The Magical Shrinking Order
Week 1: "Yes, boss, the ACME order will definitely be a big one. Very likely my largest for the year!!"
Week 2: "Yes, boss, ACME is still on target. They need one of everything we have, and two of the core item. I have thrown the kitchen sink at them. It's a doozy. Drinks all around when this one comes in!"
Week 3: "ACME is still trucking along. They are having some budget issues, so we took out the kitchen sink, but it is still going to be good."
Week 4: "Yep, ACME will buy next month. They want to spread this over the next three quarters. They felt they just could not project manage all of it at once."
Week 5: "OK, boss, we are down to the wire. They have asked for a final proposal detailing the different price levels they could buy at, so I have done a simple quote for just one of the core, a quote with some of the services, and a third option where they can get most of what we were talking about last month."
Week 6: "Well, we got the order. They took option 1 (the smallest possible purchase) and promise to come back for the rest later in the year."
Does this sound familiar?
What happened?
Do you find your opportunities gradually shrinking over time with the prospect invariably ending up at the smallest possible order size? And when they do this, is it really the best solution for them?
If the smallest option really is the best solution for them, then our conversation today is over (and I will slap you upside the head later behind closed doors for over-proposing and for messing up our forecast). But all too often, the salesperson has the image of the right solution for the prospect and ends up not selling that solution. Usually far less. There are two different actions that lead to this end. One is apparent, the other is not.
The Apparent Problem: Are you an order taker or a salesperson? If you are a trusted salesperson, operating in a consultative manner, then be a consultant. What that means is that you are the knowledge holder, the one with the answers. When you make a proposal, propose only that ONE solution that is best for the prospect. There are no OPTIONS. The only option is to solve the problem or not, and your proposal should be the ONE that solves the problem.
The Hidden Problem: This really is the source of the issue and causes the apparent problem to happen. It all starts when the salesperson is not really doing a needs analysis at the beginning of the process and as a result does not really have an opportunity to paint a value-based picture for the prospect of what the solution will do for them. Let me explain...
A salesperson who is well trained, from the point of view that they know everything about their offering, is often not patient enough to help the prospect catch up in their buying process. The salesperson is often seeing the solution even before they start talking to the prospect. And of course, SPIFFs and other incentives just get an inexperienced salesperson to focus on elements of the solution for reasons other than the prospect's. The salesperson does their initial homework on the prospect, kind of understands what their situation is, and in their own mind they apply the "perfect" solution.
And then they talk to the prospect. And talk and talk and talk. Never asking, never discussing, and certainly not working with the prospect to build the solution. Why should they? They (the salesperson) have built it in their own mind already. The prospect is just extraneous to the exercise...
What never comes out in all of this talk is WHY the solution is the best and HOW it is going to make a positive difference for the prospect. This part of the conversation can only happen when the true consultative questioning has happened at the beginning of the sale. Because the why and how parts of the discussion only make sense when they are put in relation to the goals/challenges/pains of the customer. If that has not been developed, then why and how are academic discussions only (if they even happen).
So if the salesperson is doing so much talking, what are they talking about? Features. Functions. Colors. Widgets. Options. Mips and bips. All the stuff you find on a brochure or a simple web page.
So what value is that salesperson generating? None. You might as well just mail out the brochures or aim people at your website.
How is this problem fixed? Well, if it is actively happening in an opportunity that is underway, it is pretty hard to fix a sale already in progress. You have to bring the customer to a grinding halt (probably easier than you expect because if this problem exists, your customer probably does not feel like they are going anywhere, so stopping is really easy). And go back to the beginning. Engage the customer in a needs analysis discussion and get out on the table their goals/challenges/pains. See a longer discussion in LinkedIn group "Sales Playbook!" http://tinyurl.com/dekbqb where I discuss a situation where we had to do this.
But if it is a chronic situation for you or one of your team members, then get a process going that enforces needs development and questioning very early in the process. See another very involved discussion in LinkedIn Group "Salesblogcast.com" http://tinyurl.com/dgpnb7 about questioning. The trap that newer salespeople fall into is that they think that they should have the answers, when in fact the prospect needs to hear for themselves that they themselves have the answers. Therefore, ask the questions that get the prospect to sell themselves a solution and then what you do is prove that you have the solution they just designed for themselves.
Sounds too good to be true? This posting has become too long to explain more on why this works, but check out "SPIN Selling" and "CustomerCentric Selling" for a much longer explanation. And of course I will cover this more in future postings.
Homework for today: Look at your past year of selling, and tabulate how many of your opportunities ended up as a smaller deal than you originally forecasted, or you originally expected them to close at. What would your commissions have been if every single one of them closed at the larger value? What are you going to do to earn that higher commission this year?
Week 2: "Yes, boss, ACME is still on target. They need one of everything we have, and two of the core item. I have thrown the kitchen sink at them. It's a doozy. Drinks all around when this one comes in!"
Week 3: "ACME is still trucking along. They are having some budget issues, so we took out the kitchen sink, but it is still going to be good."
Week 4: "Yep, ACME will buy next month. They want to spread this over the next three quarters. They felt they just could not project manage all of it at once."
Week 5: "OK, boss, we are down to the wire. They have asked for a final proposal detailing the different price levels they could buy at, so I have done a simple quote for just one of the core, a quote with some of the services, and a third option where they can get most of what we were talking about last month."
Week 6: "Well, we got the order. They took option 1 (the smallest possible purchase) and promise to come back for the rest later in the year."
Does this sound familiar?
What happened?
Do you find your opportunities gradually shrinking over time with the prospect invariably ending up at the smallest possible order size? And when they do this, is it really the best solution for them?
If the smallest option really is the best solution for them, then our conversation today is over (and I will slap you upside the head later behind closed doors for over-proposing and for messing up our forecast). But all too often, the salesperson has the image of the right solution for the prospect and ends up not selling that solution. Usually far less. There are two different actions that lead to this end. One is apparent, the other is not.
The Apparent Problem: Are you an order taker or a salesperson? If you are a trusted salesperson, operating in a consultative manner, then be a consultant. What that means is that you are the knowledge holder, the one with the answers. When you make a proposal, propose only that ONE solution that is best for the prospect. There are no OPTIONS. The only option is to solve the problem or not, and your proposal should be the ONE that solves the problem.
The Hidden Problem: This really is the source of the issue and causes the apparent problem to happen. It all starts when the salesperson is not really doing a needs analysis at the beginning of the process and as a result does not really have an opportunity to paint a value-based picture for the prospect of what the solution will do for them. Let me explain...
A salesperson who is well trained, from the point of view that they know everything about their offering, is often not patient enough to help the prospect catch up in their buying process. The salesperson is often seeing the solution even before they start talking to the prospect. And of course, SPIFFs and other incentives just get an inexperienced salesperson to focus on elements of the solution for reasons other than the prospect's. The salesperson does their initial homework on the prospect, kind of understands what their situation is, and in their own mind they apply the "perfect" solution.
And then they talk to the prospect. And talk and talk and talk. Never asking, never discussing, and certainly not working with the prospect to build the solution. Why should they? They (the salesperson) have built it in their own mind already. The prospect is just extraneous to the exercise...
What never comes out in all of this talk is WHY the solution is the best and HOW it is going to make a positive difference for the prospect. This part of the conversation can only happen when the true consultative questioning has happened at the beginning of the sale. Because the why and how parts of the discussion only make sense when they are put in relation to the goals/challenges/pains of the customer. If that has not been developed, then why and how are academic discussions only (if they even happen).
So if the salesperson is doing so much talking, what are they talking about? Features. Functions. Colors. Widgets. Options. Mips and bips. All the stuff you find on a brochure or a simple web page.
So what value is that salesperson generating? None. You might as well just mail out the brochures or aim people at your website.
How is this problem fixed? Well, if it is actively happening in an opportunity that is underway, it is pretty hard to fix a sale already in progress. You have to bring the customer to a grinding halt (probably easier than you expect because if this problem exists, your customer probably does not feel like they are going anywhere, so stopping is really easy). And go back to the beginning. Engage the customer in a needs analysis discussion and get out on the table their goals/challenges/pains. See a longer discussion in LinkedIn group "Sales Playbook!" http://tinyurl.com/dekbqb where I discuss a situation where we had to do this.
But if it is a chronic situation for you or one of your team members, then get a process going that enforces needs development and questioning very early in the process. See another very involved discussion in LinkedIn Group "Salesblogcast.com" http://tinyurl.com/dgpnb7 about questioning. The trap that newer salespeople fall into is that they think that they should have the answers, when in fact the prospect needs to hear for themselves that they themselves have the answers. Therefore, ask the questions that get the prospect to sell themselves a solution and then what you do is prove that you have the solution they just designed for themselves.
Sounds too good to be true? This posting has become too long to explain more on why this works, but check out "SPIN Selling" and "CustomerCentric Selling" for a much longer explanation. And of course I will cover this more in future postings.
Homework for today: Look at your past year of selling, and tabulate how many of your opportunities ended up as a smaller deal than you originally forecasted, or you originally expected them to close at. What would your commissions have been if every single one of them closed at the larger value? What are you going to do to earn that higher commission this year?
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