Why you should say no more often (if you are in B2B project sales)
One of the most important things I have learned throughout my many years in B2B project sales is to qualify my potential clients as early as possible. I’d rather say no too often than risk wasting precious time on cases that will not bring any business. You may say that this is a negative approach, but as time cannot be stored and used another day I have to make sure that I use it exactly where I believe it creates most value; for the client and for me.
As a sales person we must keep asking ourselves these two questions:
- Can I make this client massively better off with the products, services and insight that I offer?
- Can I win enough of this client’s business to justify the sales effort?
Building an attractive business case
The first question is the “easy” one. I must be convinced that what I have to offer makes a huge difference in an area that is critical to the client. To make this judgement I have to work closely with the client to gain the necessary insight to develop and document the business case for the project requiring my products, services and insight. The business case is owned by the client, but I must understand each element including all upsides and downsides.
Building the political relationships
The second question is the difficult one, because that depends on the client’s internal political environment and situation, the relationships I am able to build and on the substitution alternatives that the client will consider. Again I need insight and information from the customer to ensure that she will actually make a decision in favour of the project that I propose within a timeframe that we both agree on. If I cannot get these relationship established then I cannot get the insight needed to build a solid business case and I cannot know if my project comes in second to the other alternatives available.
We do not always lose to our competitions
We can lose to a competitor or to another investment opportunity that the customer has on the table, but mostly we lose to the “do nothing” option. In all three cases I will guarantee that a sober “lost case” analysis will reveal signs that we ignored. We continued to invest time and effort in the sales process overlooking the signs that the client was headed in another direction.
The opportunity cost of project sales
You would be surprised to learn that the vast majority of sales people spend most of their own time and also other valuable company resources on projects that they will lose. Time and resources spent on such projects cannot be spent on projects that we can win. The opportunity cost in sales is enormous. How do we change this balance making sure we spend most of our time on cases with high win probability?
It starts with careful segmentation…
Our products and services are more valuable to some potential clients than to other potential clients. That’s a fact that applies to all companies in all markets. Our ideal clients are those that get maximum value from our products, services and insight. Narrowing our business development, marketing and sales & focusing on our ideal clients is an excellent start. We have a much easier time building a strong business case when we operate in a market segment where we have experience and it also appears more convincing when we have a proven track record.
…supported by careful qualification
But not all ideal clients are receptive to our value suggestion. Finding out if they are receptive and prepared to go all the way is what we call “qualification.”
Sales people should see themselves as venture capitalists. Although investors have lots of money they don’t just carelessly throw it after the first people showing up with a PowerPoint presentation. They view hundreds of opportunities and have a process for selecting the few that get their money and attention (in return for shares and influence).
Any sales person has lots of potential clients (maybe not and then that’s the problem!), but she shouldn’t just carelessly throw her time and other company resources after the first potential client with a pulse. She must constantly ask herself the two questions listed above and if there are signs that the client is not responsive and doesn’t invest time and effort in driving the project forward, then it’s time to pull out and reallocate resources.
Signs for disqualification
So how do you spot if a potential client should be disqualified? I have listed the 10 most important indicators that should make you consider conserving our resources for more promising opportunities.
1. The Poor fit
The client is too far away from your ideal client profile. You know too little about her type of business and industry and even if the project is successful (low probability) it will not enhance the value of your brand. You only get the money. Move on.
2. Uncooperative attitude
You feel mistrust and unwillingness to cooperate right from the start. You are treated as a simple vendor and not as a potential business partner. Move on.
3. Cultural misfit
The client’s representatives display weird behaviour completely out of sync with what you consider professional. A company with such representatives is unpredictable. Move on.
4. No access to the key decision makers
You must get direct access to the people that share the benefits of the project, especially when the final decision is made by a committee. Talking to the people that can only say no and hoping they can do the internal sales job is too risky. Pull out.
5. Unwillingness to share information
You approach a new client with a value assumption. Developing the full value proposition and the business case requires active cooperation from the client. Unwillingness to cooperate and share the needed information is a red flag. Pull out.
6. Request for Proposal
You arrive on the scene when there is a Request for Proposal underway. You cannot get access to anyone and the RFP is clearly written with someone else’s solution in mind. You are too late. Move on.
7. The powerful incumbent
You are up against a strong competitor that holds the account in an iron grip. They may talk to you for all other reasons than wanting to do business with you. This situation is often combined with signs #1 and #2. The risk is too high. Move on.
8. No funds
The client is in deep trouble. They may have a desperate need for your project, but do they have the funds and can they complete the project? The risk is too high. Move on.
9. No testimonial policy
The client has a policy of not giving testimonials. That means that you cannot use a successful project for promotional purposes. This is a severe reduction of the value to you. You only get the money and not the promotional leverage. Move on.
10. The shipwreck
You are the candidate for rescuing a project that went wrong. All the blame is on the vendor that came before you. The budget is limited since they have already spent a major portion on what is now a useless shipwreck. Expecting you to pay for the client’s mistakes is unprofessional. Pull out if the client won’t allocate the full budget and all other lights are also green.
Keep a full pipeline
Sales people cling to hopeless projects because they have no backup candidates in their pipeline. The time they waste on hopeless sales projects cannot be invested in developing new and healthy opportunities. It’s a vicious circle. It is the job of the sales manager to help and coach the sales people. It is the sales manager’s job to make the final decision: “Folks, we are pulling out of this one.” However, the sales manager often does exactly the opposite and also clings to opportunities with a very low probability of success.
Companies in the B2B domain with high price tag solutions should have a formal project review process in place with fixed criteria for ongoing reviews of when to continue to invest and when to pull out of sales projects.
Originally published at tbkconsult.com on April 27, 2016.