short handed, so probing for this problem almost always hits pay dirt.
  2. They don’t have the skills or knowledge to complete a task. While difficult for some to admit, if there is a change in technology, or the product you’re selling is new to the customer, it makes it easier to uncover.
  3. The requirements to maintain low value activities robs resources from higher value activities or vice versa. If they are bailing water out of a small boat, its difficult to take time to start the motor… meaning its difficult to focus on more value added activities if they’re swamped with mundane tasks. On the other hand, if your customer has to choose between installing your software or responding to a fire drill imposed by a prominent internal customer, you lose as well. In either case, services can unburden your customer so they can focus on high value add activities while you execute on low level activities like installation or training.

The challenge for the seller is to uncover one or more of these conditions to create the need for services. Simply laying out your service capabilities (data sheet selling) isn’t sufficient to create the need for services to augment a product sale.  The seller has to surface the problem and then tie that problem to a lack of results.

The second challenge is to develop this problem definition with a level of authority that would not perceive services as a competitive threat to their own job. The lower your contact level, the more likely they will view a service option as undermining their value add to the organization.

Michelle picked three organizations that still had not deployed her solution since their purchase months before. A key part of her strategy was to target senior level management who were more sensitive to the lack of results than they were to insecurity about outsiders contributing to the initiative.

The results were truly life changing for Michelle. All three of the opportunities identified by Michelle agreed that one or more of the problems above were impeding their deployment of her flagship solution which in turn was delaying their achievement of financial results. Even more powerful, when one of the target accounts implemented deployment services, they realized they needed more product, so Michelle created more product opportunity by getting the shelfware deployed.

Michelle ended up at 107% of quota for the year, and has since integrated a services strategy into all of her major sales opportunities.

If you’re looking for a way to improve revenue results, build more loyal customers, lock out competition, and elevate your value to your customers, I suggest you take a look at a services sales strategy. You’ll need to get comfortable looking for the three people related problems identified above, and bringing the problems to the attention of a senior leader who has a stake in the outcome of the initiative at hand.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.

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Forecasting Accuracy: How to Clear the Fog

In the 1966 film Blow-Up, a London fashion photographer named Thomas unknowingly documents a murder. At first, Thomas doesn’t notice the crime hidden in his photograph. The blurred background accentuated by shadows and foliage make the scene invisible. After he repeatedly blows up the image, zooming in over and over again on what seems to be a minor feature, is the disturbing truth revealed: a terrible crime has been committed and the photograph has made Thomas a witness. The most important thing in the photo had been concealed in the background all along.

I mention this movie because it reminds me of forecasting. Many times the reason for buying or not buying a solution are in plain site, but hidden by the shadows of other priorities. 

One of my client companies sells software to aid in the development of software. They had asked me to analyze a set of loss and no decision outcomes to understand if there were any trends they could get an upper hand on. I first interviewed the sales teams, then I reached out to the buyers for each opportunity. In one particular case, the sales person classified the no decision outcome as a lack of budget. When I talked to the buyer, he told me that the company was growing so fast, and hiring so quickly, they ran out of parking space. It turns out the CEO redirected any excess funds to build a parking garage, pushing many other purchases on to the back burner for sponsor and seller alike.

In this case, the hidden “crime” was actually in plain site. However, to reveal it, the seller needed to ask a few more questions. When I was a young sales person working for a technology software company, I had the pleasure to take Rick, our Senior VP of Worldwide Sales on several high level relationship building meetings with my most important clients. I noticed in every meeting Rick started each conversation by asking about the client’s business… “how’s business?” he would ask, or “I read about the recent acquisitions your company has executed, how are those working out?”, on occasion, being even more direct, “I understand your CEO has announced company wide cost cutting initiatives, how’s that affecting your team?” 

My reaction to his questions varied from wondering why he would ask a senior technical leader about business, to kicking myself for missing the elephant in the room when he had obviously done his homework better than I did. 

After one particularly hair raising insight gained from one of his broad, “how’s business going” questions (my client revealed a merger pending with one of our other customers who had a much better pricing arrangement with us), I began to appreciate the value of his line of questions. He was purposely trying to uncover the priorities of the client both hidden and in plain view. In most cases, the answers provided gave me better insight into the forecast likelihood of the opportunity, both good and bad.

The current business issues of your customers will dictate their buying behavior. When the sponsor goes to the funder for sign-off, the current business issues that have his or her attention will influence their desire to fund or not fund a purchase request. For instance, cost cutting initiatives will put most purchases on hold, while prioritizing purchases that can save additional costs in other areas. A recent merger announcement can also put purchases on hold until the dust settles. Other business issues like changing competitive landscapes,  or changes in federal regulation could be positive for many selling situations. Rick taught me to evaluate my selling opportunity against the current business issues of my prospect to get a better insight on the forecast likelihood of every opportunity.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.

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Rationalizing a Value Selling Question

Asking about the value of solving a problem is critical for helping a buyer prioritize a purchase against many other competing initiatives. One of the most common obstacles to mastering consultative selling or becoming a Challenger is getting a buyer to answer a question about the value of addressing their problems. Sometimes they say they don’t know, hadn’t thought about it, or worse, challenge you on why you would need to know the answer.

I stumbled onto a way to overcome this challenge years ago while working for a small start up company. I was in the Seattle area calling on several prospects, one of which was a company called Sundstrand, the company that makes the black box recorders for the aviation industry. (You know, the box that can survive the worst air disasters, and yet for some reason, they don’t make the rest of the plane out of the same material! jk)

I was meeting with John, a senior project engineer. At some point in our dialog, John became very adamant about bringing our software on site to evaluate it before committing to a purchase. He wanted a copy asap. I agreed that would make sense, but added that I wanted to know what value my solution could provide to his company. His response, “Why would you need to know that?”  I had to think on my feet, so I replied, “My management only allows me to conduct three evaluations at any given time, so I prioritize the allocation of evaluations based on which companies need it the most.” (This wasn’t exactly true when I said it, but it became my mode of operation from that point forward.)

He nodded his head and chimed in without further hesitation, “We were late on our last project for Boeing, which resulted in over one million dollars of contract penalties. My boss was fired, so now I have a new boss. I’m trying to show him if we had your software, we could avoid the same set of problems we had with the last project.”

I was elated! Even if John couldn’t get his boss to fund a purchase with this high of a value proposition, I could use the information to gain access to even higher levels of authority. In the end, I had a purchase order in less than 30 days.

Over the years, I’ve learned that you have to be ready to rationalize the reason for asking about the value of solving a problem. Here are some of my most productive approaches:

1. Combine Scarcity with Their Motivations. Just as I did with John, connect the scarcity of a requested resource to something they want. John wanted an evaluation in short order, so I connected my question to his request. If they ask for a reference, or technical support, or any of several other costly activities, use the same approach.

2. Collaborate on a Positive Outcome. This is where I usually spell out the buying process with something like, “Well, if you decide you want to buy this solution, you’re probably going to have to rationalize the reasons why for your management, otherwise you and I will spend a lot of time on this initiative and may end up getting denied just because we aren’t prepared to justify the purchase. I want to make sure we have our ducks lined up in advance.” In essence you’re offering to collaborate to help make your contact successful with their initiative.

3. When these fail, combine and elevate. Even when you master the first two approaches, you’ll undoubtedly find, as I have on many occasions, that your contact doesn’t have the knowledge or insight to answer the question. My suggestion is to fall back on number one and two above and combine with a request to meet someone who can answer the question. For example, if John couldn’t answer the question, I might have said, “well, if this evaluation is important to you, can we discuss this question with your boss, so that I can prioritize an evaluation in your favor?”

Becoming a master at uncovering value will help you to reduce no decision outcomes. Most complex solution sales organizations report 40-60% no decision outcomes, and one of the most common contributors is a lack of awareness on the buyer’s part about the value the solution can enable. If this topic is not explored in relation to a purchase of your solution and a competing alternative use of funds is better prepared to address the issue, you’ll get left in the dust by an invisible competitor.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.

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A Formula For Overcoming “No Budget”

Laura had strawberry hair and a freckled complexion. She was the only administrator for a small start-up company I joined. It was my first day on the job and she took a seat on the other side of my desk. She let a smirk grow on her face and then announced, “boy are you stupid”. Taken aback, I just squinted my eyes and asked, “what do you mean?”

“All of the previous salespeople quit. No one has been able to sell this product for two years. You have the distinction of being the only sales person now. Do you think you know something they didn’t?” She prattled.

I just smiled and said, “we’ll see”. But I have to admit, she had me rattled. During the interview process there was no indication there was a lack of sales or that all of the sales people had resigned. (Of course, I didn’t think to ask specifically on either topic.)

My first sales call was on Lockheed Missiles and Space (as they were called then). They had five copies of our software and had been evaluating it for close to nine months, so I went to check in on the situation.

I sat down with Paul, a lead engineer for Lockheed and identified by my predecessor as the sponsor for the purchase. When I asked how the evaluation was going, he pulled out a list of items three pages long.  I looked through his list and noticed that most of the items were product enhancement requests, with very few bug fix requests. He said my company had made progress on the list, but there was still a long way to go. He tried to give me hope by pointing out they had reserved budget for the purchase early in the next fiscal year; five months away.

Having spent a few years in software sales, I had seen this behavior before. There was only one way to test it, but it’s a low downside gamble, so I said, “OK, it looks like you’d prefer to wait for the perfect product. In that case, I’ll have to pull the evaluation copies out today and get back to you when we’ve made more significant progress with your product enhancement requests.” His eyes opened wide and the shock rolled across his face. He stammered, “but wait, you can’t, we’re in the middle of a project”. That was the answer I was hoping to hear.

As I came to find out, Paul’s team was troubleshooting the power supply hardware for the Hubble Space telescope. This one critical piece of hardware was not performing to specification and holding up the whole show for the Lockheed contract. Paul was confident our software would help them identify and correct the problem.

If he had any hope of keeping the software past the end of the day, I suggested he take me to his boss. Twenty minutes later, I was sitting across the desk from his boss. Tony was a very senior project leader for Lockheed, and although it seems like a lowly title, his total budget allocation for his part of the project was probably north of a hundred million dollars. 

I laid out my case for reallocating budget to my software. They were behind on the delivery of a very high profile project, which could result in millions of dollars in contract penalties. They had spent months evaluating our software and had concluded that it was capable of helping them identify and fix the problem. The only thing left to do was cut a purchase order.

Four days later I had the first purchase order in my company’s history in my hands. The first person I showed it to was Laura. I would have thought a two hundred and fifty thousand dollar purchase order would have at least merited a comment, but no, Laura flipped her hair back, smiled and walked away. It took me a few more months before I started to understand Laura’s sarcastic sense of humor. 

A few days after I received the Lockheed order, my sales manager, Brian, pulled me aside and said that one of the board members wanted to take me to lunch to celebrate the order. Brian was concerned that my success might cast a bad light on the leadership team since they hadn’t generated any business previously, so he asked me to be very careful with what I said during my lunch.

MJ was with a silicon valley venture capital firm and a significant investor in our company. She was in the early stages of a long battle with MS, but still very ambulatory. (The next time I would see MJ, she would be in a wheelchair.) She kept her raven colored hair short, and dressed in traditional silicon valley business casual manner; black slacks, flats and a light colored blouse.

We shared a little chit chat about our respective backgrounds and then MJ asked about the Lockheed order. She wanted to know how I did it. When I told her the story I just shared with you, she said I needed to “codify it” and share it with the rest of the sales people in the company (when they were hired). When I asked what she meant by codify it, she said, “break it down and put it into a formula”. To this day, I don’t know if she meant it literally or figuratively, but I went ahead and developed a formula to describe the sale.

If you’ve ever been frustrated to hear the words, “we don’t have the budget to purchase your solution”, take note. I seemed to have based my entire sales career on selling leading edge products that never had the luxury of established customer budgets so this formula became invaluable to me..

Overcoming No Budget (ONB) = Vision x Impact x Power x Proof

There are three components to Vision: The Current Business Issue (CBI), the underlying People/Process/Technology (P/P/T) Challenges, and your Capabilities. If you can help your prospect see how your Capabilities can address their P/P/T Challenges which helps to resolve a Current Business Issue they care about, you have created a Vision. In the Lockheed example, the power supply wasn’t meeting design specs (Challenge), which was causing a delay in meeting contractual obligations (CBI). Our software was capable of identifying which electronic components were causing the power supply to fail under a range of conditions.

Impact is simply the value of addressing the business issue. In this case, there were contract penalties worth millions of dollars looming over Lockheed’s head.

Power is about getting the buy-in and priority of the person who can allocate or re-allocate funds to the purchase. In this case, Tony, the project manager, had the authority to reallocate budget to purchase my software.

Proof is the process of validating the solution’s capabilities, usually through an evaluation, but in some cases with less time intensive activities like demonstrations. After nine months of playing with our software, Paul was well versed on what it was capable of doing.

The final observation I’ll share with you about the formula is regarding mathematics. You’ll see that each component of the formula is accompanied by a multiplication factor. There are two corollaries at play here. The first is the more effectively each component is established the higher the outcome. In other words, the size of the transaction increases with better execution in each discipline. While this is a great lesson in itself, the second corollary is the most valuable to me. It’s the impact a Zero has on multiplication. This means that if only one component is a zero, the whole equation goes to zero. Or more specifically, you lose the sale to a no decision.

In reality, I’ve never lost a sale to “No Budget”. However, I have lost a sale because I couldn’t differentiate my capabilities in light of their challenges or business issues. On occasion I’ve lost because I couldn’t uncover the impact of not taking action. I’ve also lost because I couldn’t establish the Vision with the person who could re-allocate budget. And, I’ve lost because my products were not able to perform as advertised under close scrutiny: But never because of lack of budget. 

The next time you hear, “we don’t have any budget for a purchase like this”, pull out this formula and see what’s missing to determine if you can do anything to overcome the zero(s) in the equation.

Missed Kevin’s other posts on Sales Agility? Take a look at his most recent posts here.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.

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One Reason Buyers String You Along: And How To Turn It Into Your Advantage

Michael came to me with an interesting situation. He had a prospect that clearly identified a need (they said their customers’ were beating them up over a problem with their product that Michael could help them solve), they also told him that he was their top choice, and there was a budget line item that could be tapped for this purchase. They originally said they would be placing an order in two weeks, but since then, several months had passed. In the meantime, the prospect continues to engage, but has focused Michael on explaining and addressing one technical question after another, with no end in sight.

I asked Michael how the company was doing, business-wise. His quizzical look encouraged me to explain further. “Are they profitable and growing or are they struggling in any part of their business”, I added. He shrugged his shoulders and said, “they’re fine”. I pulled up a browser, performed a search, found their financial reports and reviewed their most recent quarterly filing. The results cited an $11 million loss as well as a 17% decline in revenue for the product set related to Michael’s contact.

Michael squinted as if he was processing this information, but remained silent. So I asked him, “if you were the CEO of this company, had to report a profit loss and a significant decline in revenue for a key product segment, what would you be doing?” Michael grimaced and replied, “I’d be pinching pennies”.

“Exactly” I replied in support. Michael nodded his head and said, “so I guess I should drop this prospect and look for another to replace it”, seeking my agreement.

“On the contrary”, I replied, “you’re in the driver seat now, and should leverage the opportunity.” I went on to suggest Michael sit down with his contact, review the financial results to gain agreement the opportunity was on hold because of the current financial predicament. When he gains agreement, I suggested he offer to collaborate on a strategy. If, in fact, they were getting beat up about a shortcoming in their product, this could probably be the reason for the revenue decline. The strategy would be to approach upper management with Michael’s solution as a way to reverse the revenue decline and address the profit problem. In effect, Michael’s solution could be projected as a strategic solution to a concern the CEO’s is anguishing over.

Companies are like people. When a crisis hits, most behave very predictably; usually to their detriment. Often times, they need help seeing a way out of their crisis, but more importantly, if you have the key to the solution, you have power. The challenge is to thread the subjects together and convince your sponsor to take you up the chain to gain buy-in. I’ve found that sponsors are much more likely to open the door to upper level management in a crisis situation than they are in an even keel situation.

Personally, I’d rather sell to a prospect in crisis over a prospect that is fat and happy.

However, it’s not always evident there’s a crisis, especially with lower level contacts. Worse, they may decide it’s better to string you along rather than tell you they’ve been put into a spending freeze, hoping time will eventually heal the situation. But as the saying goes, “hope is not a strategy”.

I encourage you to look up the financial news and recent press releases for your top opportunities, if not all. Then put yourself in their shoes to anticipate their behavior. You may find that your solution is exactly what they need to address a strategic problem versus a tactical problem, and that puts you in the driver seat to request access to more senior level decision makers.

After all, there’s really no such thing as a spending freeze. They’re still paying the light bills and other necessary expenses. It’s better described as a stringent prioritization initiative. Your job is to help them see how your solution should be re-prioritized in light of the current crisis.

For a very interesting story about this subject with a huge payoff, read my previous post entitled Buyer Psychology In Times Of Crisis.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.