Tag Archives: value selling

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How To Close Every Year End Deal

It’s that time of year again. If your sales team is shifting into gear to close out the year, this article may help you optimize your outcome.

I’ll introduce two very valuable tools for managing the closing process more effectively, the Mutual Activity Plan and the Close Plan.

The Mutual Activity Plan (MAP) is a document developed with the prospect to identify the activities required to reach a decision. These activities might include meetings with other stakeholders, conducting evaluations, talking with references, proposal reviews and more. It’s organized with due dates and action owners as if it’s a project plan – because it is a project plan. Further, it’s a “map” to a destination point; placing the order.

The value of the MAP is getting the buying sponsor on board with you with a timeline. Moreover, if they fail to meet an action item, they have broken an agreement of sorts, providing you with the platform to ask, “why?”, or better, ask for something in return. If they fail to meet a commitment, I suggest asking for something in return that will help improve your chances of closing on time, such as meeting with the final decision maker, or reviewing the prospect’s internal justification document to add suggestions for example.

Here’s a simple example of a MAP:

Activity                                                                           Owner                  Due Date

Discovery meeting with all stakeholders         Smith                    11-25-15

Demo for entire team                                                Smith/Jones        12-1-15

Review with Legal                             Smith/Jones        12-7-15

Engage Purchasing                            Smith/Jones        12-14-15

Place order                                                                    Jones                   12-20-15

Given the complexity of your sale, the MAP may be short and to the point, or it may be several pages long. The longer it is, the more important it is to establish it as a tool to manage the process to a predictable outcome.

Recently, one of the sales leaders in a client site of mine reviewed the previous quarter closing results for one of his struggling sales people and found that every opportunity that closed had a MAP, whereas, the opportunities that slipped into the next quarter did not have a MAP in place. The lesson for the sales rep: it’s difficult for the prospect to meet expectations if they don’t know what they are.

The Close Plan is the MAP plus the internal activities the customer should not see, or should not be bothered with, but need to be managed to closure. These might include examples such as a credit check on the customer, approvals for special options, new product capabilities that are required, discount approval and more.

I typically see more complex close plans required for professional services or other applications where there are multiple contingencies to address, several internal approvals required, and heavily customized solutions. However, sometimes they are more complex because of the nature of the selling company’s culture or bureaucracy. Regardless, the more internal obstacles you have in the way of closing an opportunity, the more important it is to have a close plan in place to keep every required activity front and center.

Finally, having a plan in writing is good, but it also needs to be managed to success. Use the MAP or Close Plan as a review tool to help the sales person make progress on their plan. Check off items as they are achieved and identify activities with high risk to brainstorm on alternatives and contingencies.

I feel compelled to wish you luck closing out your quarter, but we both know that it comes down to great leadership and disciplined sales professionals.

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Control The Buying Process: Gives and Gets

As we roll into the holiday season, its time to think about giving… and getting.

Research by CEB indicates top performing sales people exert more control over the buying process than their colleagues. In this article I’ll share two powerful tools for exerting more control over the buying process which can result in higher win rates and shorter sales cycles.

One of the key premises for control is a healthy balance of give and get. If your buyer values you and/or your solution, they should be demonstrating this by collaborating with you when the process hits a snag. If the balance is heavily lopsided in their favor, you are most likely not their first choice.

Gives and Gets

The discipline to routinely ask for something in return is a powerful control tool when it comes to improving sales results. Consider some of the common requests potential buyers make of you:

  • Can we arrange a demo?
  • Can we install your solution on site for 30 days to evaluate it?
  • Can you provide budgetary pricing?
  • Can we see your five year roadmap?
  • Can we talk to your subject matter experts?
  • Can we talk to a reference?
  • … and more!

Each of these requests presents an opportunity to ask for something in return. I recommend asking for information or activities that will shorten the time to decision. Some examples:

  • Access to other stakeholders, especially those with the power to say yes to a decision.
  • Insight into key metrics that could shed light on the value proposition for making a change.
  • Insight into key competitors and their differentiators that might be important to address.
  • Collaboration on the internal justification document.
  • Confirmation of the current business issues demanding attention in the buyer’s C suite. (This gives you the opportunity to tie your solution to a strategic initiative.)

Keep track of the Gives and Gets outcomes to provide you with a view of the health of your relationship with your buyer. Wins usually have a balanced Give/Get ratio, losses and no decision outcomes are usually biased toward the buyer’s demands with little representation of the seller’s requests. A one sided relationship usually indicates that you are not the first choice, and you are probably being used as column fodder against another preference.

A Series of Formal Agreements

As you navigate your way through the buying/selling process, take notice of the number of informal agreements you establish along the way. For example, which stakeholders you can access, how long the evaluation will take, the decision criteria, when a decision will be made, and so forth. Each of these agreements presents an opportunity to exercise more control by formalizing the agreement in writing. I’ve seen top performers build a list of agreements into something I call the mutual action plan, however, it doesn’t have to be a signed document; it can be a simple email recap with a request to acknowledge the agreement.

The act of formalizing the agreement is valuable in itself for exerting control; however, the most powerful use of the concept comes about when your buyer breaks an agreement. This is when you have the right to ask for something in return! Think of this as a level two Give and Get.

For example, let’s assume you have documented the terms of an evaluation. But now the buyer comes to you and says, “I know we asked for 30 days to evaluate your solution, but we ran into some other distractions that got in our way. Can we extend the evaluation another 30 days to make sure we have ample time to conduct a proper evaluation?“

If you have established a more formal agreement, you should be entitled to ask for something in return. Once again, ask for something that will help you shorten your sales cycle, like access to other important stakeholders, or validation of metrics that can support the need for change.

Conversely, if you failed to document the agreement, you have less ground to stand on to ask for something in return. It doesn’t mean you can’t ask, and it doesn’t mean they won’t grant a return request, but the odds go up for granting your requests when a more formal agreement is in place.

Summary

To shorten sales cycles, reduce the number of no decisions, and set expectations for the dynamics of your relationship, consider using Gives and Gets as well as Formal Agreements to exert more control. Lastly, tracking the positive acceptance or negative denials for Give/Get requests may provide you with advance insight about the outcome of the process.

If you want to change your discipline in this area, consider mounting a poster above your computer to remind you to look for Give/Get opportunities and Formalize AgreementsHere’s an example you can modify to fit your needs.

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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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Bad Sales Presentation vs Great Sales Presentation

It was an unusual trip to Japan. I began the trip from San Francisco with a valid passport, only to find when I landed that it had expired as I crossed the international date line – even after two airline employees checked it! As a result, I had the privilege to spend the next four tedious hours with an immigration official. After a collaboration with an airline representative, I was eventually allowed to continue my business trip as long as my first stop was to the US Embassy for a new passport.

I didn’t get to my hotel bed until 2:00 am.

The next morning I was standing bleary eyed in front of the head of all electronic development for Toshiba Semiconductor. I pulled out my binder of about two hundred overhead transparencies (yes, it was a long time ago), and his eyes grew three or four times their size. “You’re not going to go through all of those slides, are you?” he asked while glancing at his watch. 

I smiled and let out a small chuckle. “No”, I replied, “That’s the marketing material. I only have four slides for you.”

He visibly relaxed a little, sat back in his chair, and said in perfect English, “This I have to see.” turning his head slightly up and away in apparent disbelief.

After I spent about 20 minutes on my four slides, he spent the following hour peppering me with questions, which prompted me to pull out ten to fifteen additional slides from the marketing deck. At the end of our meeting he declared that I was a presentation samurai, and demanded that we have dinner that night. That’s when I was introduced to a custom where the person on your right keeps your drink filled to the top for the entire dinner. Lucky for me, my flight wasn’t until four pm the next day.

After consulting with over 80 technology companies, I find the pattern is pretty standard. The typical marketing deck for sales has a predictable pattern (with minor variations):

  • We, We! (All over ourselves) This section talks about the history of the vendor’s company, their size, their locations, their market dominance or enviable spot on a Gartner Quadrant, and usually includes a customer logo slide for good measure. It’s all about the vendor. (I realize this is for credibility building, but its premature. The customer doesn’t care who you are until they conclude that you might be able to help them.)
  • More We’ing. Now they move into their product(s) overview. Lots of acronyms, complex slides, and pseudo framework pictographs intended to make it look like their products all work together. (Unfortunately, the problem is rarely defined, so the customer either can’t figure out if they need your solution or how you are different from the last vendor with a similar set of complex solution slides.)
  • Case Studies and Testimonials. Ranging from name dropping to detailed technical case studies, they are usually missing some variation of the most important details like the customer problem set, the impact on their business, and the result. 

In contrast, here’s what I did for my new found friend at Toshiba:

  • The Situation. I described a change in the macro situation that should interest them. In this case, there was a dramatic industry wide shift in the size of silicon inter-connects (the actual connection between devices on a silicon chip), going from microns down to nanometers. (A 1000 to one ratio) 
  • The Problem. Next I explored the problems the situation created for design teams like Toshiba. Everything they knew about circuit design and troubleshooting had just been disrupted. The inter-connects would now act like someone peppered millions of new devices into their design, causing fluctuations in performance outside of specification, leading to head scratching, trial and error problem solving on a massive scale across a chip that could have millions of inter-connects.
  • The Impact. Plain and simple, I talked about the competitive disadvantages if they didn’t make the shift, followed by how the new situation would impact design schedules, time to market, feature trade offs, and other relevant business issues. 
  • The Success of Others Just Like Them. This is where I share a story or two about other companies that Toshiba could relate to, and how we helped them overcome the same challenges. (Yes, this is the case study or reference story, but it comes after the situation, problem, and impact development, and reiterates the situation/problem/impact framework for the case study company.)

In my first twenty minutes with Toshiba, I didn’t talk about our company or our products. I talked about the problems Toshiba will be experiencing and how they would impact their business results.

The following hour I did answer questions about our products, how they worked together, how many support people we had in Japan, and lots of other details that were already available in the standard marketing deck. But in this case, the audience was primed to want the information.

I suggest you conduct a quick inspection. Pull out the most recent deck you’ve used in a customer presentation, or if you’re a sales leader, ask one of your sales people for one. Most important on the list for retooling, check to see if the situation/problem was defined by slide three or four (at the most). If not, simply add a situation/problem definition slide followed by an impact slide and you will have upped the horsepower on the compelling aspect of your presentation by 100%.

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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There Are Two Types Of Prospects…

Mary runs a sales development team for a technology company based in San Francisco. She was previously employed by another customer of mine, so we had some positive working history. Her boss was breathing down her neck and demanding results. She asked me to listen in to phone calls her reps were making to identify the problem.

After listening to multiple calls by various reps, I codified their process into the following:

  • Hi, my name is <Name>
  • I work for <Company Name>
  • We are the leader in <Solution Definition>
  • I’m calling you today because <Ask>

I pulled her team together, wrote this list on the board, but made two changes. The first was that I put all of my information in the brackets, such as, “Hi, my name is Kevin Temple, I work for ESG,” and so forth. The second change I made was I added another step, “I help SDR’s who are frustrated by low hit rates, phone hang ups, and escalating pressure to improve results”.

Then I asked them one by one to vote for the one topic that would cause them to want to talk with me. Unfortunately for my ego, it wasn’t my name, my company name, or my consulting practice description; but I knew that before I asked the question.

Without exception, they all selected the added line, “I help SDR’s who are frustrated by low hit rates, phone hang ups, and escalating pressure to improve results”. When the realization sank in, I saw the heads slowly rise and fall with understanding. Then I asked them to apply the same thing to their prospecting.

Before you run full blast forward with this notion, I should explain there are two types of prospects;those that don’t know they have a problem that can or should be solved, and those that know they have a problem and are looking for a solution. In either case, the problem set is the key to getting their attention.

In the first category, the prospect is more likely to resonate if they are approached with a problem they would recognize. It turns out this is much easier than it may sound. I’ve found there’s a variation of Pareto’s law at play here; about 80% of prospects for any specific solution have a predictable overlapping problem set. It’s even stronger for prospects within the same market vertical. For example, one insurance company probably has a very similar problem set as the next insurance company. Its simply a matter of identifying the problem set.

My approach to the problem identification task is to make a list of the best capabilities of the solution/product/service, and then identify the problem that each capability solves. For instance, let’s say you sell services, or services that augment your technology solution. Most service capabilities include installation, customization, and training. There are typically three problems that connect to these service capabilities:

  1. Lacking enough resources to get the job done.
  2. The current resources lack the skill or knowledge to get the job done.
  3. The current resources would provide more value by working on core activities, not secondary activities like installation or roll out.

The objective is to use these problems as the interest generating topic. It may take a little trial and error to find the top three for your list, but in short order you can have a very succinct list of attention getting problems to use in your outbound prospecting activities.

As you recall, the second set of prospects are those that know they have a problem and are probably seeking a solution. These people tend to be the ones that have visited your website, downloaded a whitepaper, attended a webinar, read certain periodicals, and the like. They are actively identifying themselves as prospects. In essence, they’re saying “I know I have a problem, now I’m trying to find out who solves it better then anyone else.”

In this case, our objective is to use the problem set to either make our differentiators stand out, or expand the problem set to tee up our differentiators in other areas of our solution. In this second case, the process is the same. Make a list of your differentiated capabilities in all major solutions, then identify the problem each one addresses. The seller uses the problems that link to clear differentiators in the core solution, or differentiators that link to secondary solutions to expand the criteria. For example, one of my current customers’ provides solutions for identifying the origin for open source software code that ends up in a software product. Their attention getting problem probe might sound like this:

Almost all software developed today has open source software aggregated from outside sources. While many development teams understand there are legal licensing implications (core solution problem target) that can result in huge financial liabilities, many are not aware of the number of security vulnerabilities (expanded problem set to differentiate against lesser solutions) that are being introduced by this process.

When Mary’s group edited their voice scripts to leverage the most common problem set they address, their hit rate for conversations tripled, and their pipeline almost doubled within 30 days.

What are your salespeople using to get attention?

And do they identify which prospect type they are engaging?

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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.