According to recent studies by CEB and others, when your reps get invited into an opportunity [lead, RFP, etc.], the prospect is already 57% of the way through their purchasing process. The implications are significant on your cost of sale and your win rate. Chances are pretty good that the factors of competition or how you are being judged in a deal by the prospect’s team has many common elements from deal to deal. Your ability to differentiate and to materially impact your success coincides directly with an understanding of how you being judged and your skills in educating [or re-educating prospects].
Ponder this for a second. If you get invited to an opportunity and you know the game is already more than half over, what choices do you have? You have three. You can proceed with caution, exit the opportunity or try and re-educate the prospect and thus change the rules of the game by which you are being judged. Most organizations we have seen lack the process, tools and discipline to have this internal conversation. Emotion and gut feel make this a purely subjective dialogue.
Process, training and tools all play an important role in lowering cost of sale and improving win rates. A component of this relates to your segmentation / targeting and focusing on deals that you will be best positioned to win. Given your finite resources and what is required to pursue opportunities, sales leaders must ask the right questions to get the team focused on the right deals.
Lets go back to your prospective customer. They may or may not have a well-defined process or measurable decision making criteria. Either way, it gives you an opportunity to educate them. You do this every day and they may buy what you sell once every ten years. Who knows more about the industry, the trends and the best practices in how people buy in this market? The answer is YOU. Understanding how you are being judged in these complex deals allows you to make decisions [stay or go], educate and develop a true Win Strategy.
The concept of changing the rules of the game by which you are being judged is easy to understand and hard to do. I would argue that the foundation for this is based on the decision criteria of how you are being judged. Let me illustrate with a simple example that we used with one our clients.
Regardless of the industry, price / cost / total cost of ownership will always be a criteria. That said, do you know exactly how the prospect will compare you on this criteria called price? You could guess or you could ask. If you ask it gives you an opportunity to educate. Our client does many things that add economic value for their clients that they do not charge for that their competitors do. If the prospect does not know about these things and acknowledge the value, then we are just talking. One such example is the fact that our client does not have price escalators in their agreements [with an average term of 7 years]. It is cultural for them. Their competitors do. With an average CPI of 2% in the US over the past 5 years, this is an average 7% difference each year of the agreement and over 15% difference at the end of year 7. I asked the team whether they had ever lost a deal because they were 7% more expensive. Every rep said yes and in fact when you build in all the unique elements they do that add economic value, they are actually less expensive. The prospect needs to understand, acknowledge and actually change the criteria. That is our job.
If you understand how you are being judged, it allows you to become much more strategic in how [or if] you pursue opportunities. This is One of the many reasons we created INK Sales Strategy Software.Share