Make The Big Sale By Managing Your Customer’s Career Risk
Inovia Growth Hacking Tip #778
“TLDR: To close large sales with corporate customers, manage the career risk of everyone in the purchase chain. Doing so will get your sale closed, whereas ignoring career risk will get you months or years of frustration and delay.”
Whether you are selling to consumers or selling to large enterprise customers, the purchase decision is ultimately made by a human being. And in both cases, the decision is made based on whether it “feels right” to that person or not. However, when the purchase is made on behalf of a business, one of the most overlooked factors in closing a sale is the decision-maker’s career. To successfully close a corporate customer, especially a large one whose purchase can really move the needle on your startup company’s revenue meter, you need to understand how the purchaser’s career affects the decision to buy. Without understanding this, an entrepreneur — even with a wonderful product — will often be frustrated by how long it takes to get the sale closed, and will suffer long sales cycles with poor lead-to-close ratios.
To figure out this career thing, put yourself in your purchaser’s position. Sure, purchasers look for great solutions to valuable problems — if that were not true, they wouldn’t be talking to you at all. But remember, the decision to spend company money, and probably also to allocate some headcount to implementing your solutions once purchased, will be evaluated, both now and in the future. The immediate evaluation will be done by a manager, along with others involved in the purchase decision, especially those involved with budget allocation. Many entrepreneurs recognize this, and understand that the people who will benefit from buying the solution, in effect, become internal champions for the solution at each company. And indeed, many such champions are not very good at being salespeople, and need to be significantly helped-along by the entrepreneur. If you neglect this, the sale will be lost due to being shot down by some person who simply doesn’t see the benefit of the purchase. In other words, our jobs as entrepreneurs extend beyond selling to our champion, going all the way up the chain of purchase-related decisions within the champion’s organization. This is why it remains extremely important to map out that purchase chain (the topic of another growth hack currently being written).
But beyond the immediate evaluation of each purchase champion’s decision, those decisions will be evaluated many more times in the future. Our champions will be asked “That money, time, and effort you put toward that solution, how well did it work out? Did the company benefit? Did it put us at risk? Were there losses within the company to offset the wins you promised us?” These questions will be asked at various points in the future too. Perhaps at the end of the quarter, when bonuses are being calculated. Perhaps also at the end of the year. Perhaps when internal processes are periodically reviewed. Perhaps when there is a large problem within the company, and places to allocate blame are being sought. Perhaps when promotions are being considered. It is worth noting that all of these reviews have the potential to impact — positively or negatively — the careers of our purchasers, and therefore they will be very much aware of them unless they are very new to the corporate world.
In a nutshell, we can expect our purchasers to evaluate our products or service offerings based not only on the effects it might have on their companies, but also on the effects they might have on their careers, based upon all those present and future evaluations that will occur, and that will include scrutiny of each of these purchase decisions. And of course, where there is a complex purchase chain involving many people, each of them will worry about each purchase decision’s impact on their own career too!
So, recognizing this, how does an entrepreneur go about managing each sales process, so as to address not only the technical and financial benefits to each purchaser’s company, but also the career benefits to everyone in the purchase chain, while simultaneously playing down the career risks associated with the purchase? There are many appeals that can be made, and here are some of them.
- Recognize that if you don’t address the career risks and benefits, you and your purchaser will simply be speaking different languages to each other, and your sale will likely go nowhere. Career risk is not just another factor in the purchase decision, it turns out to be the major factor.
- Map out and understand the entire purchase chain, evaluating the career implications for each person in the chain, and addressing them.
- Remember that advancement and promotion come more often from “not screwing up” than from truly performing extraordinarily. Therefore, mitigation of downside risk is likely much more important to your purchaser than creation of upside potential. The purchaser may receive a promotion for saving money, but will much more surely be passed over for promotion if there’s a large screw-up associated with his or her name. When it comes to corporate ladder-climbing, the name of the game is “avoid owning losses.” Put another way, the company might benefit from the purchase, but the purchaser takes on the risk of failure, and that risk will remain attached, perhaps for years to come. Purchasers cannot ignore it, so nor can you.
- Understand that the purpose of external validation documents such as case studies and research reports is not only to provide confidence to your customer, but also to provide a path for blame-shedding in case things go awry. Imagining some future management review: “Well, Gartner said it was wonderful, which was why I thought it was worth giving it a try. True, it didn’t work out, but Gartner loved it, so anyone would have made the same decision I did”, rather than “Yup, I was alone in thinking the solution was wonderful, so the blame for its failure lies solely with me.”
- Consider that each purchaser’s risk can come in many forms, not just “what if the solution doesn’t work out.” They will also be concerned with such issues as:
- What if you go out of business?
- What if you are acquired and the customer service goes to hell?
- What if you are acquired and the pricing structure changes?
- What if you are acquired, but then the product is shut down?
- What if you are acquired, but then new feature addition slows to a crawl?
- What if you are acquired by a competitor of yours, who merges your product with theirs, making it worse than before?
- What if you are acquired by a competitor of theirs, who then has a lever to use against them?
- What if you simply focus on “bigger fish” than him or her, worsening the customer experience over time?
- What if a better solution is around the corner, yet yours is time-consuming to implement? Wouldn’t the company be better off waiting a bit?
- … and there are many more “what ifs”
Over my career, I’ve seen that purchasers make their decisions based on many factors, only a few of which are related to the product’s technical goodness. By contrast, many entrepreneurs rely on technical goodness (features, speed, capabilities) as the center of their sales battle plan. It therefore takes them by surprise when a “clearly applicable solution” is overlooked by the perfect customer. More often than not, the difficulty in getting the sale closed comes from a lack of understanding of the purchaser’s overall condition, which pretty much always includes the factors of career risk management discussed in this note. But, on the bright side, once you become aware of — and accept — the concept of helping your purchaser manage his career, you’ll be much closer to having the magic bullet that can unlock the stream of significant sales that will propel your startup forward.
To be blunt: To close large sales with corporate customers, manage the career risk of everyone in the purchase chain. Doing so will help you close more and larger sales, whereas ignoring career risk will lead to months or years of frustration and delay.
