News : iSpeak

by Russ Peterson

"One who asks a question is a fool for five minutes; one who does not ask a question remains a fool forever.” - Chinese Proverb

What is the only thing worse than chasing bad business? Catching it! In today's tough sales environment, your time is your greatest asset. Investing your time pursuing business that will never close is a disservice to you and your company. It is a slippery slope that will lead to lower commissions, unfulfilled quotas and eventually…a new business card. I have seen too many sales people maintain opportunities on their forecasts and pipelines that seem to always be just out of reach or they end up being awarded to a competitor. Many are opportunities that should have never been pursued in the first place. The salesperson will tell their manager "I don't know how we could have lost that one!" The additional company resources, such as Subject Matter Experts (SMEs), that you engage are now wasting their time as well. While you have them engaged in "show and tell" presentations with the potential customer, your competitors are closing deals with legitimate prospects.

Qualify Before You Pursue

Resolving this time management issue is done through proper qualification techniques before you begin the pursuit. Qualifying a prospect as a legitimate sales opportunity before you engage yourself or others from your organization is the only way to properly attain your sales objectives in the amount of selling time you have every month. There are only two reasons why a sales opportunity should be qualified out:

The business is not "win-able"
The business is not worth winning

Why would you pursue something that you can't possibly win? I could pursue the starting quarterback position for the Houston Texans but the likelihood of me winning that position is microscopic, at best. Even if I had the talent and skills to compete for that job, their current quarterback is already under a long term contract. Right out of the gate, I'm not positioned well to win that business. If I chose to pursue that position anyway, I would expend tremendous amounts of time and effort trying to accomplish that goal. In the end, I have wasted hours on a project that I never had a chance of winning in the first place. And what would my opportunity cost be? What did I give up along the way as I was pursuing this goal that I never had a legitimate chance to win? I'll let you use your imagination. Think back on an opportunity that you pursued only to find out that the winner had already been chosen before the race even started. How many good sales leads did you give up because your head was so far down in the weeds on an opportunity that had absolutely no chance to succeed?

Why do we chase bad business? From what I've seen there are two reasons why a salesperson will continue to pursue an opportunity that has little or no chance of actually closing:

The salesperson is way behind quota and is hoping for a miracle
The salesperson doesn't even realize they've already been awarded the consolation prize before the beauty contest ever started

How do you avoid the situation described in reason number one? That's easy, never be way behind quota. This article would be quite a bit longer if we tried to tackle all of that right now. What I can do is give you additional time in your selling day by limiting your pursuits to those opportunities that have a higher chance of succeeding. Let's look at reason number two for pursuing bad business. That will beg the question, "How do I know if the deal is worth pursuing? How do I know if this is bad business?" I'm glad you asked!

Qualifying 101

Qualifying your opportunities begins with proper questioning techniques. There are some basic questions that you should get answered as soon as possible. The feedback that you gain from the customer will let you know how well you are currently positioned. If you have an edge on the competition, that's great. If you are on a level playing field, that can also be good. What you want to avoid is a situation where, from the beginning, there is a bias towards your competition. If there is, you have a much steeper hill to climb and you should consider not pursuing this opportunity.

Below are some basic questions that you should get answered for every opportunity that comes your way. After gaining the proper feedback, you can determine whether or not the business is worth pursuing.

Question

Good

Bad

How did you find out about this opportunity?

You were introduced to the prospect through a mutual acquaintance that thought the two of you should talk.

You received an RFP that you didn’t know was coming.

Is there an incumbent (competitor)? Who is it?

Are they happy with the incumbent?

Why are they looking to change?

Yes, and it’s you.

No, there is not an incumbent.

Yes, there is an incumbent but their service is suffering and it is hurting their business.

Yes, there is an incumbent and it’s not you.

No, there is not an incumbent, but they have already engaged with a competitor to develop a solution, now they are just getting competitive bids for the pricing negotiations.

Who are you dealing with?

Director, VP or “C” level Executive that will be making the decision (signing the contract)

A purchasing representative

A technical manager that will not be signing your contract.

Does the prospect have any history with using your firm’s product or services?

Yes, and the experience was acceptable to great.

Yes, and the experience was absolutely rotten.

No, the prospect has no history with your firm

Is there a gripping event that is driving their search for a solution?

Yes, and there is a hard date that the product or service must be in place.

There is no date that you can determine. Their timeline is answered with their statement that they are looking to change vendors.

Is the business even worth winning?

Yes, the customer is reputable, a quality logo, and not a credit risk.

No. The customer is known for negotiating margins down to nothing, being extremely difficult to work with, or is a credit risk.

And probably most important…

Does your product or service fit their need, based on your diagnosis?

Yes, your product or service would help them solve a problem or issue.

Not really. It could be made to work, but it is really too much/little for what they actually need.

It is always hard for a salesperson to receive a lead and then not pursue it. Why? Because it's in our DNA. This is what we do. We're salespeople. We pursue opportunities. We close business. It is extremely difficult to tell a salesperson not to chase business. But, we need the logical side of our brain to call out, "Easy, big fella!" before any pursuit begins. It is in your best interest to qualify before you proceed.

If there is even the slightest chance of winning, why wouldn't you give it your best shot? I can answer that for you; because, if you are not positioned well to win, you should invest your precious time where you are positioned well. Let some other salesperson waste their time chasing rabbits. You have better things to do with your time!