Entrepreneurial Leadership and Management . . . and Other Stuff

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18
Mar

The Art of Asking and Listening – Active Listening

In the Sales 101 book that I’ll eventually get around to writing, learning how to shut up may end up being the sole topic of the first chapter. It’s truly shocking to me how often I witness a sales person dominating a conversation with a customer. The less your customer speaks, the less likely it is you’re going to figure what his/her problem is and because of that, the probability that you’ll be able to discoverer an opportunity or address his/her needs will be almost zero. Simple as that.

Successful sales people listen to their customers, making each communication with a customer an opportunity for the customer to say more about themselves, their situation and their needs. As much as we have been taught that listening is a passive activity, good listening is actually an active one. It involves asking questions about what the customer is saying to show that you are, in fact, listening, that you understand what they are saying and that you are interested in learning more. As much as a conversation with a customer should never be about your ego, it should always be about their ego. Make them feel great about what they are saying and show your respect for them by working to understand fully and expressing your interest.

I was just in a meeting where two of the people at the table never said a word. This wasn’t a pecking order or hierarchy thing, they were equal players as far as the sale went. It was clear that their lack of talking had actually led them to be bored and disengaged within a few minutes of the start of the meeting. In this meeting, the sales person was doing all the talking. He never asked a single question of the two people or anyone else for that matter. At this point, I don’t think that sale will ever happen.

Societally, we often think of sales people as the best talkers. In fact, the best sales people are the great listeners.

 March 18th, 2011  
 Will  
 Management, Selling  
   
 2 Comments
31
Jan

Remain Aggressive

Be fearful when others are greedy.  Be greedy when others are fearful."

Warren Buffet

Every board meeting I’ve attended in the last several months has been dominated by discussions about preserving cash, getting to break-even and how crappy business will be in 2009.  I struggle with such discussions.  It’s not that I don’t believe that there’s a bumpy ride ahead for many companies or that talking about the situation can’t help, I just don’t agree with the conclusions that are often drawn from these talks.  The knee-jerk reaction is often to overcompensate, tightening down the business too much and in too many ways so it becomes ineffective and unable to move.

While I certainly believe in battening down the hatches when rough seas are ahead, I’m generally a glass-is-half-full kinda guy and I fully believe that successful companies move fast, always play offense, adapt quickly and continually innovate.  Yes, even when times are tough.  Contrary to several common VC themes these days, that means avoiding a defensive posture in terms of spending and headcount and to, instead, maintain a warily aggressive stance to your market and overall business.

"What?"  You say, "that’s insane.  I run the risk of running out of cash."  No, I’m not saying that companies shouldn’t examine cost-saving measures and reduce unnecessary headcount, but I am saying that you can’t save yourself to success.  Cutting deeply into muscle will not only be difficult to recover from later, but it will make you less competitive now, ultimately making it even harder for you to survive, let alone succeed.

If you’re not getting better, you’re getting worse."

Bill Belichick

So, how does one reconcile the anal-retentive need to hoard cash and protect assets?  How does a CEO convince his/her board that being cautiously aggressive is a better path than cowering in the corner until the dark clouds of uncertainty blow over?  You do it by making sure you respond instead of react, you never panic (check out Brad Feld’s excellent post on The Difference Between Panic and Urgency), but mostly, you make sure that every move you make is calculated and thought through.  No randomness and little experimentation.  Simply put, it’s back to the basics.

To be aggressive, you need to be lighter on your feet – able to recognize the changes required and to implement them very quickly.  You need to be smarter, do more homework and move quickly.  The way to achieve this business momentum is by acquiring more customer and market intelligence than you used to have.  More real data gives you the opportunity to speed up while being on the path most likely to lead to success.  You have to assume that nothing is coming to you – people, business or new ideas – you have to aggressively go out and hunt down everything that will move your company forward.

It’s easy to get lost in the myriad of dire predictions about your market or even the overall worldwide economic situation.  Randomly cutting costs and waiting until the news gets better is hardly a solution, though.  Before you do anything, think.  Do you know everything you need to know to give you a fundamental advantage over your competition?  Do you know what you don’t know?  Do you have a plan for finding out?  Sure, you’re going to have to make a few guesses, but make them educated ones.

Only when you’ve gathered all the necessary knowledge and wisdom should you be making the appropriate cuts to projects and staff.  And, only then will you be ready to move forward aggressively.  Of course, keeping on top of your customers and your markets doesn’t end there.  The diligence you used to set yourself up must be continued during the implementation of your new plan.  The more you know and the more energy you put into making informed decisions – especially staying very close to your customers – the harder and faster you can drive sales.

Or, you can stick your head in the sand . . . there’s always that.

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 January 31st, 2009  
 Will  
 General Business, Selling  
   
 12 Comments
15
Jan

Forecasting Sales in 2009

I’ve discussed how critical accurately forecasting sales is to a company’s success before.  In short, I think that companies that have the skill to accurately predict how much they will sell and from where those sales will come have a substantial advantage over those that don’t – they can grow faster and often without consuming as much capital in the process.  In my experience, too few companies value such expertise and of those that do, too many have a difficult time gaining it.

If it was hard before, forecasting in 2009 is significantly more difficult.  If your customer is a business, they are undoubtedly concerned with the stability of their customers and markets.  If your customers are consumers or end users, they are concerned about their paycheck and their savings.  The bottom line here is uncertainty and the conservatism and cautiousness that it results in.  No one knows what’s going to happen and while most people are bullish about the long term, the short term remains scary.

Most companies are struggling with budgets for the coming year and most individuals are stuffing whatever cash they have on hand into T-Bills at 0% interest to be safe.  It’s obvious, of course, that corporate budgets will be conservative and individuals will delay all spending decisions as long as possible.

So what’s a Sales VP and CEO supposed to do?  Ratchet down expectations to an absolute minimum level?  Just discount last year’s sales by some arbitrary percentage?  Come up with a number by gut feel?  Use Q4 2008 or December 2008 as a benchmark for 2009?  No, no, no and buy a lottery ticket instead (it is highly unlikely that Q4 or December numbers will have a strong correlation to 2009 numbers).

Difficult economic times simply require that forecasting be a more rigorous discipline than in good times.  To be accurate, more data is needed and each sales person needs to be closer to their customers.  In really good times, yearly forecasts are sometimes possible, in normal times, it drops to quarterly, in tough times, weekly forecasting with real data from customers is required.  It’s more work, of course, but the payoff can be very big.

So here are some specific ideas about how to develop better sales forecasts for 2009:

  • Find out what’s budgeted and when – does your customer have a budget?  If so, is your product/service category included at this point?  If so, when?  Pretty black and white.  If your product/service isn’t even budgeted, the sales process is all about getting it into the budget.  In the mean time, that customer isn’t on the forecast.
  • Find a champion with power – any sales person worth their salt finds someone on the inside (for business customers) that helps them make the sale.  It is more important than ever that this person also has some power.  Even better if they are the one who actually owns the budget.  The closer you are to the money, the more accurate your forecast can be.  Duh.
  • Build visibility – having a champion is great, but the more you know about the customer, the better.  Individuals are tough in this regard, but businesses are easier.  How is the target company’s market doing?  How well or badly do the service people in the company say that things are going?  Take a random sampling from all your contacts at the customer and ask them how the company is doing and how badly they need your product or service.
  • Talk with your customers and potential customers frequently – just because they told you everything was fine last week doesn’t mean that it remains cool this week.  Even if your champion is the company’s CEO, don’t assume that they have infinite visibility into what’s happening.
  • Be paranoid – deals are likely to be smaller and more competitive than ever.  Your competition is desperate and will be working their hardest to get the sale that you think is your birthright. 
  • Make no assumptions – uncertainty is just that – lack of certainty.  A customer should only make it onto the forecast when you believe you’ve captured as much information as possible and it all points to a sale happening for a certain amount within a certain time frame. 

Interestingly, none of these steps is any different from what a good sales person should be doing in the best of times.  The only difference is the frequency and perhaps, the level, at which they are done.  The more rigorous the process, the more accurate the forecast.

Forecasting is never perfect even in the best of times, but more data can make forecasting a relatively accurate process even in the worst of times.

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 January 15th, 2009  
 Will  
 Management, Selling  
   
 3 Comments
22
Jul

Bugs . . . They Eat Product Sales for Lunch

Sure, it’s theoretically possible to create bug-free high-tech products.  That is, products that seem “bug-free” to the user when they:

  • are used exactly as intended by their creator
  • are used by users who are only looking for a common and strict subset of the product’s prescribed functionality
  • are always used in the same, well-known environment
  • are intuitive or their use is completely understood by the user

But is it commercially feasible to make them bug-free?  Can you keep up with the market when differentiation is virtually unsustainable, if even achievable, while trying to discover and repair 100% of the potential failures in a complex product?  I can’t imagine how this would work.

A guy who came to work for me once had just come out of a software development gig at NASA.  At the time, NASA believed that an experienced engineer could produce only 3 lines of fully-debugged code per day.  It’d be difficult to find commercial success without thousands of developers at that rate.  Even that didn’t prevent NASA from plowing the 1999 Mars Climate Orbiter deep into the surface of the Red Planet as a result of a screw up that had one team working in English units and another working in metric ones.

Of course, the discussion of whether or not the creation of bug-free products can or should happen is a big one.  One which I neither have the capability no inclination to address in this post.  What I want to talk about, though, is the sales impact of bugs.  Bugs found by customers during key evaluation and decision-making moments create the biggest barrier to effective selling there is.  When the customer finds problems with your product while making a decision to purchase, renew, upgrade or simply add more to what they’ve purchased preciously, the sales person not only loses their ability to hold the line on sales terms, but they may get caught in a quagmire of having to deal with the bugs instead of closing up the deal and moving on to a new customer, virtually killing sales productivity.

So, even if we accept the fact that most high-tech products are bound to have some bugs, it’s critical for any company doing development to at least make the product appear bug free and limit the chances of the user finding bugs at critical times or in critical places – the most important of those being during the sales cycle.

Yeah, yeah, yeah, you purists out there don’t like thinking about it this way, although from a corporate standpoint, it may the biggest issue.  You’re saying that it’s about the technology, the product, the elegance of the solution.  That’s all nice, but if you plan on making money with your product, it better have great curb appeal.  And, there’s nothing quite like your baby failing miserably during an eval to get your customer to search for a competing solution quickly.

Think about a spreadsheet that shows off one, single math flaw in testing.  Will the customer ever trust it again?  What about the blood pressure monitor that reads 50 points too low once in a while or a GPS receiver that loses it’s satellite connection intermittently (perhaps while guiding a cruise missile?).  These bugs create unrecoverable sales issues.  Pack it up and head back to the office because that customer will never write you a check.

I’m not saying here that your product can be crap once the user has paid for it.  When the user encounters problems, which they inevitably will do after purchase, you need to support the hell out of them and get the bugs addressed as quickly as possible.  My point is simply that in terms of priorities, eliminating bugs that are likely to be found during the sales process is a higher priority.

Thus, it’s critical that after making sure that your product does all the important stuff you claim it does, you wring out sales prevention issues as a top priority before delivering it to customers.  It’s not hard to do, but it does take extra effort in terms of preparation and fortitude to prevent the knee-jerk reaction of shipping a product as soon as it meets the most basic quality criteria.  Here are the minimum steps required to make sure that the product helps sales, not hinders them.

  • First, eat your own dog food.  Use the “completed” product exactly like the customer will use it during the evaluation.  Think about the mistakes they’ll make along the way and how they will deviate from the prescribed route and flow of how the product is supposed to be used.  Build an environment in which your product can be regression tested the way the user will try to break it and pound it to death.
  • Then, if you have customer support or field engineering people, use them to route out problems.  These people are the closest to the customer, so they usually have a better sense for how the product will be used than the engineering team.  The idea is not complete and thorough testing, the idea is to find all the problems that new user will likely hit as they ramp up quickly.  Key areas to test are not only functional errors, but speed and capacity.  During this period, these employees should rule – don’t let anxious engineering or marketing people wave them off.  If they say it’s a problem, it likely is one.
  • Then and only then, beta test it at your most friendly existing customers (if there are no existing customers, have your employees on site when the prospective customer is trying it out).  Ask them to involve novices who don’t have a preconceived notion for how the product should be used.  Love them and care for them.  Make their effort worth their while – give them free product or another gift of some real, perceived value in return for the efforts.
  • Don’t forget to use Sales 101.  Understand what’s important to the customer and how they plan on testing the product.  If there are known issues that are in the process of being resolved, disclose them and ask the customer to test these areas at a later date.  Set clear expectations about what the new product is supposed to do and how it’s supposed to do it.  If the customer expects something that they don’t get, there will be a problem.
  • Finally, as new customers run into problems, jump all over them fast.  If the problems aren’t too severe, you can blow them away with your support.  Sometimes, great support will overcome some of the issues that occur when bugs are encountered.

Remember, there are always bugs.  There are the ones you find and the ones you don’t (some of these being later discovered by your customers).  The more effort you put into loading up the first category, the easier it will be to sell your product (duh).  Once a customer has adopted your product, it’s much easier to make them happy and to work around issues they encounter.  You’ll never get the opportunity to to this, though, if they haven’t become a customer in the first place.

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 July 22nd, 2007  
 Will  
 Management, Selling  
   
 2 Comments
26
Mar

Motivational Sales Incentives and How to Screw them Up

Incentives differ from rewards in that they are known up front.  While a reward is granted to recognize an action or achievement that has already taken place, the goal of an incentive is to induce behavior that results in such an action or achievement.  In this way, an incentive works like a carrot, motivating an individual or a group to achieve a desired objective.  That is, if it’s done right.

Sales as a function and sales people as individuals tend to be driven by ego and, therefore, competition and recognition.  Not that people in other corporate roles aren’t competitive or don’t like to be recognized; it’s just that for sales people, competition and blatant recognition is implicit and somewhat necessary in their jobs and, likely, a big part of their psyche.  In this way, incentives which both create competition and recognize achievement, are great tools to drive a sales force in a particular direction.  If you can find that thing that everyone wants, sales people will compete for it and move in the desired direction.  Winning drives ego, which further drives competition.

Sometimes, a great incentive is as simple as bragging rights.  In one of my companies that had a larger direct sales force (many territories throughout the world with hierarchy within each territory), we gave a trophy to the territory that had the most bookings each year and one to the territory most over quota.  Very simple, but hugely motivating.  It was a blast to see the winning team encircle the trophy for a group picture AND see how many of the sales people in the winning territory hung that picture on their office walls.  In a sense, it was even better seeing the losing territories vow to win the trophy in the next year.

Sales clubs (often called President’s Clubs or Chairman’s Clubs or similar), a junket to recognize the top sales performers each year, are more complex and expensive, but are huge.  Those who go get their egos stroked and truly feel rewarded.  They commit to themselves (and their spouses who also enjoy the lavish reward) that they will earn the reward again the following year.  Those that don’t make the cut usually have their competitive juices boil over and recommit themselves to earning a seat at the table in the next go-around.

Like any apparently good thing, you can take this type of structure too far.  I did this a few years back when my company at the time, Viewlogic Systems, was doing very well.  We were routinely ahead of plan, the stock price was moving northward, we had several industry-leading products and everyone was happy.  In our exuberance to motivate the sales team even further, we put in place an additional incentive – the number one sales person, in terms of software bookings for the year, would drive away with a new Porsche.  We had pictures of a Carrera on everything.  On sales training materials, on compensation plans, at sales meetings and, of course, all over the internal sales web site.  Sales people bought Matchbox Porsches to keep on their desks.  The incentive did everything it was put in place to do – it motivated the people and gave them another big rallying point in competing to be number one.

There was just one little problem.  We put a small failsafe into the deal.  To win, you had to not only have the highest bookings in the world, but you had to be a certain percentage over your quota.  At the beginning, this seemed like a no-brainer.  Come the end of the period though, this was the undoing of similar incentives current and future.

The problem was that no one achieved the percentage over quota required to win.  So, I was stuck.  Should I give the car to the person with the highest bookings even though they didn’t meet the other criteria, or should I stick by the book and not give the car to anyone.  As amazingly stupid as it seems to me today, I chose to do the latter – no one got the car.  I squirm in my seat thinking about what a moron I was.  By not rewarding someone with the car, I killed most of the motivational potential of such an incentive for years to come.  I likely took with it the motivational component of many other incentives in place as well.  I stuck a rusty nail into the balloon and it exploded.  I’m such an idiot.

The real mistake was setting up the incentive wrong.  here’s what I learned:

  1. Make sure someone’s going to get the incentive – set it up so that there is nothing that can ever prevent the awarding of the incentive put in place.  That means all criteria for the award need to be relative, not absolute.  Once it’s in place, you’re committed to awarding it to someone, otherwise the incentive won’t work the next time around.
  2. If you’re uncomfortable with the cost, size or significance of the incentive, don’t do it – incentives, sales incentives in particular, are playing into the hands of people who are already naturally competitive and are desirous of any public recognition.  They don’t have to be big.  Sure, it’s nice when they can be, but you just don’t need to go overboard to get the desired effect.
  3. Make sure that the metrics that are used to measure achievement are really, really clear and easy to understand – if every eligible sales person for an incentive needs to build a spreadsheet to calculate where they stand, you have a problem.  Not only should the metrics be clear and simple, but every person should be able to figure out where they stand in comparison to their “competition” on a fairly regular basis.  This simplicity and comparison is what keeps the motivation effect going.

I’m sure that I’ve missed a few hundred other potential mistakes in implementing this basic management tool.  Please tell me you’ve seen someone who’s made an even more moronic move than me.  Do you have other stories?  Lessons?  Here’s your place to vent, reveal, blame or even confess . . .

 

[Note 1: Rewards can have a subtle incentive effect when given publicly.  People generally assume that similar actions or efforts will be recognized in the future if they perform or deliver in a similar fashion.  In this way, rewards work as a carrot as well in some cases.]

[Note 2: Be careful when applying incentives like those mentioned here to groups other than Sales.  Sales people become sales people because of their unique skills and, more importantly, the way they think and handle the emotional roller coaster that is part and parcel to selling.  Not all people are the same and, as such, incentives like these may backfire if applied to them.]

 March 26th, 2007  
 Will  
 Management, Selling  
   
 9 Comments
21
Feb

Buy the Customer Lunch – At His/Her Office

One of the greatest challenges in direct sales is having your customer commit time to listening to your pitch.  Good direct sales people work hard to eliminate any and all barriers to such a commitment because even the most compelling pitch won’t get you anywhere if it’s not heard.

One tool for getting an audience to hear you out early in the selling process is bringing the story to them.  Instead of asking a potential customer to take time out of their busy day to travel to a meeting, eliminate any time or effort barriers – buy them lunch at their office.  Pick up some pizzas, have sandwiches delivered or order from the prospect’s cafeteria.  Free food is a surprisingly strong draw and will make it much easier to get a foot in the door.

Even better, have the prospective customer arrange a conference room and also invite the prospect’s colleagues along for free food in exchange for 45-60 minutes of listening about a cool new offering from an interesting vendor.  This way, of course, you’ll get more people involved and increase your chances that someone will latch onto your message and become a champion of it.  The implicit commitment made by each attendee goes a long way and the even larger commitment by the organizer of the meeting will help develop some ownership of the process in the prospect as well as to help establish a partnership between you and he/she.

In selling, those early audiences are difficult.  Early commitment is even harder.  Removing barriers of effort and time while establishing an early relationship with prospective customers can help you get both.  Easy access to free food is a great way of making this happen with benefits that far exceed your cost or effort.

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 February 21st, 2007  
 Will  
 Selling  
   
 8 Comments
15
Dec

Understanding the Sales Mentality

One of the problems that many young companies and new CEOs encounter is dealing with the cultural differences between a company’s various functional groups as the organization grows.  Different roles require different philosophies, attitudes and methods.  Sometimes, a person in one group has a difficult time understanding the actions of a person in another.  Left unexplained, this situation can create a rift between people who often need to work closely in order for the company to perform at it’s best.

Nowhere is this more apparent than in the substantial gap between how, say, an engineering or operations group is run and how a direct sales group functions on a day-to-day basis.  This video, titled “A Few Good Expenses” says it all pretty well, I thought. 😉

YouTube video link: http://www.youtube.com/watch?v=0OTgb3KO7QM

 

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 December 15th, 2006  
 Will  
 Selling  
   
 4 Comments
13
Oct

Making the Best Out of Life’s Second Place Finishes

A friend and cohort at Carbon Design Systems, Scott Seaton, made the following comment on my post Selling – How to Make the Best Out of a Second Place Finish.  I think it’s important enough to warrant its own post:

“The interesting point is that there is a bigger picture to the positioning yourself as a strong #2 beyond business and significant others.  It applies to life!  From the time you’re a young kid thru your adult years you’re building a personal and professional brand of one.  You could say that positioning yourself as strong #2 is about taking the long term view when you make decisions.  If we always did that throughout the personal and business aspects of life, then it would be hard to imagine not being more successful.”

Scott is an ace sales person and manager.  In full disclosure, he taught me the point about the value of second place and what to do about it almost 20 years ago.  It’s been a true breakthrough for me as a businessperson.  Scott’s point here drives home the fact that this is not just a good business strategy.  It’s also a good life strategy.  Too many people just quit and move on instead of taking advantage of the work they’ve done and the position they’re in.

So you came in second place.  So what?  What can you learn from the experience and how can you move from second to first?  It’s easier than you might think.

Excellent point, Scott.  Thanks.

 October 13th, 2006  
 Will  
 General Business, Selling  
   
 2 Comments
25
Sep

Why Free Trials are Rarely Actually Free

Dharmesh Shah, fellow member of Feedburner’s My Way network, has a terrific post titled Selling Software: Why Free Trials Aren’t on his OnStartups blog.  In the post, Dharmesh makes excellent points about how free trials are far from a zero-cost decision from the customer’s standpoint.  He also points out that the success of a free trial depends on the developer putting extra work into both the product and its support.  Thus, the word, free, is a misnomer for both sides of the table.

In my experience, I have also found that free trials or, free products for that matter, are often perceived to have value equivalent to what was paid for them – nada.  Most people have a deep-seated belief that you get what you pay for and will often not invest the time or energy into making the implementation of a product successful if they did not pay for it. 

This is not to say that free trials or products are bad.  It just means that to make such a distribution device successful, you need to think of what your end-goal is – upgrades, add-on services, unseating the competition, seeding the market, or whatever.  The “free” part needs to be a piece of a much bigger strategy – one which includes making the customer successful with the “free” trial or product and a path to eventually getting revenue from that customer.  You’re just not going to make it up in volume.

Check it out.

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 September 25th, 2006  
 Will  
 General Business, Marketing, Selling  
   
 Comments Off on Why Free Trials are Rarely Actually Free
04
Aug

Selling – How to Make the Best Out of a Second Place Finish

If you sell something – a product, a service, yourself, whatever – there are inevitably going to be times when you lose to a competitor, your customer finds an alternative solution to his/her problem or he/she simply decides to do nothing.  When your selling process doesn’t involve much direct contact with your customer (selling indirectly through dealers, distributors or VARs or directly via the Web) it’s difficult to determine if you’ve lost a deal because you were never interactively engaged in closing one.  If you sell directly, though, the painful reality of the loss is not only immediately experienced, but is completely actionable.

More often than not, when a direct salesperson loses a deal, they quickly move onto the next deal, licking their wounds and fretting over the time they wasted on the lost sale.  When they do this, they pass up on a huge opportunity for future sales to that “lost” customer.  This opportunity presents itself because of a variety of reasons, but the two primary ones are:

  • People are uncomfortable saying “no” and, for the most part, feel bad about telling you that you lost to the competition.  When this happens, they are easily convinced into doing something for you in return for your acceptance of their rejection.
  • The honeymoon is over once the sale is closed.  The support and focus offered by the winning company will decline and problems with the product/service will be uncovered.  The customer will almost assuredly question if they made the right choice during this period.

Aside from the hard-ass purchasing agents that you may have to deal with in closing a sale once in a while, buyers of your products or services are generally reasonable people that have trouble dishing out rejection.  Even if it’s not outwardly apparent, most people struggle with it.  So, when they tell you that you’ve lost on your bid to sell to them, they will likely be open to granting any reasonable request that you make in order to allay the bad feelings they have about conveying the negative news they’ve just delivered.

Of course, the request has to be reasonable, but you should feel comfortable asking for their evaluation documentation, final decision criteria, access to the person or team that made the decision, even phone numbers of high-level executives in the company that might have only heard about the final decision as opposed to being involved in making it.  The goal of what you get should be to positively set you up for the next time around.  By using the opportunity you gained by losing the sale, you can get access to information and people that will help you form a relationship that you can base future sales on.

While you are using your recently created leverage to build a solid and positive relationship with your newest best friend – your lost customer – your competition will likely be struggling to meet all the promises made during the selling process.  During this time, you should be using the good will you have developed to lock-in you role as the clear alternative to the winner of the initial sale.  If you work the situation well, you may get some strong advocates inside the customer to start to lean your way and eventually, may set up another opportunity for you to sell your wares to them again.

None of this effort need get in the way of working other deals at the same time.  It’s surprising how little time it takes to leverage your loss.  In fact, the opportunities are actually put on the table by the customer.  All you have to do is take advantage of them.  A few phone calls, several emails and a lunch or two and you’re well on your way.  The trick is that you have to keep after it.  As it is with any selling process, no news is almost always bad news.  Keep the lines of communication open and active and you’ll be amazed at how far you’ll get.

Two important factors to consider in your effort to be your lost customer’s best alternative are whether or not they are an experienced buyer of the type of solution that you and your competitors offer and, if they have been a user of a particular product or service for a long period of time.  If, for example, they are buying a solution in your space for the nth time, they are likely to have developed some expertise in the area and will be relatively knowledgeable about their own needs and how the offered products and services are differentiated.  A similar situation exists when they have used one competing product/service for a long period of time.  They will be experts in that product/service and will have developed internal processes around it.  In both these cases, making yourself the best alternative is still valuable, but it is less likely that you will replace the chosen solution in the short-term.  As such, you should balance your efforts in these accounts with the likelihood that you can make headway in them.

Good salespeople never pass up on the opportunity to capitalize on a loss – a second (even third, fourth or fifth) place finish.  Since they’ve already done most of the selling work required, the effort in a loss is to build a strong relationship so they are the first people contacted when the customer runs into problems with their first choice.  Since a reasonably high percentage of first sales fail, the salesperson positioned as the likely alternative often finds themselves in the position of losing the battle, but winning the war.

 August 4th, 2006  
 Will  
 Selling  
   
 6 Comments