Shocked By A Customer’s Decision? Are You Having Unpleasant Surprises Because You’re Failing to Influence Customer Executives?

Don Linder

Have you ever lost a major contract after having been assured by the customer contacts who would be using your product and by their technical evaluators that you were going to win the contract?

A real life story (with the names changed of course):

Paula Gardner’s sales team decided to pursue a very large Information Technology services contract from an oil company that we’ll call SynOil. Paula and her team met frequently with SynOil’s engineering department to understand in depth what they needed from a new IT service. SynOil’s IT department got involved as well to ensure technology compliance. Then SynOil’s purchasing department issued a Request For Proposal. Weeks of time responding to the RFP were followed by more weeks of preparing and demonstrating a prototype of the new service to SynOil.

Finally, SynOil told Paula that they had selected her company for the contract subject to approval by their executive committee . Then came the bad news. “Our executive committee believes that there are other projects that are more important right now.”

Do you hear statements like these from your customer contacts after investing a lot of effort in an attempt to win a major contract?

  • Our executives didn’t like the cost justification
  • We’ve got more critical problems to solve
  • Our executives decided on a more strategic solution
  • Our present supplier can supplement their product to solve this problem

What’s happening here?

Are your customer contacts actually lying to you when they assure you that you’re going to win? In reality, it’s more likely that they neither understood how the decision would be made in their own organization nor that there were decision criteria beyond their scope. Of course, your own “optimistic hearing” (retaining the positive parts of the conversation and ignoring or not exploring the negative parts that you hear) might be your problem.

Are the champions of other projects influencing the business unit executives regarding what projects are the most important? Are your direct competitors influencing the business unit executives regarding the best solutions? With your competitors’ sales teams becoming more sophisticated it’s very likely both of these influences are happening.

 

The Changing Buying Process

Most sales teams have been very comfortable selling to customers by focusing on potential users (demonstrate the product to them!) and technical evaluators (explain the inner working of your product!).

Today, however, ignoring the customer's business unit executives who not only make the final decision on whether the project goes ahead but also approve who will be the supplier is almost certain to be a fatal error.

Marketplace changes that have created the need to engage with executives include the following:

(a) Customers have moved budget approvals and decision making to higher management levels for a variety of reasons including a desire to reduce the number of suppliers that they deal with.

(b) Your competitors (especially the larger ones) have adopted a much more sophisticated approach to how they sell to customers.

 

Changing Your Sales Approach

In our discussions with many sales teams, the biggest concerns they express relative to engaging with their customer’s business unit executives are 1. Not knowing how to have a business conversation with an executive and 2. Being afraid of upsetting their existing customer contacts.

(1) “We aren't confident we can have a productive meeting with them. If the executives aren’t interested in a demonstration or in hearing about technical features, what are they interested in?”

The customer’s business unit executives are interested in discussing how you can help solve, with a low risk solution, significant challenges they have. To be effective in this discussion, you need to change from a comfortable role (telling people about your product and demonstrating it) to an uncomfortable role (discussing your customer’s business challenges), which is always a difficult challenge.

Your first step is learning about your customer’s business and the industry they’re in. Good sources of information include:

  • Published information on publicly traded companies
  • Industry reports from companies like First Research and others
  • Industry journals
  • Consultants & retired executives who have worked in the industry

Here are a few facts you should know about your customer:

The most significant problem in my customer’s industry is ________

The trend of my customer’s market share has been __________

My customer’s strategy is:

  1. To be the lowest cost supplier
  2. Differentiation due to product superiority
  3. Focus on a market niche

Once you know a lot about your customer’s business, you then need to create a chain of intelligent questions to ask the customer about their business. By first clearly defining the problems that your product solves, you can create questions to ask the executives to determine how frequent and how severe are those problems to the customer. Go beyond the initial symptoms to determine just how big the problem is and how valuable is the solution. It’s vitally important to learn to ask about the “consequences” of problems.

Let’s look at an example of how “consequences” can build up the value of a specific strength of your product offering. If you’re offering support for computer problems and your firm has some tools which will shorten the time to resolve computer problems for your customers the first level of problem resolved is reducing unproductive staff time. But what are the “consequences” of unproductive staff time? Does the customer have to pay staff overtime hours? Or does less work get done? If the customer is billing its customers for staff time, what’s the value of lost billable hours?

An additional benefit of “consequences” questions increasing the value of your solution is an increase in the customer’s urgency to solve the problem.

(2) “Our present contacts have told us that they will make the supplier decision. They'll be very upset if we contact their executives.”

This situation is, of course, the classic challenge for a sales team. You sense that the sales campaign isn’t going well. You need to move up in the customer’s organization but how can you make the move without turning your contact into an enemy?

This dilemma can be avoided by engaging with their business executives very early in the campaign before a formal project is defined. Interestingly, this early period is when their executives are the most receptive to meeting with suppliers. But they’re only interested if you can discuss their business challenges rather than your product. It’s surprisingly easy to get a first meeting with a customer executive. However, it’s usually impossible to get a second meeting with the customer executive if you make the critical mistake of trying to sell your product in that first meeting.

If, however, in midst of an ongoing sales campaign you need to move up from your existing contacts, the best approach is to have your top executives engage with the customer’s executives while you maintain an open, ongoing relationship with your present contacts. Be sure to keep your contacts informed of your executives progress with their executives.

 

Key learnings:

  1. Engaging in meaningful business discussions with your customer's business executives has become a vital need. Failing to become proficient will lose major sales that you could win.
  2. Selling only to the potential users of your product and the technical evaluators is a critical mistake.
  3. You must learn a great deal about your customer’s business and their industry to provide value to your customer.
  4. Understanding the “consequences” of problems that you can solve both enhances the value of your solution and the customer’s urgency to solve the problem.
  5. Engaging early in the buying process with the customer’s executives is much easier than trying to move up later in the process.

 

About the author

Don Linder, the founder of Major Client Selling, uses structured tools and creative strategies to solve the complex puzzle of selling to big customers. He's the author of "The Seven Deadly Mistakes that Cause You to Lose Large Sales." You can reach Don at don_linder@majorclients.com.

 

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