I Didn’t Know
Anatomy of a sales loss
The CEO of a software company was told that after a heated competition, the customer decided to stay with the incumbent provider as it would be too disruptive to change. A sales loss. They later learned the VP of Operations in the company they were trying to sell to, who carried significant sway in this decision, was an avid hunter and one of the attendees of an annual and lavish hunting junket hosted by the rival and winner. Said the salesperson of the losing company when told this, “I didn’t know that.”
A printing company was informed by a big box church, at contract renewal time, that their printing contract was being moved to another competing local printer. It was later discovered the owner of the winning printing company was the new brother-in-law to the person now making the printing decisions for the church. “I didn’t know” said the losing owner.
When the CEO of the incumbent Fortune 100 company was informed by his sales team they were going to lose a multi-billion dollar fighter jet contract, he stopped what he was doing and flew across the globe to meet with the country’s Prime Minister. He started his conversation in this manner, “Mr. Prime Minister, I apologize. I didn’t know your priorities changed for this jet fighter decision. Had my people known, we would have presented a different solution. We failed you. I respectfully and humbly ask for more time to correct this.”
A small business was a finalist in a competition to supply promotional products for a large company. “We’ve got this!” was the thinking of the owner at the time of the decision. They were shocked to hear they lost. Later they learned the person charged with making this decision was new to her role and this was one of her very first ‘big’ decisions in the company. Despite the fact this local small business was significantly lower in their pricing and deemed quite capable in delivering on the contract, she went with the ‘less risky’ bigger company. Said the owner of the small business after hearing her explanation, “I didn’t know our smaller size had you at all worried.”
This is a good reminder that people make buying decisions, not companies, nor boards, or committees. And that our job, when selling a product/service to a customer, is to strive to know how the people involved will likely make the decision.
Too many times sales people think all decisions are made in the same way. For instance, like WE would make a decision. They will discount to their peril the weighting of the person’s education, upbringing, confidence in his/her job, past experiences, results of past decisions, and/or internal politics has on the outcome of a decision.
Sadly, none of the go-to sales methodologies (SPIN, Challenger, etc…) puts much emphasis on this aspect of the decision making process. But my years of sales experience and consulting says this factor is the leading cause of the, “I didn’t know” excuse for most, if not all, sales losses.
Ask those in the company who came in second place in a competitive sales fight and they will swear they understood the problem, the magnitude of the problem, the cost of the problem, and the benefits of making that problem go away. In other words, the focus of most sales methodologies out there. And they will no doubt also swear that their solution and offer could solve the problem as well or better than the choice made by the customer.
So, if this is the case, why did they still lose?
Here is where the post mortem of a loss usually stops in a company. Why? Partly to save face, to not pour salt in an open wound, or to avoid holding anyone specifically accountable for the loss. Because if they did complete the post loss analysis to its rightful conclusion, here is what they will find:
The winning side knew something more than we (the losers) did about how this decision was going to be made. And their solution or offer reflected that knowledge.
Now I have no doubt a lot of you reading this will immediately start debating this fact. You will hide behind explanations like, “The competitor just low balled on their pricing.” or, “The customer is going to regret their bad decision.” Or, you will try to make yourself feel good by applauding the losing effort saying things like, “We gave them a good fight.”
Related article: 9 Phrases Typically Said By Losers of Large Complex Sales
All of these consoling words are used quite effectively to avoid admitting you didn’t do your homework as well as the other guys did. And if you are really honest, you will conclude that the sales methodology, if you actually have one (in doubt), or adhere to the one you have (more doubt), failed you. It left you vulnerable to the, “I didn’t know.” loss.
Do you want another good indicator that, “I didn’t know,” was the cause for the loss? Listen carefully for these three words, “I thought that…” from those involved in the sales pursuit when informed of the loss. As in, “But I thought Bob carried more weight in this decision than Tammy.” or “But I thought that they didn’t like those guys because of a past experience.” or “I thought that functionality was more important than sustainability.” or “But I thought that they couldn’t live with this software challenge any longer.”
Very early in my sales career, when reviewing the state of a multi-billion dollar sales pursuit I was leading, I was explaining to my leadership how a decision will be made by this customer. I made the mistake though of saying, in a concluding statement about one of the key people involved in the decision, “I THINK he will view the aircraft’s range as the most important factor in this decision.” My boss, a very gruff and uncompromising perfectionist to a new sales process we were taught, immediately interrupted my presentation by standing, knocking his chair over in the process, and saying, “Mike, we are not here to listen to what you “think”! You are paid to tell us what you KNOW, and if you don’t know it, what you plan to do to find out.”
I never made that mistake again.
I was fortunate to have been the recipient of several sales training programs and mentored by some incredible leaders. I was challenged to apply what I learned in arguably two of the most difficult of sales pursuits — facing off against Russian and European competitors when selling multi-billion dollar jet fighter programs to foreign ally governments, and later, fighting private business owner complacency, ego and status quo when selling $5K strategy and sales process consulting services.
Do I still get tripped up by the, “I didn’t know…” surprise loss? For the former I never did, yet, for the latter, I occasionally still do. I attribute those losses, every time, to my failing to truly understand how the owner was going to make the decision. I assumed they would make it like the hundreds of owners I have served before. Or, “I thought that…” When this happens it is yet another reminder for me to rigidly return to the sales process I teach, recognizing once again, you can’t serve someone unless you truly know them.
Listen here to a video interview of Mike about this “I didn’t Know” problem.
About the author: Mike is the founder of Allegro Consulting, a growth strategy and sales specialty firm based in Atlanta, Georgia. Mike, has an accumulated sales record of over $10 billion when selling military fighter jets to international U.S. allies for Boeing and Lockheed. Allegro applies his vast personal sales campaign experience and process to help companies dramatically improve their win-rate by profoundly transforming the quality and content of every customer interaction; an interaction grounded by the principal of being ‘in the service of’ your customer. Twitter: @growthguy
