Anaplan Logo

New Webinar

The AI Science of Selling: How Smarter Segmentation Accelerates Revenue Growth

 

Tuesday, June 24th at 2:30pm ET.

 

When a Sale Goes South

By BETSY WIESENDANGER

There could be a thousand reasons customers give for not signing the deal. You’ve probably heard at least 50 of them yourself. They range from a painfully simple, “We decided against it,” to the more convoluted, “Well, if it was just up to me, I’d go ahead, but my boss is set on your competitor’s line.” Ouch. Here are three more.

r

1. “We’ve decided to go through different channels.” (But they won’t say what those channels are.)

r

2. “We need to take more time to consider this.” (But they won’t say how much time they need.)

r

And then there’s number three – a classic: “We no longer have the budget.”

r

That’s the one that really makes Evan Solomon sputter. “They said they had it when we were working on the deal,” says Solomon, an account executive with the Bernard Hodes Group, a New York communications firm that helps HR departments with recruitment and retention. “So what happened to it? Did they go out drinking last night and spend it all?”

r

Well, hardly. But Solomon’s frustration is understandable – and universal. Finding out why a deal went sour is about as easy as predicting which way the Dow will go next. You could ask the prospect, of course, but buyers often have reasons for being less than forthcoming. They may have brought you in at the last minute to make it look like an open bid, for example, or to light a fire under the incumbent. Or they may simply not want to hurt your feelings. Think back to your teenage dating years: When the class nerd asked you out, you didn’t point out his or her faults in excruciating detail. Instead, you claimed to be hopelessly busy and chimed in, “But thanks for asking!”

r

Clients can be equally evasive: “We were more comfortable with them.” Or “We felt their organization could mesh with ours,” they’ll say. Often, buyers string salespeople along simply to preserve their own ego. Mark R. Leary, a professor of psychology at Wake Forest University in Winston-Salem, NC, has studied interpersonal relations for 20 years. He posits that prospects are less than truthful because they’re caught in what he calls a “self-presentational predicament.”

r

“Most of us want to give the impression that we consider things, that we don’t make knee-jerk decisions,” he explains. As a result, prospects keep a salesperson dangling to make it seem they’re giving the proposal due consideration.

r

So where does this leave the spurned salesperson? It’s tempting to chalk it all up to experience and move on. In fact, that’s what many motivational gurus recommend. But doing a little detective work to figure out what went wrong can help you change the outcome the next time around. Here’s how to get the goods on why a deal goes sour.

r

1. Make sure the deal is really dead.

r

Amy Kessler has a system for rating a deal’s viability: 50 percent if the prospect meets her criteria, 75 percent if she’s gotten verbal agreement, and 90 percent if the paperwork is in process.

r

Unless the product has been delivered or work on the project has begun – the criteria for a 100 percent rating – there’s a chance that the decision can be changed, says Kessler, a regional vice president for timeBLASTER in Boston, maker of medical research software. Even at 90 percent, there’s still time to mount a last-ditch effort: a discount in exchange for another meeting with top decision makers or a memo outlining product improvements since the bid was submitted.

r

For deals stalled at 50 percent, consider taking the patient off life-support. Merit Gest, a principal with Total Selling Solutions in Northbrook, IL, recommends using wording such as “Should I close the file?” to get the client to cut bait. Reassure the prospect that your feelings won’t be hurt and that you understand you’re not a perfect fit for everyone. If the prospect demurs – “No, no, we’re definitely interested”– get a commitment for when he or she will be ready to move forward.

r

2. Go back over the chain of events.

r

Few people enjoy shining a spotlight on their flaws, but salespeople especially hate it. “You’re talking about people with big egos, who oftentimes make a very good living at what they do,” says consultant Matt Oechsli of The Oechsli Institute in Greensboro, NC. “Part of that ego strength comes from being able to flush failure quickly.” Self-analysis isn’t encouraged at the organizational level, either. A survey of 80 sales and marketing executives done by Cerado, a Half Moon Bay, CA, sales information provider, found that only 46 percent capture win-loss information at least once a quarter.

r

Granted, it’s tough to look dispassionately at your own performance. “You’re facing a situation where you feel like a failure,” says Linda Richardson, president and CEO of Richardson in Philadelphia, which provides sales training and e-learning. “But you really can salvage critical information that will help you win deals in the future.” Start by sitting with your call-tracking forms and go over each step: Did I identify the right influencers? Did I get agreement about what the next steps should be? Did I uncover the true client need? How did I position my offering against my competitor’s?

r

Then look for the weak spots. That’s what Suzanne Beecher did when she analyzed a recent sales call at a major bank. As CEO and founder of Chapter-a-Day in Sarasota, FL, Beecher runs an Internet service that delivers daily book excerpts to members’ email boxes. The service is free to individuals, but corporations and libraries pay a fee to offer it to employees or cardholders. Beecher opened the meeting by tracing the history of the company: her love of reading, how she first made inroads into libraries. “They picked up on the word ‘libraries’ and said, ‘that doesn’t have anything to do with us.’” she recalls. The lesson learned: “When someone says, ‘What do you do, Suzanne?’ I should present only the slice of my company that pertains to them,” she notes.

r

A backward glance also helped Brad Stanek, a vice president with the private client group at Merrill Lynch in Chicago, gain new perspective. One of his prospects, a woman with roughly $650,000 in assets, promised that if she liked his ideas she would bring in her husband for a meeting. Instead, when Stanek presented his proposal, she said she’d have her current financial advisor look it over. Says Stanek, “I could have said, ‘Remember when we talked about this? There must have been something I’ve done to discomfit you, because we agreed that a meeting with your husband would be the next step.’” Next time, he vows, he’ll be firmer about holding clients to their promises.

r

3. Get input from team members.

r

One of the fundamentals of criminal science is corroboration. A lost sale is hardly a crime, of course, but the principal holds true. No matter how keen your powers of observation, a second opinion – and possibly a third and a fourth – is critical.

r

As soon as possible after a prospect says no, schedule a debriefing with everyone who participated in the pitch. Or make postmortems part of your regular sales meetings. That’s what Brian Murphy, vice president of sales of software maker Pindar Systems in Boston, does. “The sales guys are already feeling bad,” he says. “You want to make these things seem as routine as possible.” Frame the discussion in terms of “what happened” rather than “who messed up,” and be willing to entertain the possibility your product or service simply wasn’t a good fit.

r

Also consider whether the problem lies in your sales process. In one debrief Murphy presided over, much discussion centered around a detailed needs analysis that Pindar presents to every serious prospect. One rep mentioned that a client phoned three times to confirm it was free. Other reps chimed in that they, too, were having problems positioning the analysis and felt it raised more questions than it answered. That prompted Murphy to make a change: Pindar still offers the report but presents it later in the selling cycle – for a fee.

r

4. Query the client.

r

Joan L. Eisenstodt is the kind of buyer many salespeople fear: savvy, outspoken, and an expert in her field. The head of Eisenstodt Associates, a Washington, DC, firm that does conference consulting, facilitation and training, she buys anywhere from $50 to $75 million in hotel rooms, catering, airfare and other services annually. Recently, while scouting out meeting sites for a group that deals with disability issues, she toured a luxury hotel in Atlanta. The salesperson led her through the plushy carpeted halls, showed her the fitness center, and gushed about the tony perks such as turn-down service. Never once did the salesperson mention wheelchair accessibility or other accommodations.

r

The hotel didn’t get the business, and when the salesperson called to inquire why, Eistenstodt leveled with her. “Your staff isn’t trained, and you aren’t trained, to deal with disability issues,” she said.

r

Ask and you shall receive – sometimes more than you bargained for. Pulling feedback out of a client requires a delicate touch. Probe too deeply and you risk seeming argumentative. Take the client’s bland admonishments at face value, however, and you won’t know where or how to improve.

r

The key is to couch it all in neutral wording. Rather than asking, “Why didn’t we get the contract?” try something like this: “Thank you for considering us. Your project sounds very exciting, and I’m sure that, going forward, it will be successful. I’m wondering if you can take a moment to help me understand what we missed.” Among the questions to ask: Who won the bid? What did you see as their strengths? Was our proposal complete? What were the needs that our solution didn’t address? Did you feel we had the depth of capability to handle the project?

r

Don’t argue with what you hear. If the buyer says, “We didn’t feel you had enough international experience,” don’t jump in and point out that you have offices in London and Tokyo. Better to say, “I see. Next time we’ll do a better job of communicating our global reach,” and leave it at that.

r

Sometimes, though, it’s not the product or the process – it’s the salesperson who’s the problem. If that’s the case, the manager, not the rep, should make the call to the customer. No matter who makes the call, close by saying you’d love to work with the prospect again. Consider asking for referrals to other divisions or subsidiaries of the company. Then, put the company back on your prospect list and continue to keep touch.

r

5. Bring in the experts.

r

For larger deals, you may want to bring in a third party to question the client. Many sales consultants and training firms offer such a service, often starting at a few hundred dollars for two to four interviews.

r

Using third parties has several advantages: They know how to drill down for details, and prospects may be more candid with someone who didn’t have a stake in the deal, says Dave Stein of The Stein Advantage in Mahopac, NY. Third-party firms can also analyze several lost deals and look for patterns. An unbiased eye may be able to pick up the fact that a sales force needs to shorten its presentations or offer better warranties.

r

If you decide to go the third-party route, do it as soon as possible after the deal goes dead. “The ideal time is 15 to 25 days after,” says Howard Stevens, CEO of H.R. Chally in Dayton, OH. “At that point, the buyer knows you spent a big bunch of money putting the proposal together. They feel some responsibility to the people who lost.”

r

A final word about postmortems: Keep them in perspective. “If you edit yourself too much, you lose your compass,” says Matt Oeschsli. Take the feedback, apply what makes sense, and move on to win the next one.