Latest "Managing the Hunt" Posts
Strategy is often directly influenced by whom the enemy is.
Pricing is influenced, of course. Also, your approach to the deal is impacted, as well as whether you even continue the pursuit.
However, because of governance rules, procurement guidelines and the jerk-nature of some smug buyers it is getting harder and harder to know who your competitors are.
I was recently sent an email on this very topic just last week, and here is what I told him:
Thanks for your email- It’s really hard to get a list of competitors from prospects – often times because of governance requirements in their process. However, you can triangulate sometimes using these questions (that your prospects may still not answer, but you have a better shot with these than without them):
* How did you generate the list of candidates for this project/contract?
* What were the top 3-5 characteristics that you used to qualify the list?
* Have you worked in the past with any of the companies you are considering? Are you working with any of them now?
These questions, if answered, give you a lot of insight, not just into the competitors, but to the buyers as well.
Let me know your best ideas by posting up here so everyone can share the best practices.
Why is it that the least important person in a presentation can hijack the entire meeting? You have been in these sessions when you are in full presentation and a person in the meeting starts the “challenging question” interrogation. It can sound like this-
- “Don’t you think that your approach costs too much for a company our size?”
- “How do you expect to integrate with our proprietary system if you have never worked with it before?”
- “What real and direct background do you have working in our industry?”
You’ve heard your own examples, I’m sure. Regardless of the challenge, it often comes in the form of a challenging question, it happens before you have had a chance to complete your presentation and it could de-rail the entire conversation. These are pivotal points and if you handle them the wrong way you can burn through precious minutes in your allotted time, look defensive and weakened in the presentation or get trapped into elevating a trivial point into a major issue.
Here are a few strategies to deal with this:
- Defer – The easiest one is to defer answering the challenge until the end of the presentation by saying, “That’s a good question, I believe we address some of what you are asking in the balance of this presentation. I’ll make certain to circle back with you at the end of the presentation to make certain we address anything left unanswered.”
- Isolate – If you have a persistent provocateur, I encourage a different approach.
I recently received an email question from a reader-
“What happens if you do not deliver as promised? Has that happened to you? If so, how did you deal with that situation?”
This happens to all of us. Every company falls short of its promise at some point.
As to my current business, we have fallen short a few times. In one occasion, I met with the president of the company we were working with. Honestly, his organization had a share in the failure of the program, but that was not important.
Together, we were not being successful.
At the beginning of the meeting I handed him a check for all of the fees that he had paid so far. I said, “Let’s start on even ground, here’s your money back. This doesn’t cover your investment of time and effort, but it does return your fees. Now, let’s figure out if there is a way for us to go forward or not, but I don’t want the money to be the question, it’s yours back if you decide you don’t want to go forward after we have spoken. If this is all you wanted from our meeting, then it is yours with my gratitude for giving us the chance to work with you and for what my company has learned through this.”
Taking the money out of the equation changed the conversation entirely. We worked through the issues, re-set mutual expectations and decided to keep working together. He gave me the check back.
“Congratulations, You’re My 11th Biggest Customer”
What’s it like to be someone’s “11th Biggest Customer”?
In the constant sales competition with bigger companies for bigger deals, at some point, if you are smaller, your size is going to become an issue. This can be in an obvious way or in a subtle way- even unstated. However, if you are competing with a company who is much bigger than you are, often that competitor looks like a safer bet than you. You have to turn their size against them- and that’s not easy, it takes a little magic.
Here is the magic trick -
Ask your prospect, “Who is your 11th biggest customer for your company?” As they fumble through the list in their mind, drop in this second question, “What’s it like to be somebody’s 11th biggest customer?”
You’ve set up the conversation about size, trust and promises. Be careful, it would be easy to swing on the point with an eight-pound sledgehammer when just a finishing hammer is necessary. Here’s how the rest of the conversation should go -
You: “Being out of the top 10 shows up in a lot of ways in a business relationship- not always up front, but over time, the bigger clients always get the first attention in any of our businesses. I would encourage you to ask anyone you are considering for this project/program/purchase/partnership where you will fall in the order of size of their clients. Just for reference, you will be my 3rd biggest customer, (fill in the blank with the correct number in the top 10 for your company or your personal book of business).”
It’s simple – we all know that being 11th sucks.
When I was a kid, my dad would take each of the kids for one week each summer on the road with him as he was doing his sales trips. My dad was a territory sales rep in Iowa, Nebraska and Kansas. We would ride with him, talk on the CB radio to find out where “smokies” were, (I have already dated myself in a rather sad way), keep track of his appointment book, pull samples for his meetings and so on. We’d get chocolate shakes for lunch and go see movies at the movie theaters in the little towns we’d stay in at night. More often than not, he’d take us in the appointment and get to watch him sell and work with customers. I learned an amazing amount. Like most things you learn when you are a kid, I didn’t have any appreciation for what I was learning until I was much older.
One of the things he taught me was that success in sales is 90% process and 10% magic. “If you work your process, you earn the right to do your magic.” I heard that a thousand times. Nutty thing to say then, now I understand he was brilliant. The point is even more valid when it comes to sales management. Sales management is about process. Process, when done correctly, is boring. The 90% of the time that a sales manager spends on process creates the opportunity for him or her to be magical the 10% when sales leadership is necessary.
No matter what else we’re talking about in seminars, workshops and coaching sessions, I’m always asked the same question: How do I deal with price resistance?
My answer is easy when price is the only issue. Present the buyer with the lowest price option and win the deal.
A lot of the time, however, price is not the only issue and it’s merely being used as a smoke screen. You are getting price pressure for a lot of the usual suspects that you already know—the buyer believes that they should push for lower price, uncreative people want more for less and so on.
I want to challenge you to think of price in a different way. If you are not offering a commodity, price is a byproduct of other issues. You must be clear on these issues with the prospect or client so you can get control of the price discussion.
- Price is relative to business problems. If you are selling in the iron-triangle of Service, Quality and Price, then you are not selling value that solves business problems. You are selling into a comparative matrix that boxes you into a same:same measurement with our competitors. When you solve business problems – Time, Money and Risk—then you are in a very different dialogue. An example of this comes from one of my clients. They sell programming services on a particular operating system. This typically means that they are being compared on a bid with other vendors by how many hours it takes to complete the job and what the hourly rate is.
Here’s the final round of how you can get someone to spend their political capital for your purposes.
- Make it important to them. Big P.C. comes from doing something important. You have to connect to their biggest business problems and demonstrate how your relationship aligns to those, or you will not get any real P.C. spend—you’ll just get lip service. The results have to be measureable and they have to happen quickly.
- Big ROI. This is key. You have to show a very big ROI in one of two ways: either a huge multiple on a big investment or a huge multiple on a small one. Executive Sponsors must perceive a relatively small expenditure of P.C. to get a big win. To do this, you are going to be very specific in your requests. a. “I need for you to make this introduction on my behalf.” b. “I’ll need your direct support in getting that information from that department.” c. “I’m concerned that the person we need for this effort does not feel the sense of urgency that we do. Will you assist me in moving this up her priority list?” These things are all small P.C. expenditures for the Executive Sponsor, but are big in terms of value to us (the little guy). By being tactical and specific in your requests, you have helped them to calculate what the potential P.C. expenditure. The request is contained and manageable, so you have a higher likelihood of getting that sponsorship.
- Make them important in the process.
It wasn’t enough.
The last time I wrote about Executive Sponsorship, people loved it but wanted more. How to get more sponsorship, earlier sponsorship and greater commitment.
Let’s start with the idea of Political Capital
In a big company, there is an unaccounted for currency called Political Capital. That term stands for the sum of the positional authority, favors, charisma, recognized successes, perceived favoritism from higher-ups and “fair-haired” status that a person has in a company. Now, this is real “coin of the realm” stuff and it is exchanged in a very subtle way for all sorts of purposes, including:
- Moving priorities around. Say, getting your IT project done before someone else gets theirs done.
- Quashing prying eyes. For example, your people screwed up a quarterly report and you want it re-run on the down low rather than having someone making the mistake a big deal.
- Getting promotions. These can be for that person, for a subordinate, a peer or a friend.
- Getting preferential treatment. Travel vouchers, seating at the company banquet, office supplies and so on.
- Making things happen. Little or big, when an executive wants to make things happen, he or she is using political capital to do it. The less organizational chart influence they have, like telling a direct subordinate what to do, the more political capital it takes to get things done. Don’t be confused though. Even getting a direct subordinate to do something takes political capital.
In the end, it’s for influencing people in an organization in order to give/get a person his or her way.
I was gambling in Havana
I took a little risk
Send lawyers, guns and money
Dad, get me out of this
- from “Lawyers, Guns and Money” by Warren Zevon
When is it time for the heavy artillery in the sales process? When do you bring in the CXOs and how do you use them?
I have found that companies typically use CXOs too infrequently in the sales process, not too frequently (or not frequently enough). Regardless of frequency, though, there should be some guidelines as to how to best use your CXOs in the sales process. Let’s focus specifically on the CEO and the CFO positions for the sake of this post. Using their clout correctly can improve your sales processes and your yield on big deals.
The Do List
A CEO’s greatest power in the sales pitch is in conveying the following:
- Cultural alignment. The CEO’s role in the conversation is to communicate that our organization and their organization have similar vision, mission and values. That our people and their people can work together well and that we can smooth out any of the natural bumps in a relationship. This communication occurs between your CEO and their highest level people in the sales process.
- Financial and organizational commitment. The CEO has to be the one who communicates the company’s financial position. Where it stands, its history and what the financial future of the company looks like. This is not so much of a discussion of the balance sheet as it is a discussion of the underpinnings of the business and its plan for the future.
In the military academies, seniors preparing for their oral exams use two key processes for preparation and improvement called Murder Board and Hot Washes. These processes will increase your sales effectiveness by huge multiples if you include them in your sales process.
Murder Board. The Murder Board is a committee of selected peers and teachers who prepare a student for oral exams by posing anticipated questions to the student and then provide critique of the answers. This same process is now used by politicians who are preparing for debates and I hope you will use it for preparing for key presentations.
To get the full value of this process, you need a few things:
- Really smart people. This means that you are going to use people who are knowledgeable about your own business, your industry, your competitors and the prospect.
- Enough time. The Murder Board process will take twice as long as the presentation itself, and then some. To be successful, you will need to go through the presentation from start to finish without sidebar interruptions. Then there is the aggressive Q & A from your Murder Board that is designed to challenge you and help you shape your presentation as well as your answers.
- Your full pitch team. You need to have the people who are going to be doing the pitch, all of them. I have seen the absence of just one person during the Murder Board then create a dynamic in the presentation that was damaging.
You are doing this process with the intention to sharpen yourself and your team up to your razor level to deliver a fantastic presentation.