Why You Lose Deals

 

Why You Lose DealsI was attending an online sales kick off meeting where i heard Anthony Iannarino present. He is an international speaker, author, and sales leader. He posts daily sales tips and insights to The Sales Blog. Learn more about Anthony, his keynotes & workshops, or contact him directly.

He shared a list of 20 reasons why sales people lose deals. I found it incredibly useful and true. So, wanted to share the same with you all.

All these are addressed if you follow my SIMPLE framework for complex deals. This framework creates a step-by-step guide for you to increase your deal closures.

Here is the list of reasons Anthony shared in the keynote (with my personal notes explaining each one of them).

No compelling need:

We all know that for any prospect to decide and take action to buy something, there needs to be a compelling need for them to act now. Without the compelling need (or a burning platform) generally, there is no action. So, in the sales process, it is critical for us to create or identify the compelling need for the customer to take action. This also protects us from the biggest deal killer of all time, which is no deal.

Skipping stages of the sales process:

Selling is a process. Every product needs its own sales process. Some products are simple to sell, which means that all the steps or the process can be completed quickly, other products have a sales process that can be a week to a few months to even a few years.

One needs to define the sales process carefully, ensuring that the prospect is moved towards taking action and buying the product. Once the process is defined, it is critical that the sales executives follow the process. Trying to skip parts of the sales process only leads to incomplete information and the sale not going through.

Failing to control the process

This is probably the single biggest factors that high performing sales executives excel at. They control every stage of the sales process. They make sure that the remain in control, share the right kind of information and moving the prospect along the sales process at the right speed and involving the right people at the right time. Getting all the right people involved and following the deal strategy at all times.

Not staying in control of deals is probably one of the biggest mistakes that sales people do, that can be corrected quickly with a big impact on the overall conversion rates.

Failing to Gain commitments

In order to stay in control of the process, one needs to gain commitments from all the different stakeholders at each step of the process. Without commitment at each step of the process, there is no sale at the end of the process. This is like walking up the steps. You can reach the top without walking on all the steps first.

Failing to Create Value

Sales, more so with complex sales today require that you create or add value to your prospects and their business during every single interaction. This will ensure that you will continue to get time and ears of the key stakeholders through the process. How you can create value is by providing them with a different perspective or information that they already dont know about their own organisation, industry trends, uncovering latent needs or help create a vision for their future.

Focusing on Low Levels of Value

The kind of value that you or your product provides has a significant impact on how the sales process goes. If your prospect thinks that you provide low levels of value, you will be relegated to the lower end of the segment and the consequence of closing the deal with you being considered negligible. This does not augur well for your sale.

Failing to Elevate the conversation from Tactical to Strategic

This is where the business acumen of the sales executives play an important role. In order to be considered important investment, you need to be able to elevate your conversation to strateguic rather than stay at the tactical level. You need to be strategic from a perception, while tactical at the operational level.

Not developing a compelling case for change

The biggest deal killer is no action. In order to move your prospects, you need to create a compelling reason for them to change and change now. Failure to do so most likely results in the “No Deal” scenario.

Transactional Behaviours

While transactions are important, transactional behaviours are a no-no. You need to behave strategically, have a long term view of your relationship with the customer and transact when necessary.

Using Wrong communication Medium

Knowing your customers and stakeholders is critical in the sales process. This allows you to remain in control of the process. One of the most important thing to know about them is their preference of medium of communication. Some people like face-to-face conversations, some like email, some phone calls and some like to have conversations while sharing a drink or on social media. Knowing this and tailoring your communication accordingly creates a much better rapport and comfort with the stakeholder making it easier to gain their commitment.

Being Self Oriented

One of the biggest mistakes that sales people do today is to be self focused. Talking all the time about your product or company is not a great idea. You need to quickly establish your (company/product) credibility and move on to listen to your prospect. They will tell you how to tailor the conversation and which medium to use, who the key stakeholders are and a lot more if you give them the opportunity to do so.

Failing to identify the buying committee

If you don’t know who are your key decision makers and their influencers within the first few steps of the sales process, the chances of your winning the deal is minimal.

Failing to build consensus by Not Tailoring value to individual stakeholders

Most high performing sales executives are extremely good at this. They know the motivations of the different stakeholders in the sales process and tailor their communication with them in order to build consensus. This consensus is built before the final discussion is being done.

Not Dealing with Obstacles

Every sales process has objection handling as one of the phases as every prospect will have objections and questions. The earlier you are able to address them, the better off you are. In fact, i know of high performing sales executives who themselves bring up most of these objections at the start of the process and address them. This makes sure that there are no surprises as we move along and if these cant be addressed positively, we already know that the deal is not feasible and we can save ourselves and prospects a lot of time and effort. Prospects are also grateful if you step out of a deal if you cant address their biggest concerns as that shows that you respect their time as much as you do yours.

Focusing on Price instead of value

One sure shot way of reducing your conversation with your prospect is to focus on price. The only time this makes sense if you are solely competing on price.

Presenting Poorly

This is such a no brainer but I am always surprised by how many sales executives are poor presenters. This is such a great skill to possess and one that is so critical to their success, yet not many sales executives invest their time and effort in improving in this area.

Presenting what they haven’t said “yes to”

Most high performing sales executives already build consensus before they present their product or solution to the prospect, which makes this a formal process to be done with and with least challenges. Not many committees take decisions while in meeting. Decisions are already made even before the start of the meeting. Sales executives who understand this make sure that all the stakeholders have already said “yes” to their proposal before they present it to the committee.

Allowing the prospect to believe that price and value are the same thing

The earlier you are able to demonstrate the value that you, your product or your company brings to the table and are able to keep the conversation around the value, it becomes easier for you to differentiate between the value and the price.

Failing to provide necessary proof

If your prospect needs to see a proof that you or your product can deliver something, you need to get it to them as early in the process as possible. The failure to do so creates lack of trust, which is a deal killer.

Matching Competition price and strategy

Matching competition price and strategy means that you are no longer in control of your deal and that you don’t believe in the value that you provide to your prospect.

Poor Deal strategy

Every deal needs a clear strategy. This should include identification of the key stakeholders, their expectations, communication strategy, strategy around your competition, strategy on creating the vision and thought leadership with the key stakeholders, strategy for “No Decision”, which means identifying the compelling need for them to act and act now and a lot more. Failing to have a deal strategy is akin to “spray and pray”.

SIMPLE Framework: ‘Leading’ your Prospect to Close the Deal for Them

Simple Framework for Sales Effectiveness
Simple Framework for Sales Effectiveness

We are currently at the 5th stage in the SIMPLE Framework for winning at B2B Sales. If you have not already read about the first four steps (Surprise, Inspire, Motivate & Position), I would strongly encourage you to go back to those posts and read them in the right order.

The fifth step in the process is where most of the sales teams lose the deal to their competition. It is not enough to position yourself or your product/service/expertise to solve a need you helped your customer identify, you need to lead them through their decision cycle so that you are in the driving seat of the engagement.

What do we mean by leading?

You need to help your contact at the customer organization and help them in

Create a RoI or time-to-value point-of-view

Most organizations don’t invest in any product or service unless they are able to see a clear RoI (you can find my thoughts on RoI, more specifically to IT investments here). As the sales executive, we always need to be leading the engagement, which means that we should be actively helping our prospects to show a clear RoI on the investment. If there is a better measure than RoI that you think should be considered, help them put together that metric as well (in addition to the RoI).

Note that this is only a point-of-view document, which reflects the opinion of the teams involved in the purchase evaluation teams. Do not position this as a factual document (which is what most teams do and when the actual RoI calculated is not even close to the RoI calculations that were presented whilst making the decision, which is almost always) but as a well thought out point-of-view document, with assumptions that have been made to arrive at the point-of-view clearly listed down in the same document.

Create a risk of not doing this point-of-view

Almost all research has pointed to the fact that most sales are not lost to competition, but to inertia. So, you can help your prospect also create a “Risk of Not Doing This Now” point-of-view document. When done well, this reinforces the need for taking a decision and going ahead with the purchase for the team and their senior executives.

This also serves as a record for why the decision was taken, which in hindsight can be a valuable document to have.

Identifying the right stakeholders & help getting their buy-in

In any B2B sales situation, there are multiple stakeholders involved in the sales cycle. If you have done the previous 4 steps well, you would already know the various stake holders and have already built in their buy-in.

Now you need to help the purchase team get the formal buy-in from these stakeholders.

Identifying the key risks involved (yes, you need to actively help them identify them)

Most decisions involve some kind of risk. You need to help the team identify the risks involved in going ahead with the purchase of your product/service. By actively helping your customer/prospect identifying the risks involved, you not only gain the trust of the customer, you can also ensure that all the risks are identified & documented.

This also provides you a good platform to position some additional value added services that you and your team could provide in addition to the product/service that is already being discussed.

Create a mitigation plan

Its not enough to identify the risks, you also need to help your customer create a mitigation plan for the risks identified.

This is a good time to bring in a customer who has already been there, done that, to share his/her experiences and learnings with the customer. This provides you a great platform to reinforce the trust that you are indeed the right partner for your customer.

Create a change management or a execution plan

Any significant product/service purchase requires an execution plan and if it involves any change in the way employees at your customer organization work/communicate (which is true in most situation), help your customer create a change management project along with the implementation project.

Leading is a lot of Work

I know that this is the work of your contact at the customer organization. However, if you are to lead the engagement, you need to be involved in all of these steps as well.

Also, this is an exercise that if done well, practically ensures that you will win the deal.

Ask for the Deal & Close

And, the most important activity in this phase is to actually ask for the close. And once you reach this stage, you ask them to sign on the dotted line. This is when the final negotiation regarding prices will be done. If you have done all the 5 steps well, you losing the deal because of price will be a rarity.

Lead your Internal Stakeholders

You then need to lead your internal teams/stakeholders to ensure that the closing experience for your customer is smooth and without any hassles/surprises.

This is the experience that your customers will remember for a long time and it is critical to ensure that everything goes well.

Once closed, ask for a reference

The last activity in this phase is to ask for a reference. This if done well and consistently, your organization will always have enough pipe to work on.

This process doesn’t stop here. We still have one last phase – Execute, which I shall cover in a later post.

Your Turn

Do you have any further suggestions on how to close the deals? Do share them here and lets continue the conversation.

SIMPLE Framework – Positioning: What is Your Positioning Strategy to Move Your Deals Forward

Simple Framework for Sales Effectiveness
Simple Framework for Sales Effectiveness

We have earlier discussed the first 3 steps in the SIMPLE framework for selling – Surprise, Inspire & Motivate. If done well, this will bring your customer/prospect to a situation where they identify with a vision that you have painted for them and are motivated enough to take action to move towards the vision.

Once the customer is motivated to do something about the challenge that you have helped surface, you need to then position yourself or your product/service, such, that the customer feels confident that you will be able to help him resolve the challenge.

This is the 4th step in the SIMPLE framework.

There are 3 positioning strategy that you have in this case:

You position YOURSELF and YOUR expertise.

You should ideally do this when your product is either a commodity or is not known to be a leader in the category in the market. So, you position yourself and your expertise as the key differentiator from other possible options that the customer has. This positioning can work well, as long as we have done the previous three steps well. Through those steps, you have already created a certain amount of trust in your customer by proving that you not only understand their business, but understand it so well that you have been able to surprise them about their own business.

You position your PRODUCT or SERVICE.

You take this positioning strategy, when your product or service is already a market leader in the category and is known in the market to solve the challenges that you have already identified. This can also work if you have a lot of customer testimonials about how your product or service solved a similar challenge for them. This is also one of the reasons why we should always collect testimonials.

You position your USP (Price / Velocity / Support)

If you think that the solution that you have for the customer is a commodity and your expertise doesn’t necessarily count because of this, then you position yourself as the lowest cost provider or the provider who can do this the fastest or as a provider who has excellent support system, based on your organization’s strength.

Ideally, if you are able to use 2 of these strategies in combination and in the order that I have mentioned, it would be really difficult for your competition to take the deal away from you.

Your Turn to get Involved

How do you position your product, service, expertise currently? Please share your tactics and we shall continue the conversation.

SIMPLE Framework – The Most Important Step in the Sales Process

Simple Framework for Sales Effectiveness
Simple Framework for Sales Effectiveness

In an earlier blog post, I had introduced the “SIMPLE” framework to increase your sales effectiveness. I had elaborated on the 1st step which was about how to “Surprise” your customers to initiate their engagement.

The second step in the process was to “Inspire” your customers, which entails that you paint a picture of possibilities. 

The third step in the process is to be able to “Motivate” your customers to take action. The biggest competition to any sale being concluded is not your competitors but the “inertia” in your customer organization to change. 

We need to understand that every significant purchase involves some amount of change management – the complexity of which is directly proportional to the product/service purchased.

A lot of sales executives do a great job to identify potential challenges that their product or service could solve. They probably also understand the need to build buy-in from all the stakeholders in the buyers organization.

However, we need to understand that the buy-in alone is not sufficient if the sale that you are looking at involves a significant change (which is what you could expect if you followed the first two steps in the process).

You would need to be able to “inspire” them about their future and then motivate them to go for it.

You could do the following to motivate your customers to take action:

  • Acknowledge Inertia: There is a need to bring the inertia or the resistance to change to the open rather than allow it to be in their heads. 
  • Identify the risks involvedThis openness about inertia, will enable you to discuss and list down all the possible risks that the buyer could potentially face. 
  • Risk Mitigation: Also discuss some ideas to potentially mitigate some of the risks.

Notice that we are still talking to the buyer on his needs, challenges, possibilities, risks, etc. We are not yet positioning our product or services.

You can move to the next step in the process, once the buyer has identified some risks associated (if they go after the vision that you have painted for them in the “Inspire” step) and has some mitigation ideas.  

What you have achieved in the first three steps is the following: 

  1. Provide insights useful to the buyer. 
  2. Inspire your buyer about the possibilities.
  3. Motivate the buyer to decide to take action.
  4. And most importantly, created a good level of trust with your buyer.

Now, it is time for you to move to the next step, which is to position your product/service and explain why you and your organization are best positioned to help them achieve their vision (which you have helped them articulate). 

This is probably the most important step in the framework. It doesn’t matter, how great your insight was; it doesn’t matter how inspiring your vision was; if you are not able to motivate your customer to decide to take action, you are not going to get the business. 

Also, this is probably the most neglected step in any sales process and the chasm that most sales executives fail to cross, leading to many deals never seeing the light of the day. 

So, it is critical that we understand the importance of this step and spend a good amount of thought and effort in making sure that you are able to help your customers decide to move ahead and hence cross the chasm.

“Inspire” Your Customers to Stop Losing Deals to Status Quo – SIMPLE Framework for Sales Effectiveness

Simple Framework for Sales Effectiveness
Simple Framework for Sales Effectiveness

In an earlier blog post, I had introduced the “SIMPLE” framework to increase your sales effectiveness. I had elaborated on the 1st step which was about how to “Surprise” your customers to initiate their engagement.

Today, I shall elaborate on the next step – Inspire your customers. 

One of the biggest reasons why deals don’t go through is in-action. Sales teams don’t lose a deal to their competition but to status-quo. 

The first step in fighting status-quo is to inspire your customers to act upon the new insight that you had used to surprise them.

  1. Paint a picture for your customer about what their future could be, if they act on the insight that you have uncovered for them. Share it as a story, with as much details as you can imagine. Talk to them about how the change that you are suggesting will affect their organization and themselves as an individual driving that change. Compare their current reality to the vision that you have painted. Go back and forth between their current reality and the future reality. 
  2. Once done with this, paint a picture of what happens if no action is taken. Make it as vivid and detailed as possible. Research shows that pain is much better motivator than pleasure. Show the pain that they would need to go through if they don’t take action now. 

As a sales executive, you are in-charge of leading your customer through the journey to a better and more effective future.  And one of the critical skills that you need to cultivate is the ability to “inspire”. 

As you can see that the ability to “Inspire” depends a lot on your ability to tell a story. Highly effective sale executives have this ability. This is also the reason why you get to see so many CEO’s coming from the sales background. They need to develop themselves as leaders in order to succeed in selling. 

This is not just true for large complex sales processes but also in short and sales processes that involves impulsive purchase behaviors. These impulsive behaviors are most likely due to a moment of inspiration. 

So, if you want to stop losing your deals to status quo or in-action, learn the ability to “Inspire” your customers to action. 

PS: Nancy Duarte’s opinion about the structures of great presentations!