Tag Archives: getting past no

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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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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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Buyer Psychology In Times Of Crisis

It was mid January. When Steve began the PowerPoint overview of his annual sales plan, I wasn’t expecting any surprises. Steve was one of the top performers nationally, and was always very consistent in forecasting and productivity. But something was out of place on a spreadsheet showing projected bookings by account. 

After several years of consistently booking over a million dollars a year with a division of Unisys in the San Diego area, Steve’s revenue projection for the year was a big fat zero. Nada. Nothing. 

When I asked about the anomaly, Steve was prepared. He described a tumultuous situation at Unisys. This was at the time when PC sales were exploding, but the by-product was a slow down in orders for higher end computing solutions. This particular division of Unisys designed mainframe computers for large scale enterprise applications. They were caught in a market transformation. As a result, they were in the process of scaling from five different products down to one. Now, Steve explained, they had too much of our electronic design products on hand, leaving them over saturated with our software. He was basically crossing them off of his list.

“I wonder what the psychology of the organization is at Unisys as a result?” I pondered out loud. Steve knew the answer. He told me they had even bigger problems now. Since the writing was on the wall for pending layoffs, all of their best people were shopping their resumes for employment options. “Unisys could be a ghost town in a couple of months”, Steve explained. “If they can’t do something to stop the exodus of their best people, they won’t be able to ship their one remaining product.”

I smiled and said, “then you have a gold mine on your hands.”  Steve looked at me quizzically, and I suggested he set up a meeting with the General Manager of this Unisys division. I was confident we could help solve both problems.

Steve set up the meeting with the GM, and he confirmed what Steve had learned from hallway gossip. They were already losing people, and the GM said his number one concern was about losing his best people and missing deadlines for the remaining product set. In anticipation of his confirmation we had prepared a very tailored solution. We suggested the GM sell us his design organization (for one dollar, it turns out), and then enter into a design services contract with us to deliver his key product on time. In essence, his team would change jobs to a high growth, attractive and stable company without changing offices. Plus, we had enough growth in our services business to employ everyone on his payroll, negating the need to job shop for those on culled product designs. The contract would net my organization $75M over a multi-year period; the largest transaction in our company history.

Since that transaction took place, I’ve grown to appreciate buyer chaos from a selling perspective. Here’s what I learned about buyer psychology in a crisis situation:

  • The door is open. It’s much easier to get on someone’s calendar if you connect your topic to their current crisis. Although it seems counter-intuitive, it’s also much easier to get sponsorship to the top when the house is on fire. People become desperate for solutions when the world is falling apart around them.
  • Don’t sell what you have, sell what they need. Situational crisis creates other problems. Spend some effort to understand the new problems arising as a result of the crisis, this may enable you to sell products or services you normally overlook.
  • Creativity is welcome. There were tax and write off implications for Unisys which resulted in the buy out of the organization for $1. They couldn’t write off the monetary loss of the good will of several hundred employees without a tangible exchange, but they didn’t want price to slow down the process with a protracted negotiation.
  • Politics take a back seat. In normal buying situations, politics can muddy the waters considerably, creating delays and slowing adoption of new solutions. In crisis, the usual political instigators tend to want to get into any feasible lifeboat. 

Next time you’re prospecting, consider placing the companies in chaos at the top of your list.

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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Challenge Buyers With A Provocative Question

When I first began my sales effectiveness consulting career, I made a list of 20 people as my starting prospect list.  They were all people I had established credibility with while working as colleagues.

Jeff was very high on my list. He was previously a general manager for a product division at my former employer. He was now CEO of a successful, high growth company. Better still, his current administrator, Pam, used to be my administrator at one point in time.

I prematurely concluded it should be easy to get on Jeff’s calendar.

When I called Pam, she was exuberant while catching up. But when I asked to get on Jeff’s calendar, her answer surprised me. She said the earliest she could put me on his calendar was four months away. My brain was racing. I know Jeff had to be busy, but four months? So I asked Pam, “why the long wait?” Her reply, “we have an IPO pending, and Jeff’s instructions were to push any meeting requests off that were not directly tied to the IPO”. I acknowledged the need to prioritize, and accepted the meeting four months away.

Then I pulled up my favorite search engine.

I was looking for any analysis on the IPO, and I hit the jackpot right away. Not as an investment, mind you, but as fodder for a provocative question. The first analysis I read by a major investment firm summed up the situation. It said that while this particular company had successfully penetrated a lucrative market, it had failed to penetrate other market segments.  Their perspective highlighted a significant risk for a major downturn in the value of the stock within 12 months should this problem not be fixed. Given their notoriety and stature in the investment market, it was likely that Jeff knew about their analysis.

Besides Pam, Jeff had also recruited Joe from our former company. Joe was a senior HR executive, who was not known for turning down a free lunch. So I got on Joe’s calendar for lunch later in the week.

My plan was risky, but it paid off. Even though Jeff was busy, I figured he had to eat lunch. The size of their company didn’t warrant a cafeteria, so I was hoping that Jeff would have to depart through their lobby to get to his car for a bite to eat. I showed up for my 12:15 lunch appointment with Joe at 11:45 to camp out in the lobby. Lucky for me, Jeff’s Jaguar was parked in the front of the building.

Sure enough, at just about noon, Jeff came striding into the lobby on his way out of the building. From my perch on a couch, I waved and said, “hi” to Jeff. He smiled and greeted me warmly, but did not break his stride. I asked him if he had a minute to talk. Amusingly, he said, “no, but call Pam and get on my calendar, we should catch up.”

That’s when I got provocative.

I nodded my head at his suggestion to call Pam and added, “ok, but can I ask just one question?” Jeff lifted his chin with a nonverbal gesture to proceed, but continued his gait. I pulled the trigger with, “so what’s going to happen to your IPO stock price if you can’t break into other market segments?”

I could hear Jeff’s foot plant. He stopped, turned to me with a quizzical look on his face and asked, “Is that something you can help us with?” I said, “yes”. Jeff sat down on the couch with me for a 10 minute conversation about how I could help his sales team break into other market segments.

As you have undoubtedly heard by now, the Internet gives your prospects’ the advantage in shopping for solutions without your involvement. As a result, sales professionals have to challenge the buyer’s vision of the problem set to expand their perspective and re-engineer the vision to the seller’s advantage. However, I would also add that getting their attention is the first part of the vision re-engineering obstacle.

The next time you have a prospect that won’t engage, try this three step process:

  1. Use the Internet to your advantage. Try to uncover a looming issue that’s likely to have visibility at multiple levels. Perhaps it’s a product that’s late to market, or a cost to revenue ratio that’s much higher than the competition. Something that has a potential fallout. (See my article about finding Business Issues for more ideas.)
  2. Develop your provocative question in advance. Start with “what happens if…” and fill in the rest with the unresolved issue. Try it out on a friend first. See if it causes them to want to engage, or to run. If it’s too provocative given your rapport with the intended recipient, you can tone it down. Conversely, if it’s too mild, you can always add more power to it with the words, “to you”. For example, adding to my question for Jeff: “what’s the impact to your IPO stock price, and to you, if you can’t break into other market segments?” The dagger hits closer to the heart, but requires a lot of existing rapport to pull it off without ruffling feathers. .
  3. Then apply. It might have to be over the phone, or email if you can’t get to them live. And you might have to preface it with the context of your past attempts to get their attention, and/or curiosity. For instance, “I know you said that you were too busy to talk, but something has piqued my curiosity…”

Your objective is not to get the answer. It’s to get their engagement in a conversation. Jeff never answered my question, nor did I need the answer.  But he did engage me in a conversation on the topic and subsequently introduced me to other stakeholders who needed help with the problem.

Finally, Joe popped up promptly at 12:15 in the lobby and we had a nice lunch.

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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The Confused Buyer Leads To Higher No Decision Outcomes

There were four people on the other side of a blind web meeting. As the call unfolded, I knew I had a confused buyer on my hands.

While I rarely run into a confused buyer, my clients experience it on a daily basis. The reason I don’t witness it often is that I typically engage the VP of Sales as my first contact. It’s rare to find one that is confused about what he or she is trying to achieve and the problems that are contributing to their challenge. On the other hand, most of my client companies sell to IT or some other technical organization where their first point of contact is usually at an implementer level and unaware of the business challenges or objectives for the organization.

I was put in contact with this task team charged with finding a sales methodology for their organization. When I asked them to describe the sales challenges they would like to overcome with this initiative, it was like one of the current presidential political debates. No one could answer the question directly, but they all had something to say.  Most commonly it was a complaint from their individual perspective about some other organization: marketing material is bad, internal approval process is horrendous, our customers are competing with us, and the like. When I tested for challenges like selling across the product line, facing new competition, getting to more powerful stakeholders and the like, there weren’t any takers. (And believe me, I did my homework on this organization!)

Not having clarity on the problem definition would seem bad enough, but then one of the team members dropped a bomb on my lap that my customers also run into every day. He asked if they could spend half a day with me to dig into the depths of our offering. On the surface, a request to engage in a deeper evaluation can sound like there’s genuine interest in a solution, but in reality, it’s the death spiral of the snake and prey about to begin.

Lacking a cohesive agreement on the problem definition, each stakeholder is likely to prefer a different solution based on their individual perspective, resulting in a chaotic buying process. Further, the invisible problem statement also makes it impossible to develop the value proposition to weigh against other uses for the money, leading to a drawn out process, or more likely, a no decision. When I brought the lack of a cohesive problem definition to their attention, one of the stakeholders recognized the implication and suggested a step to develop the problem definition.

My strategy is to encourage the development of the problem definition by including the ultimate decision maker and myself in the process. If they can’t or won’t, I will consciously limit my exposure to a potentially huge time sink.

For those of you selling to infrastructure or operations organizations, I suggest a checkpoint before you begin the evaluation process. Try to answer these two questions:

  • Can you clearly articulate the problem definition and would the buying team agree?
  • Would the decision maker agree?

If the answer is “no” to either of these questions, be cautious about engaging in an evaluation process unless you have time and money to burn. This unproductive buying behavior is rampant and is the biggest contributor to the common 40% to 60% no decision results most professional sales organizations tolerate.

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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Getting To Decision Makers Just Got More Difficult

The challenge of getting to more powerful stakeholders is getting more complex. In the past, a senior level executive would usually decide to take or not take a vendor meeting request based upon recommendations from his or her team. Now, according to a recent poll by DemandGen, 72% of executives said they also check LinkedIn profiles.

Your LinkedIn profile can now make or break your attempts to call higher or wider. Let me explain why.

Imagine trying to sell a car without cleaning it inside or out. What does the buyer see? A car that isn’t cared for, perhaps indicating that more important maintenance items like oil changes were neglected as well; ultimately reducing the perception of its true value.

The same thing applies to your LinkedIn profile.  Specifically, does your profile look like a resume for a sales person, or does it look like a customer-centric business focused adviser? Does it cause a reader to conclude that you are a potential valuable resource, or does it cause them to hide their wallet or plan how to beat you up for more discount?

A regular part of my role as an embedded sales coach is to help sellers individually learn how to gain access to more powerful stakeholders. This requires developing skills in a number of areas: gaining an understanding of the challenges in the target’s business, being able to articulate a value proposition in the customer’s terms, and building executive level credibility with lower level contacts by projecting the image of a credible business adviser, not just a technology seller. A well thought out LinkedIn profile can aid your cause.

Unfortunately, nine out of ten times, the LinkedIn profiles I review scream out, “I’m a salesperson looking for my next job!”

If you’d like to leverage the power of LinkedIn, here are three simple suggestions for tuning your profile so that it projects the image of a customer-centric business adviser:

  1. Ditch the title! The title is located just below your name. Unfortunately, most titles fit you into a neat little box that doesn’t help you sell more effectively. Instead, replace it with what you bring to the party for the target audience you want to reach. For instance, rather than “Senior Account Executive”, try something like, “Delivering Higher Profits to the XYZ Market”. Or, if you can target it even more, specify the buyer type: “Improving Revenue Results for Sales Leaders” as an example of something I might use.  (Your employment history can still retain your actual title, but most people will reach a conclusion about you within the first few sentences of your summary.)
  2. Tell a story. Use the summary to tell a story. Define the problems you help your target audience overcome. Take note that I didn’t say “solutions”. People resonate with problems much more than they do a techno-jargon filled solution description. For example, rather than saying, “I deliver security solutions.”, spell out the most common challenges or problems you help to overcome. In this example, a security solutions adviser might say:
    1. Eliminate DOS attacks before they happen.
    2. Prevent former employees from accessing sensitive information.
    3. Identify unsecured IOT entry points that now pose the biggest security risks according to recent research.

           Add a short example from a customer that also has credibility in your target market if possible. Include the business issues they were facing, the problems you uncovered and the resulting value they accrued. Use bullets and bold font to draw their attention to the words or descriptions that would most likely cause them to see themselves in your description. You want their unconscious mind to conclude, “wow, he/she really understands my situation”.

3. Provide links to valuable information that builds your credibility. You don’t have to be the author.  Demonstrating that you keep up on and share the latest research can project an image of credibility and value add. Look for white papers, research summaries, SlideShare presentations, and anything that adds to your image as a knowledgeable resource. If you can’t find any examples, then substitute quotes from other customers about your ability to deliver value.

For brevity, I’m stopping with a list of three things. These are easy edits that should only take you a few minutes, and they can have a huge impact on your ability to gain access to more important stakeholders. If you want to learn more, there’s lots of information posted on Pulse articles about using LinkedIn more effectively, or if you want to have it provided to you in a really engaging format, take a look at Social Selling by Donna McCurley.

Remember, you are in the best position to sculpt the image you want people to see and the conclusions you want them to reach about you. But you have to take action!

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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Funnel Building: Increasing Average Contract Value

In my last post, I reviewed the connection between building a larger sales funnel and the skill of disqualifying prospects that can’t buy. For this article, I’ll share some insight into another funnel building skill which helps those who may not have the luxury of having too many prospects.

Years ago, I worked for an organization that was mired in a sales productivity sand trap. For several years, the average productivity per rep was stuck at about $1.4 million in software sales. As a result, we were faced with a challenging dilemma: either add people to grow the company – a very expensive option, or learn how to grow our deal size. Due to our limited market size, we ruled out the strategy to sell to more customers since they didn’t exist, and we considered focusing on shortening sales cycle time, but ended up getting that with the deal size increase as an added bonus.

The strategy that emerged was to use professional services to grow our deal size. This intitiative taught us how to grow our average contract value with both software and services while shortening our sales cycle. The key was targeting new stakeholders in our existing opportunities. Specifically, we began a company wide effort to include the business stakeholders into our opportunities. Prior to this initiative, we limited our contacts mostly to the technical side of the house.

In my sales training and consulting business, I see this self-limiting behavior frequently. The actual end user or IT will engage in a dialog about a solution, and the seller concludes this is who they should spend their time on. Unfortunately, these contact types have limited budgets, limited political power, and are compelled to NOT rock the boat; consequently, smaller deals result. Conversely, business people are steeped in a culture of rocking the boat, looking for growth opportunities, typically monopolize power in many organizations, and have larger budgets. (Most companies allocate 1-2% of the budget on IT, while sales and marketing get upwards of 50%). The opportunity is to learn to tap this reservoir for your sales initiatives. If you do, you will see growth in your average contract value.

As a starting point, here are three skills I suggest you adopt:

1. Change your vocabulary.

The first skill set to master is learning how to speak to different cultures. If your technical contacts typically want to talk about bandwidth, analytics, quality, throughput, or any topic that has a technical flavor, you have to limit those adjectives to that audience. The business culture uses terms like revenue growth, new product introduction, customer acquisition, and differentiation, to name a few. Take some time to connect each of your technical capabilities to business problems and issues. Then use their vocabulary to get their attention, build credibility and gain access.

2. Understand that nurturing and expectation setting will be required.

Just yesterday, one of the sales people in a client company told me cold calling on the business side wasn’t working for him. I wasn’t surprised. The business stakeholders aren’t aware of his company or his solution, so they naturally avoid engaging as a standard calendar management tactic. I suggested he take a three step nurturing approach to the targeted business stakeholders. First, inform them you are working with others in their company on an initiative that will have an impact on business results they may be interested in. But don’t ask for anything yet! Just let them know that you thought they should be aware of the initiative. If it’s an important topic to them, they’ll do some investigating. I call this creating hallway buzz.

Your communication may sound something like this: “Hi Joan, I’m reaching out because I’m working with your IT organization (John Doe) on a solution for the <insert problem in their vocabulary> that is impacting your <revenue, cost management, or some other business issue> results. Based on your role, I thought you might be interested. Let me know if you have any questions about the project.”

It’s very common at this point to get your hand slapped by the technical contact. They’ll get an inquiry from the business stakeholder as a result of your communication, and in turn, demand that you limit your communication to them. They do this from either a place of insecurity, habit of control, or many other common personal agenda related reasons including avoiding visibility on a non-budgeted project.  This is where expectation setting becomes critical. You’ll need to become comfortable setting boundaries with your technical contacts. I suggest describing your modus operandi and rationalizing the action with your company’s learning experience; it might sound something like this, “I’m sorry this activity was upsetting to you. We’ve found the best successes include engaging the business stakeholders in the dialog, whereas the opportunities that end up in no decisions usually exclude them from the conversation. I thought it would make sense to start that dialog, don’t you?” Ideally, you can steer the conversation to a collaboration agreement on the topic and put the hand slap behind you. In any event, your goal is to continue to include the business stakeholders in the dialog and the best case is when your technical sponsor sees the light and agrees to collaborate on their inclusion.

If they aren’t convinced with the operating rationale, it doesn’t hurt to help them see how it will help them personally. As an extreme example: “Joe, if you want to become CIO someday, you’re going to need to get comfortable engaging the business stakeholders in your initiatives, perhaps we can use this opportunity as a chance to collaborate together to help you build this skill.” Or less extreme, “Joe, you mentioned your frustration with how small the budget was for this project, doesn’t it make sense to see if someone else might be willing to add some funds to your initiative?” (Research from CEB indicates that the best sponsors are the ones that mobilize other stakeholders into the conversation, so it’s in your best interest to coach your contacts if needed.) Of course, whatever rationalization and personal interest tactic you take will require your judgement based on the context of your discussions and your rapport.

If you navigate this first stage of the nurturing process (and technical contact control effort) successfully, you are ready for stage two. At some point, when you’ve gathered enough information about the relevant problems their organization is experiencing, how much it’s costing them, and how that relates to key business issues they are focused on, you (or your now collaborative technical sponsor) should reach out to the business contact again to confirm this is a value proposition that is accurate and worth pursuing. (Notice, you haven’t asked to meet the business stakeholder yet. You’re nurturing the relationship with value before asking for time.) If you’ve done a good job gathering the information and articulating it in their vocabulary, don’t be surprised if they ask for a conversation at this point.

Here’s an example, “Hi Joan, reaching out to follow up on the XYZ project. After a series of investigative reviews we’ve identified a value proposition that I’d like to verify from a business perspective. We’ve found that a database problem has resulted in about 14% of your customers abandoning their website purchase process prior to checkout due to frustration. As a $100M company, the simple math says this is about a $14M issue. Wondering if you see it the same way or think it’s not worth solving in light of other issues. Your perspective would be valuable to me in my allocation of resources.”

Even if they don’t respond with a suggestion to discuss at this point or point you to another contact they delegate with the responsibility, you have another nurturing opportunity. I recommend a follow up communication to see if they would be interested in understanding the business proposal you will be submitting. I also suggest that you (or your collaborative sponsor) offer to invite them to the formal meeting with the technical team, but offer to provide them with a 15 minute executive overview if they don’t have time for the one to two hour meeting with the rest of the evaluation committee.

Guess which one they usually prefer? In the event they elect to go to the technical meeting, they can be a great resource for keeping the business proposal focused on the outcomes instead of price. I suggest using their presence as the rationale for starting with the executive summary identified below.

I’m sure you can imagine there are other ways to deliver value and build credibility with information in your nurturing campaign. I’ve only highlighted a few, but the idea is to build your credibility without a major ask too early. However, at some point you may need it. If you’ve done a good job and navigated the pushback from the technical team, you should be in a position for a big “ask” if the circumstances aren’t in your favor. “Hi Joan, I’m reaching out to ask for some help on the XYZ project. I’ve run into a <budgeting shortfall, prioritization problem, or other IT roadblock> that I could use some coaching on. Can I get 10 minutes of your time to share the details and see if you have any ideas for eliminating the $14M problem we’ve identified with your online storefront?”

If you’ve navigated this successfully, you will likely find yourself with a more powerful ally in your quest to close your opportunity. Along with the more powerful ally comes wider discretion over fixed budgets, the insight to reprioritize for business reasons, and a more willing sponsor to take you to even more powerful stakeholders should the need arise.

3. Restructure Your Pricing Proposal to be a Business Proposal.

Remember the suggestion to invite the business stakeholder to the proposal presentation, or offer to summarize it for them individually? The key to success on this topic is to structure it like a business proposal, not a solution overview and price quote. The executive summary should include the key problems uncovered, the impact of solving or not solving the problems in terms of revenue, cost reduction, or other tangible return, and the relation to the current business issues of the senior management. The technical details should follow last. The executive summary should not be a summary of your company’s history and solution overview as a majority of technology proposals tend to exemplify. 

Your goal should be to develop a proposal that compels action – not negotiation.

Summary

The example situation I described at the beginning of this article grew average productivity of sales people from $1.4M to over $10M in a five year time span, largely due to targeting more powerful stakeholders.

Although none of these tactics are foolproof, with practice, and anticipating the hand slap response, you’ll find your access to more powerful stakeholders (obstacle removers) improving along with your average contract value and sales cycle. Asking for forgiveness in light of a well thought out rationale can relax many ruffled feathers. I would also suggest practicing on your new relationships versus your long term customer relationships. New relationships tend to allow more leeway than longer established relationships where behaviors have been cemented in tradition. Also, as many who have learned to integrate two culture selling into their practice have told me, it’s a lot more fun to sell to the business side of the house!

Please “like” this post or leave a comment! It helps to spread the word on best practices.

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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No Decisions Take Twice As Long As Wins!

Our firm recently completed an analysis of the pipeline statistics for a large software company. Like many of the companies we perform this service for, the most revealing statistic to them was the time it takes to reach a No Decision outcome. For those of you that might be new to the term, a No Decision is the result of a sales engagement where the buying team “decides” not to buy anything. Some refer to it as a decision not to decide. There have been lots of statistics published about the percentage of No Decisions in the average pipeline; it’s not uncommon to see No Decisions make up 40-60% of most enterprise selling pipelines. But the fact that they take twice as long to conclude was mind blowing to this sales team as well as others.

Early in my career a sales manager told me No Decisions rob you twice. First because you don’t get paid for the work you did, and second because you could have worked on another opportunity that you could have won. Since then, I’ve updated that perspective. You actually get robbed three times over since you could have worked on TWO other more probable opportunities in the same timeframe AND you didn’t get paid for the one you did work on!

So why do they take longer to conclude? I think there are two primary factors. First, the buying sponsor has some level of commitment to the solution, but lacks the ability or argument to mobilize and convince others – so they keep trying. But they keep their voices down to the mutual detriment of both parties. If you’ve ever heard a buyer say, “I’ll bring it up, but now is not the right time.” You were hearing the telltale sign of a No Decision in process. If the argument really is compelling, now is the time to bring it up! 

The second reason is the seller’s reticence to qualify engagements out of the pipeline. The continued engagement of the sponsor seems like a positive buying signal so they keep investing time and resources. However, they would be better served by frequently qualifying the engagement against some common indicators of a successful outcome, and taking the appropriate steps to back burner the opportunity if they don’t make the cut. These should include:

  • Has there been a clear identification of the problems to be solved?
  • Has the impact of taking or not taking action been clearly identified in terms of money?
  • Do the problems contribute to a business issue that currently has the attention of more senior management? (Versus a business issue we think they should be concerned about.)
  • Does the sponsor mobilize other more powerful stakeholders into the conversation?

Recently, a client of ours implemented this type of “qualify out” process and ended up closing 20% more transactions per rep AND witnessed a 19% increase in average contract value! The first metric was not a surprise. Spending less time on engagements that have no chance of closing should produce more success, but my curiosity was piqued when we found the average contract value improved as well.

My rationalization of the outcome centers on the influence of the qualifying questions. By doing a better job of articulating the problem statement, the impact of not taking action and the connection to current business issues, the opportunity gained more visibility and better sponsorship. As a result, the natural tendency to start with a small pilot trial was enhanced with a higher sense of urgency to resolve the problems and deliver a business impact resulting in a higher initial spends.

If your pipeline is suffering from a high percentage of No Decision outcomes or you’re looking for a way to improve revenue results in general, I’d suggest a qualify-out initiative. At a minimum, you should see an improvement in win rates, but don’t be surprised if your average contract value improves as well.

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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Sales Agility: Selling Around I.T.

Kansas_coal_miner

Y’all a bunch of coal miners in a gold mine!”

The words stung when they first rolled off of Hank’s tongue. I felt like it was an insult to our sales team, but rather than show my irritation, I asked Hank to clarify what he meant.

Hank was a new board member brought on to help our software company revitalize its lost growth luster. He smiled his approval at my curiosity, and explained. “Every day your sales team comes the work, it’s like they walk through a long dark tunnel to spend the day hacking away at the wall to generate a few hundred dollars’ worth of coal. On their way through the tunnel, they keep tripping over these large yellow rocks, so they kick them out of the way. What they don’t realize is those rocks are made of gold.” His Texas accent only made the analogy more powerful for me.

Hank was explaining that selling to IT was like coal mining. He continued by pointing out our own IT department had a budget equal to 1% of the company’s planned spending, while our sales department had 26% of the overall budget. His point was well made. We were working like dogs to scratch a living out of selling to IT. And they never had a kind word for us in return.

I spent the next nine months leading our sales team to be more agile in selling to the real stakeholders in their accounts. It didn’t happen overnight, but the results were mind blowing. Our largest deal size before Hank spoke up were in the $1M -$3M range. Within a few months we were booking $15m – $20M deals.

Although selling to General Managers and CEOs seems like a no brainer, we had to overcome years of ingrained habits to succeed. Here’s a short list of the challenges we faced in this particular situation:

  • Our messaging was tailored to I.T., not CEO’s.
  • I.T. did not have the mojo to sponsor us to the business side, nor did they want to.
  • Most of the business leaders who would benefit from our solution had no idea who we were.
  • Our sales people lacked the confidence to take on a new stakeholder conversation.

Sound familiar? Almost every technology company I’ve helped since then faced the same set of challenges.

Here’s how we overcame these challenges and became gold miners.

  1. We profiled the problems faced by the executives in our major target verticals. This means capturing their business issues, underlying problems, potential impact of changing in dollars, and the connection to our solution. We drilled this into our sales team, even requiring them to become certified in this type of dialog.
  2. We created new messaging that focused on the business issues, problems and impact that we could deliver to these new stakeholders with stories to illustrate real life examples.
  3. We went through an exercise to calculate how much value we contribute to the world on an annual basis. Without an exception, every sales rep came to the same conclusion. We delivered billions in cost savings and revenue acceleration, yet we were only billing about $200M at the time. We implemented this exercise to build the confidence within our sales people to carry their message to more powerful stakeholders.
  4. We challenged our sales people to take this message to three senior leaders in their accounts. We tracked and measured the initiative. Almost every sales person uncovered an opportunity that over shadowed previous projects. This alone fueled their appetite to prospect even more opportunities outside of IT, and created a workforce of gold miners.

In addition to the deal size growing tremendously, we had several other benefits emerge as well. Our discounting practice dropped by over 30%. Our breadth of products per transaction jumped dramatically, and our services bookings jumped from $2M the year prior to over $98M in less than nine months. This initiative revitalized our growth to the 30% range and took us to the billion dollar revenue mark in a few short years.

Although changing a culture to target business leaders outside of IT seems like a sales challenge, it’s really a leadership challenge. I’ve worked with many technology companies on this challenge, and the one common denominator for success with this level of agility is leadership.

Do your sales managers need to become sales leaders?

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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Sales Agility: "No Budget"

This is my favorite objection! Ever!

Ok, it’s not really an objection, it’s an invitation. So it’s my favorite buying invitation,ever!

Every seller has heard “lack of budget” as an excuse on multiple occasions. When I conduct AgileSelling workshops 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 does have 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 couple of days ago, I had a LinkedIn message exchange with a former colleague of mine, Steve Flannery. Our quick exchange reminded me of a time when Steve had overcome this challenge in spades. I recall reviewing his year in advance forecast with him during a Q1 Ops review. 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.

Steve ended up closing a $75M contract for services 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.