Controlling The Sale

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I just came back from a commercial strategy meeting with a customer and one of the areas they had been struggling with is poor sales conversion ratios. It turns out that the company is putting in a lot of upfront design work in order to be able to provide a price and proposal only to find out that its “too expensive”.

There had been discussions about price being the main reason that sales were being lost but I had a feeling that it was down to a lack of qualification as their service was high quality and solved a problem that other suppliers in the market could not do as well (value driven, not a commodity).

After probing around into a few deals it soon became obvious that there was both an immediate and clear difference along with more subtle differences between the types of customers that had bought and those that had not.

This meant we should be able to tell quickly if;

a) they were an ideal customer

b) they HAD to buy something to solve their problem from somebody, either them or a competitor.

c) they would be the better choice

We had already begun to put in place some qualification criteria to enable us to build supporting facts which would give us an indication of the likelihood of a sale happening, but what was really needed were a few simple questions to determine quickly if this new prospect was an ideal customer or not.

By simply asking 4 questions in 5 minutes we were able to determine a reasonable probability of winning some profitable business and what priority that project may have in the sales funnel.

Where there are grey areas detailed qualification questioning and research would provide the answer using the MMEDDICC sales system.

The upshot is, this client is now reducing the upfront work they have been doing for each project, meaning they have more time for better and more profitable deals, more marketing to get more profitable deals and time for innovation. Better qualification also leads to more accurate forecasting which in turn results in better financial control.

There is more to do, but they are finally realising that price is not the real problem, its was spending time with the wrong people and not enough time with the right people.

While I was thinking about this post I came across the Investment Bankers sketch from Monty Python and realised that this was both timely and a good example of how somebody refused to give something without getting something in return (if not from a much greedier motive) . Good business should be a balance of give and take, but when the balance is all one sided, somebody is going to lose either a sale, or a customer will get a poor deal.