Time is money, and chasing lost causes can cost a small company dearly. Phil Rothwell gives some tips on breaking free of dead-end prospects.
Once of the biggest challenges I have faced in my career has been spotting the right time to walk away from a deal. I am sure I’m not alone.
When you work in sales, you quickly become programmed to identify opportunities, press home advantages and make the best possible case. Being optimistic is often the only way to stay sane and avoid the axe, so it’s easy to end up chasing lost causes and indulging time-wasters – especially when you are finding success is hard to come by.
So when do you walk away? Here are some pointers that can save you wasting your time:
Are they right for you?
The great thing about living in a civilised country is that a lot of information is on the public record. This includes everything from the ownership of companies to the personal details of the board of directors and even financial information. When selling to small businesses, this allows you to quickly identify whether you are talking to the right people and, if you are, whether they can afford to do business with you.
Employees in larger companies rarely feature in Companies House data, but they often like to promote themselves on LinkedIn, which can be a great aid when trying to piece together organisational structures. It can feel a bit like stalking, but if your intent is to do right by the customer, then there is no harm done.
Are you right for them?
It is all very well finding out if customers are ugly and hairy enough to buy from you. The other question you need to ask is whether you are a credible supplier. It is not that hard, to be honest – if the deal is worth a million and your turnover is £500,000 you can forget it. Think of it this way, if you failed to deliver, would the buyer be blamed for making a stupid choice, or would you be blamed for not delivering? If the answer is the former, then you are unlikely to win.
Be upfront about potential costs
I know this is contentious and providing numbers too early in the sales process can be disastrous. However, providing an early indication of costs is sometimes a necessity. When this is the case providing an estimate of the likely price range can be a useful way to smoke out duds without committing yourself to specific pricing. Saying that solutions typically cost between x and y is a good way of setting expectations without painting yourself into a corner. Be careful to ensure you have identified all the requirements before you do though.
Identify where the customer is in their buying process
I use a simple four-stage process to identify where customers are in the buying cycle.
1. They are interested but haven’t formed an intention to buy.
2. They intend to buy something.
3. They have received a proposal and are comparing options.
4. They have made a decision.
They can also be ’resistant’, which means being hostile to the concept, or ’distracted’ which simply means that they have moved onto something else.
I appreciate it is subjective, but this approach provides a good way of turning a pipeline report into a forecast. That is because it is relatively easy to calculate, based on historical data, the proportion of people at each stage who are likely to buy. Using these percentages, you can generate a pipeline figure that has some credibility. For reference, I never say a deal is more than 50 per cent likely to close until I have verbal confirmation.
Possibly the most difficult thing of all is to be realistic. The politics in some businesses are so corrupting that honesty can come with a hefty price tag. To put it in a nutshell, some managers don’t like to hear bad news and would rather shoot messengers than hear messages. To avoid their barbs it is better to identify duds early using these basic analytical techniques. If your boss wants you to persevere, then he or she will tell you. If things work out they can take the credit, if they don’t they can take the blame.
Finally, don’t be afraid of saying ‘no’. It is bad to get into the mind set of feeling that all customers need to be accommodated in some way, they don’t. Good deals work for both parties and there is nothing rude about politely informing people that you can’t help them. It’s also better than wasting their time by indulging them. I try to be friendly and helpful and point them in a more appropriate direction if I can, but ‘no’ always means ‘no’.