Wednesday, July 11, 2012

Why Did We Lose the Big Deal? Five Questions Every VP of Sales Should Ask?

When we’re closing business life’s great! When we’re on the losing side of a deal, it is easy to feel like our entire world has fallen apart. Losing is a subject that most salespeople and sales managers don’t like to talk about. Therefore, the vice president of sales plays an important role in understanding why we lost the big deal because unless we truly understand why we lose, we will most assuredly lose again.
While losing to competitors is painful, losing to the dreaded “no decision” is even worse. We spent all the time, effort, and resources on an account that couldn’t even make a decision. Whether losing to competitors or “no decision,” true loss analysis starts by asking five fundamental questions that are inherent to every software sale.

Question #1 – Did we sell to the bully with the juice?
Some people are natural-born leaders. They have an aura that can motivate and instill confidence. They command respect and people naturally follow their lead. That person is called the “bully who has the juice.” In every software deal, there is only one person who is the bully with the juice and the sole decision-maker. Being a bully is not necessarily a negative term, nor is it necessarily the highest-ranking person involved in an evaluation. Instead, the bully who has the juice is the person who single-handedly makes the selection and can override the product selection made by other decision makers. People will argue that some purchases are truly made by committee. While a committee does put more “fingerprints of accountability” on the product selection, behind every committee is a bully who has the juice and the committee’s decision will reflect this.

Obviously, if the bully with the juice is backing another vendor you’ve already lost. When there isn’t a bully with the juice in an account, you should be prepared for no decision to be made. Conversely, if a bully with the juice does exist but you aren’t able to identify the person, be prepared to lose the deal because you are in a position of extreme risk.

Question #2 –Did we sell logically or psychologically?
Unfortunately, we have been trained to think of customers and ourselves solely as rational decision makers who use logic and reason exclusively. However, every software purchase decision can be traced to one of four psychological roots.
  • Survival. The will to survive is one of our strongest desires. We are wired to maintain our health physically, mentally, and emotionally. Buyers want to keep their jobs and for their companies to prosper.
  • Pain Avoidance. When something is hurting you badly, the desire to eliminate the source of pain is all consuming. Nothing else really matters. Buyers want to solve their most painful problems immediately and completely.
  • Self-preservation. We naturally seek the approval of others. While we want to be recognized for our unique talents, we still want to be part of a group. Buyers want to be respected and liked by their colleagues and peers.
  • Self-gratification. Everyone’s got a selfish ego, and we’ll go to great lengths to purchase something that makes us feel better about ourselves and superior to others. Egos drive the business world and someone’s ego is the driving force behind the major projects and the grand initiatives that result in the purchase of your software. Buyers want to make their mark on the world.

When you sell solely based upon logic you are destined to lose since the logical reasons people give for buying products are only rationalizations that mentally enable them to justify the expenditure. The successful influencer is the one who appeals to the four psychological motivators.

Question #3 – Did we know the decision maker’s fantasy?
All complex enterprise sales involve selling a fantasy. The fantasy is that somehow the software you are selling is going to make the customer’s life easier, save the customer money, or enable the customer to make more money. The feature set of your product validates the fantasy elements of your “story” and promote the customer’s fantasy. During the sales cycle, your goal is to communicate how you can turn your customers’ fantasies into a reality, but only when your product is selected.

Evaluation team members also have a “personal” fantasy. Maybe they want to master new software to enrich their resumes. Maybe they want to earn bonuses for cutting costs or increasing revenue. Maybe they want to be perceived as heroes within the company or to spend more time at home and less at work. Everyone has a personal fantasy that is associated with the procurement of a product. Heavy Hitters (truly great salespeople) understand and align their strategy with personal fantasies. They don’t just recite product features, benefits, and specifications.

Question #4 Did we have a coach or internal advocate in the account?
All successful software sales involve a salesperson being “coached” through the evaluation process. You need an internal advocate within the customer account to win the deal. This person is a constant, accurate source of information revealing the internal machinations of the customer’s selection process. The term “coach” is the popular name of a person who is the source of this privileged inside information.

Quite often, ordinary salespeople mistake someone for a coach when in fact the person isn’t a loyal compatriot. Several specific conditions must exist in order for a friendly evaluator to be considered a coach. First, coaches must have a personal reason for wanting the salesperson or his company to win. Second,
coaches need to specifically say they want the salesperson to win and be willing to fight for the salesperson’s cause. Finally, the information a coach provides must be accurate.

The ideal coach is the person with the highest authority or influence involved in the selection process. When this person becomes the coach, the salesperson will enjoy a unique advantage. However, the coach could be anybody inside the customer’s company or even outside the company, such as a consultant working on the project.

Why would someone coach one salesperson versus another? To establish a relationship with a coach, Heavy Hitters build different types of rapport with a customer. At the foundation is a special relationship, a personal rapport between two individuals. Although powerful, this personal rapport is meaningless unless technical rapport is present. Technical rapport is achieved when a product’s features satisfy the customer’s requirements. Finally, there must be a business rapport between the two companies to consummate the deal.

Heavy Hitters manage their time by qualifying people. They know before you decide to work on an account, you need to determine if you can find a coach (friend) within the customer company to help you win the deal. If you can’t develop a coach, it does not make sense to invest your time in any account.

Question #5 Did we build personal relationships with the C-Level Decision-maker?
Counter to common sense, psychologists believe the loneliest time of life is not retirement age but between the ages of eighteen and twenty-five. It turns out the age group you naturally associate with schoolmates, friends, and parties actually has the one of the highest suicide rates. This raises an interesting point. Regardless of how many people surround someone, how much fortune, fame, and power you think a person has, everyone is lonely in his or her own way. Loneliness isn’t only about being alone. It is when you feel disconnected, isolated, alienated, unwanted, inadequate, self-conscious, and unloved. Every C-Level decision-maker is uniquely lonely and the deal winner is the salesperson who is best able to build a mutual friendship.

Now I admire persistent salespeople and respect the underdog who will fight with passion and battle against the odds. However, sometimes it’s impossible to win. Such is the case when your competitor holds such a tight grip on the account there is no way to break loose their relationship. In some accounts, although they may not say so directly, the customer simply doesn’t like you.

Even facing these circumstances, some salespeople believe the customer is just playing hard to get or treating every vendor in this way (which they aren’t). These salespeople mistakenly believe they can turn the situation around by sheer willpower and determination. Recognizing when to abandon an account is as important as knowing what accounts to pursue. Ultimately, you will only win deals where you are given the opportunity to build personal relationships.

Closing Thoughts
The balance of power is definitely in the hands of today’s buyer and the situation will only continue to get worse. Today’s customers are smarter at buying software and more skeptical than ever. In addition, Product differentiation is at an all time low.

Your competitors have not sat idly by either. They’ve educated themselves about your products and sales tactics, and they’re more focused on defeating you than ever. Fortunately, they usually believe in the use of brute force and think the best way to defeat the enemy is by frontal attack, when in reality, winning over the hearts and minds of customers carries the day.

I recently completed an exhaustive study for a company to help them understand where they won and why they lost. A senior level decision-maker I interviewed made these poignant comments:
In the end it came down to the people we work with. We made it clear we weren’t buying a brochure, we weren’t buying a demonstration, and in fact we weren’t even buying a product. We were buying a 10 to 20 relationship and if we weren’t going to get that then we didn’t care about their product. All products fail, all products need to be changed and in five years if we hate the people we are dealing with it is not going to work.”

Ultimately, we are selling customers something much larger—the idea that we can help change their lives for the better, enable them to be a part of something greater than themselves, and partner with them for the long-term.