Have you ever lost a deal that you knew you should have won?
How you ever won a deal that, in hindsight, you wish you’d never won?
Art Fromm and Susan Hall discuss three strategies to address these two questions in the following article. Art Fromm is a Sales Strategy expert and Strategic Enhancement Group consultant whose work with global Fortune 100 companies has transformed their organizations and yielded tangible, documented results. One of Art’s clients, a global electronics manufacturing outsourcer, credits their collaboration for helping them increase their bookings by $1 billion and improving win rates from 58% to 74% within 2 years. Art began his career as an engineer and quickly moved into the Product Life Cycle Management Application space supporting multi-discipline 3-D Modeling and Product Data. This led to Sales Engineering, Account Manager, and Sales Leadership positions with leading enterprise software and information management companies where he routinely surpassed revenue and performance targets and led sales teams. Currently, Art consults and facilitates training to help sales teams identify and pursue more profitable, strategic business that brings higher levels of value to both the sales organization and the client.
Welcome Art. I’m so excited to talk with you. Every time we work together, I learn something important. We know that it’s critical that sales organizations look at each opportunity from two perspectives: the consultant’s perspective – “Are we bringing value to the client?” and the Strategist perspective “Are we making the best decisions for our organization.” Check out my blog post, 4 Skill Areas of Highly Successful Salespeople to get a more in depth perspective on how highly successful salespeople whose continued success depends upon long term business to business relationships with customers.
These two roles are equally as critical and can sometimes feel as if they are competing. But the highest performers know how to keep both perspectives in play throughout the sales process. Can you start by talking a bit about the downside of not thinking strategically when identifying and pursuing opportunities?
I was talking with a client recently who lost an opportunity that cost them over $2 Million and took 18 months to pursue. What was interesting is that the Vice President said “we never should have even pursued this business. We were attracted to the sheer size of the opportunity, knowing that it wasn’t our forte’.”
There is also a huge opportunity cost here as well. Think of the other opportunities they were missing with all of the resources they were spending going in the wrong direction. Sometimes the temptation is to chase after everything, betting on the numbers to work to our advantage.
We’ve heard it before - 100/30/8 or other ratios which document that it takes 100 leads to get 30 connections to get 8 deals. The problem with this approach is that the only way to get more wins is to chase more leads, but no one has time for that. It is hard enough as a salesperson to stay totally objective, but how many times do we chase after something that really looks good but may not be strategically aligned?
By focusing on the things that are best aligned with what we can provide we will be better equipped to deliver a mutually beneficial outcome, and achieve better customer satisfaction, increasing revenue, margin, etc. And we’ll be able to eliminate much of the noise and distraction of chasing after everything, thus increasing win-rate and optimizing use of our time and resources. Thinking smarter means focusing on leads that are best aligned to your strategy and align with the corporate goals and vision.
There is a lot to cover on this topic, but for today’s purpose – in your experience, what are the 3 most important best practices to help organizations sell more strategically?
First, there needs to be top-down clarity and commitment to the strategy of the organization, and how that translates into opportunities and projects the company decides to bid on and pursue.
For example, one of my clients was in a very crowded industry, whose base business was made up of numerous, low margin projects. They were chasing everything that moved and being relegated to a “bake off,” almost always competing on price. They were losing profit and market share.
Jobs were on the line.
The viability of the company was on the line.
Traditionally their target stakeholders were lower level, highly transactional, and price sensitive. We helped them identify broader/higher/wider criteria for what an attractive opportunity actually looks like for their organization, based on the organization’s strategy to shift to a more life-cycle focused, strategic business which was truly a differentiator and elevated them above the current level of engagement. This way, they could evaluate opportunities against objective criteria and more quickly decide if this was an opportunity they wanted to pursue, keeping them from being stuck in yet another bakeoff with dozens of other competitors.
Right. Helping them make better, faster “Go/ No Go” decisions. It’s interesting because I’ve worked with clients who had one strategy, such as higher margins, yet that didn’t translate that to the field. Their sales team was still chasing and being rewarded for low margin projects.
What’s great about having project opportunity criteria is that, even if the sales team determines that they want to pursue a less desirable project for some reason, they know this, and can allocate the appropriate resources for the size of the project. You don’t invest million-dollar opportunity resources into a hundred-thousand-dollar project.
Exactly. And just by reducing the number of projects they bid on, and focusing on selecting the more desirable opportunities that met their criteria, they improved their win rate by 33%.
What other best practices have you seen high performing, strategic sellers use?
It’s critical to understand the client organization’s decision-making process. For example, Technical buyers may be able to say “No”, but they don’t have the authority to say “Yes” and move the deal forward.
For example, a lot of technology salespeople deal with IT departments. IT is in service to the rest of the organization. If I’m trying to sell a solution to IT, I don’t stop at IT. Who are their internal customers? Who are they supporting? They are the ones who will benefit from the solution and support the budget. It’s important to find the Relevant Executive – the person who has the most to gain or the most to lose. They are the ones who will benefit or suffer the consequences. They are the ones who can reallocate focus and budget.
Also, instead of being focused on the factory floor, and calling solely at that level, they had to learn to think wider, higher, broader. To do that they needed to understand what was most critical to the organization. We helped them gain the skills to have conversations at the C suite level, so they could tie their solution’s value proposition to their strategic priorities.
And with skills and practice comes confidence in gaining access to and conducting more strategic conversations at the C-suite level. Any other best practices?
A third is to have a good understanding of the competitive landscape. And not just your strengths and the competitor’s weaknesses. Flip the question. What are the competitor’s strengths from the client’s perspective? What are your weaknesses? Do a real, honest assessment of your own weaknesses. Where could the client perceive risk in moving forward with your solution? What are the advantages of the competitor’s solution that you need to counter?
That’s so interesting. Because I find that many sales teams, especially technical sellers, are so enamored with their own products and solutions that they find it difficult to evaluate their potential weaknesses. They need to believe in their offering, of course. But value is only value if the client sees it that way. It may be painful, but there is such benefit in strategically looking at how clients might perceive our weaknesses, given their situation, objectives and motives.
I know when we work together Art, you challenge clients to think about what you called “Non- named” competitors, which often tend to be our greatest competitors. Can you talk a little about that?
Many sales organizations completely miss the whole idea of “Do Nothing” or “Status Quo.” We need to look at these two as actual competitors. As you know, when we work with our clients, we ask them to put these two through the same analysis as their Named competitors – ABC Company, XYZ Inc. If the client perceives that the risk of changing from their current situation is greater than the risk to “Do Nothing”, they will stick with the devil they know and continue to “Do Nothing.”
Art, thank you so much. I know that there are other be practices for identifying, pursuing and winning more desirable opportunities, which we will address in upcoming articles. For now, though, these three critical practices we discussed today, when implemented well, can truly change the game for most sales organizations:
- Understand the organization’s strategic priorities, and help them translate these priorities into opportunities and projects the company decides to bid on and pursue.
- Understand the client organization’s decision-making process, who the key players are along with their priorities.
- Have a good understanding of the competitive landscape, both Named and non-named competitors such as “Do Nothing” and “Status Quo.