Last week, I talked about the importance of Win Loss Analysis. No one questions doing win/loss analysis, in particular, we really worry about losses. There is a hidden performance and resource drain that can have a dramatic impact on our success. It’s the abandoned deal.
Abandoned deals happen more frequently then we think–we usually don’t track them well. But they’re the deals that we’ve qualified and pursue proactively. We may abandon them for many reasons–we lose interest, our customers lose interest in us, we see that we can’t win, or any other reasons. Increasingly, however, I’m seeing the most damaging type of abandoned deals, “No Decision Made.” These are tragic–we invest in the entire sales cycles. We spend our time, we invest resources from our company, we go right to the end and nothing happens.
We don’t win, we don’t get the order–but no one does, so no one loses. The customer just doesn’t make a decision.
There’s another way this happens. We go through the sales cycle and the customer–the functional managers get excited. They select us, then they go to executive management for funding–and the executives choose to invest in a completely unrelated project–something that has nothing to do with the functional group we have been working with. It’s not a competitive loss–it’s just that our project is a lower priority than others they are considering.
I’m seeing an increasing numer of abandoned deals, typically, we don’t pay much attention to them. We analyze our Wins and Losses, but abandoned deals fall off our radar screens. But these deals can be very significant. In the past month, I’ve been invovled analyzing several companies—some capital/equipment companies, a major systems integrator, a few software companies and a few services companies. The lowest rate of abandoned deals was 22%. Most were significantly higher.
Think of that, think of the impact of these levels of abandoned deals–a minimum of 22% of your pipeline has disappeared! Think of the time you’ve invested, think of the emotional investment that you have in the deal. Think if the resources you have invested and the expectations you have raised in your company.
But usually we don’t pay attention to this–we track wins and losses. We just kind of forget about abandoned deals.
What do we do to reduce abandoned deals–I’ll spend more time on this issue in some future blog posts, however, by belief this is largely a qualification problem. We push a customer to look at something, but it doesn’t have a high sense of urgency. At the end of the cycle, they just shrug and decide to do nothing. We avoid this by really looking at the urgency, the consequences of not solving the problem very early in the sales cycle. We check to see if the project is high on the priorities of the executive teams–the people controlling the purse strings.
Don’t just look at wins and losses. Remember abandoned deals are important to track. Understanding those abandoned deals, avoiding them at qualification is important to producing results and managing your time.
There has been an important revolution in marketing thinking over the past years. The move from thinking about campaigns to rich content programs and nurturing is important. It recognizes something important, that customers want to learn, they want to be educated. These programs enable us to develop “relationships” with customers and nurture them up to the point of their deciding they need to take action and start a buying process.
In our nurturing programs, we design them to have the customer take different actions through the program that help us gauge their level of interest, their urgency, and their readiness to buy.
This is important and needs to be the cornerstone of our marketing programs. But there is a problem with this–it requires a customer to have an interest–to want to learn–to want to consider a change, to be thinking about their needs. Not necessarily to do something today, but to be thinking, “perhaps we need to change at some point in the future, I should start learning and looking around now.” In essence, nurturing works best when the customer raises their hand.
But what happens when the customer should be raising their hand, but isn’t? What about the case where the customer is so busy just surviving day to day? What about the customer that isn’t looking to learn, that isn’t thinking about the future, who isn’t thinking about how they might improve their business?
They may never be a part of our nurturing programs because they don’t recognize the need to be nurtured. They may be part of our programs, but they aren’t taking the actions they should be taking—but aren’t.
Pull is an important part of developing the customer need, knowledge and enabling us to enter a buying cycle when decide they need to buy. But I think push is still critical. But it’s push in a very different sense. It’s helping the customer recognize that they need to change. It’s helping them understand they are missing an opportunity. It’s helping them understand that them see new ways of running their business or function.
Sales people must bring ideas to their cusotmers! Sales people must provoke and challenge their customers. Sales people must create the reasons for customers to raise their hands, to say–I need to do something now–entering into a buying process. Alternatively, to say–that’s something I need to start looking into. I might want to do something later.
I get concerned as I start to see the sales pendulum swinging to “pull” oriented sales strategies. I think exclusively relying on pull–which I see many organizations seriously considering is irresponsible. It’s not because we “aren’t” driving our sales growth as aggressively as possible–though that is irresponsible. But it’s really irresponsible because we see that our customers are missing opportunities to grow and improve and we aren’t taking action to help them understand this. It’s irresponsible because our customers often look to their sales people for ideas–to understand things that are happening in their markets, best practices for their functions, how to be more efficient.
We have to help our customers understand new opportunities–if we are truly customer focused, value based, trusted advisors, we need to get them to raise their hands. Our nurturing programs may not do this.
Creating great value for the customer, developing meaningful relationships requires a careful balance of push and pull. They can’t exist by themselves–we can’t have push only strategies, nor can we have pull only strategies. We have to purposefully execute both.
On SOPA And PIPA
I’m taking a bit of a departure from some of the “rules” I have established for myself and this blog. One thing I have avoided is taking political positions, using this blog as a bully pulpit for those types of things—though I use it as a bully pulpit for a lot of other stuff. In this post, I have no intent of taking a political position, but there are some important pieces of legislation that impact virtually every business and organization for which the Web is a part of their strategies. I think it’s important for people to understand these and take an active position with their congress people–regardless your stance.
Many blog sites and web sites are going “dark” today to call people’s attention to the SOPA and PIPA bills. Clearly, this site hasn’t gone dark—but that’s just a comment on my lack of technical capabilities.
I first started seeing the term SOPA coming up in the social media world a couple of months ago. The conversation seemed to have dominance in the technical communities, I initially blew it off thinking it was some great technology. More recently, as I kept seeing more discussion, I decided to look into it.
SOPA stands for Stop Online Piracy Act, or House Bill 3261. It’s related to PIPA, the Protect IP Act. Look at some of the articles on these bills. The spirit of the bills is great, who wants to encourage Piracy or stealing IP. However the implications of the bills and the related enforcement issues are profound. There is an impact to virtually every business — seeking to leverage the web, build online communities and better connect with their customers. It will impact virtually every individual’s web experience.
The responsibilities organizations have in ensuring their sites are in compliance can be overwhelming and will inevitably impact all our experiences on the web. Social Media and Web X.0 strategies are critical to all businesses and organizations, so legislation that can have such a profound impact on our abilities to leverage these is important to understand.
I’ll keep my position to myself, though you might guess my position. But I think every marketer, strategist, and top executives should look at the legislation, understand it’s impact on their strategies. Whatever your position, you should write your congress people making your position known.
I Thought I Had Solved World Hunger
Not long ago, my wife had to be away from home for a week. It happened to be a week that I wasn’t traveling so, I had to fend for myself on meals. The first day, I struggled with what to do. The easy answer was to go to a restaurant. But I spend too much time on the road in restaurants. I considered take out, but that seemed to be a variation on the same theme.
Then I discovered something amazing—and it was less than a half mile from our house. It was this thing called a grocery store. It was an amazing discovery (I’ve led a sheltered life). I walked in and found all my meal and eating problems had been solved! I could get everything I wanted. Imagine that, all the answers to my food and eating problems right there–less than a half mile from my home.
As I’m prone to do, I started thinking of the broader implications of my discovery. Did others know about this? Perhaps so many people are blind to the fact that grocery stores might be just around the corner. Perhaps the solution to world hunger was at hand, I just had to make this visible to the world through my blogging, writing, and speaking! It was so simple….
When I read many of the books, blogs (including my own), or listen to speakers on sales, marketing, leadership and business strategy, sometimes, I think we have just discovered the local grocery store. We do some thoughtful research, but on a very narrow set of premises, discover some patterns, some things that work, then immediately declare, We Have The Answer To Your [fill in the blank] Problems.
It could be a prospecting approach, how we present our elevator pitch, developing our value proposition, winning deal strategies, how to coach, how to lead. It could be about how we measure and compensate our people. It could be new approaches to marketing, or any number of other things……
Sales 2.0 companies and many of the “solutions providers” do the same thing. They have something that helps certain situations, certain parts of the process. These solutions truly provide value but to a certain small set of problems and customers. Too many, however, position themselves as the answer to a sales person’s success or a sales manager’s performance problems.
We all tend to position ourselves as having “the answer,” but after all we are selling something as well.
I was reminded of this the other day by a very thoughtful reader. In my post, Order Taker or Solution Creator, a very bright commenter wrote, “but Dave, sometimes all a customer wants is to know features and functions and to place an order. When they want that, I’ll be an order taker. Sometimes they want to be challenged, when they want to be challenged, I’ll challenge them.”
Sales, marketing, and business is complicated. There are no simple answers or miracle cures. There is no right or wrong way. There are lots of bright people who have great ideas, tools, approaches. Things worthy of reading, understanding, applying. Some solutions and approaches help some of us — for example, I tend to write a lot about complex selling situations, so hopefully, my advice and experience is valuable to those involved in those situations. But it’s probably not very useful to those who are involved in transactional sales situations.
What I learned from Natalie’s comment is that great performers are truly adaptable. They learn lots of different approaches. They are skeptical, they know “one size does not fit all.” They don’t blindly drink the latest batch of Kool Aid, regardless of how popular it may seem. They know there are no miracle cures or get rich quick solutions.
Great performers are constantly reading, learning, evaluating, and adopting. They take a great idea, combine it with other great ideas, and execute what’s appropriate for the situation they are involved in. For another situation, they do something else, leveraging other ideas that are more appropriate.
There are lots of great books, bloggers, speakers. There are great tools and great ideas. The variety of ideas and approaches, in fact, inform us there is no single path or approach to success, but there are many different ways. Great performers look at, study and understand all of these. They continue to learn, they continue to to explore. Most importantly, they adapt approaches that are appropriate for the situation.
Be skeptical. Don’t look for silver bullets. Don’t accept someone’s cure for every problem you have. Collect lots of approaches, tweak them and own them for yourselves. Think about each situation and use whatever is most appropriate for the situation. Realize there is not just one path to a solution, but there are different paths–choose the one that works best for you.
Hold me, and people like me accountable. When we start talking about the miracle cure, push back. Make sure you understand the specific circumstances where it works. Make sure you understand the limitations. We’ll all grow, learn, and improve our effectiveness.
