Selling the Impossible or the Art of Bad Sales Strategy
In today’s market, winning in major accounts in public procurement is becoming challenging. Sales coaching is so important because it provides an outside perspective.
I have always liked coaching people in sales even by asking my colleagues to be in sales mode all the time with customers. A good Danish friend (Björn) works at financial services company throughout Europe active on public markets. He is dynamic with an excellent network in the business community.
He was recently asked to get involved directly in sales, and he will have a sales target for the next year. Sales at ATC FINANCE (his employer) are low by now, and the former Sales Manager was forced to leave the company. He tells me that in this new function he is only focused on public markets. Björn tells me he will bring new opportunities for new framework contracts.
The weird thing is this: every time he qualifies an opportunity, Björn’s management responds unenthusiastically, and offers no support in any of the offerings. He admits to me that the company has only two framework contracts (NAT and AUR9) on which they sell financial service solutions, the rest being a conglomerate of sleeping framework contracts.
To start with, this new assignment, Björn needs to make his figure by selling on existing sleeping framework contracts, and to simultaneously win new framework contracts. For these new contracts, the sales cycle is at least two years until the first revenue recognition, however his boss demands results within six months. As a good coach, I warn him not to dream too much.
Björn further explains that his Managing Partner Robert does not bring back much business, and does not visit customers often. According to Björn, Robert seems not involved in any direct sales on the framework sales contract won the previous year (offers that have been supported by Robert.) I conclude that Robert had a personal agenda and did everything to get promoted. His strategy was to win framework contracts by putting very low prices, but knowing the company would be unable to deliver at the contracted price. Nice strategy to get a promotion indeed!
As a coach I must absorb Björn’s frustrations because Robert harasses him. He constantly chases him for purchase orders.
Björn and I conclude that their delivery cost is higher than the sales prices of the framework contracts. He is in the position of “Selling the Impossible”.
Every time that I have a discussion with Björn, I realize that his case is very interesting. It could be a case for students in a business school. For the year 2017, he asks me for an outside view of his sales plan. Things get complicated because ATC FINANCE imposes double margins compared to competitors. By analyzing its sales plan, we realize that ATC FINANCE wants to make much profit on public procurement, which has the reputation of being a revenue market. On the other hand, paradoxical means that some of the segments on which ATC FINANCE is present are much unexplored with little competition. ATC FINANCE has solid customer references in these last segments, but with private sector clients. With a cost-based 10% more expensive than the competition and a margin of 10% higher, ATC FINANCE is still 20% more expensive in overall. Difficult to convince public organizations that base their decisions on the price!
A few months later, Björn informed me that from now on he has been working for TN Inc. for three months and that he has just submitted a bid for the NAT and AUR9 contracts against ATC FINANCE. Surprising that ATC FINANCE has agreed to see his Sales to the direct competition that will hit them. It is suicide without applying the contractual clauses of the employment contract to the competition.
Questions are interesting to ask, how companies like ATC FINANCE quoted on the Stock Exchange can appoint Managing Partners with no strategic vision.
Having a sales team is a luxury goal a must do to have a plan to execute. While these good people agree on the need for solid strategic thinking, most would also acknowledge that “random activity conducted with urgency” too often is substituted for strategic thinking. This is a masquerade that needs to be unmasked.
Three stagnations — Silliness, Slip, So vague -, which cause “mistaken identity”. Let’s look at these stagnations and explore the importance of best practice to move from a bad plan to a strategic one.
Silliness
A strategy always requires the collection of information about accounts and customers and converting all this information into a concrete action plan. Silliness occurs when the work of collecting and analyzing this information is neglected or even marginalized.
The wrong strategy occurs senior executives don’t know the customers and combined with overconfidence and arrogance. Thinking the competition does not exist. Their vision of sales representative is just there to fill the “forms” and do all the bureaucratic administration with. This management is disconnected from the market reality and sits in an ivory tower.
Slip
In major accounts, an effective strategy must define what you want to achieve and how to get there. This requires setting clear objectives for an action plan to know how to get to the right people.
Slip occurs when there is a lack of dedicated business model and skilled resources for specific segments and in line with the sales cycle.
So Vague
Selling on major accounts is not taking the phone and making sales calls. It does not either jump from opportunities to other ones and to stop them afterwards.
It is a coordinated action set with other actions that are linked.
So vague when senior executive does not have vision over the major accounts. The plan should include what the sales representative will do and what they will not do. What was experienced in the past and didn’t work? This is called company memory.
In the case presented, ATC FINANCE must innovate and rethink his business model and people appointed. For Björn we could only say selling the impossible is possible but at the competition.
Vincent Forge
