Last year, I lost a 7-figure deal to a competitor. When I asked the prospect why they went with the other vendor, they stated ‘because they offered the same as you for a better price’.
Ever since, I have spent time seeking to learn what I could have done differently and below, I share these findings:
Early in the sales cycle, I sought to define this prospect’s decision making criteria. They informed me that in order of preference, cost was the most important factor, followed by quality of service. I found myself conflicted by the fact that the prospect had a significant focus on cost alone with little consideration for many of the value-added benefits of our proposition.
With this considered, I found myself pitted head to head with the competitor, solely on a cost versus cost basis. Very quickly, it became clear that we wouldn’t be in a position to win based on our competitor’s willingness to sacrifice margin in order to secure the prospect’s logo.
In reality, my focus throughout should have been and remained centered around how our proposition delivers value with consideration for the total cost of ownership opposed to individual unit costs. This becomes crucially important when engaged in Enterprise transactions where delivering a value-led solution sale is critical to delivering transformative deals.
As referenced above, this prospect was very clear around their decision-making criteria early in the sales cycle. This presented an opportunity to question this further along with a chance to effectively query their approach to assessing costs. Simply taking a blanket view of the cost of 1 product or service against another fails to pay consideration to the multiple other factors that contribute to the cost of a sale or the added value a sale may deliver. At the time, I failed to seize these opportunities and instead, allowed the prospect to guide me down a path that had me fighting to justify the perceived high price point I had already presented.
Ultimately, I wasn’t in control of the transaction from the offset which gave rise for the prospect to steer the dialogue and ultimately define their decision-making process unchallenged. This loss helped me to reaffirm the importance of ensuring I am much more tightly engaged in understanding an organisation's drivers to implement change.
Engage Key Stakeholders
Throughout the whole engagement, we were connected to middle-management and had no access to any key stakeholders within the organisation. When it came time to hone in on the commercials of the deal, we didn’t have any access to power, which we needed to effectively understand whether our proposal was addressing their requirements or otherwise.
Our middle-management contacts were reluctant to allow us to connect directly to their senior stakeholders and this prevented us from accessing any levers that would give us real influence on the deal. As I reflected on this scenario, I realised the importance of gaining access to power at the top of the prospect’s organisation. Through relationships with key stakeholders, you’re able to effectively control, leverage and navigate a sales cycle through to close.
Build a Champion
Throughout this transaction, we lacked a champion, someone on the prospect's side who was equally invested in us being successful as we were. From the offset, we were just a vendor and didn't spend much time working to have someone selling on our behalf internally within the prospect's organisation.
This became clear as the transaction matured and we found ourselves increasingly playing defence. A champion would have given us greater insight into the prospect's buying drivers and the personas within the account along with having an extended salesperson to drive our agenda directly from the prospect's own perspective.
I reference the term of building a champion as it's important that the person you identify as a potential champion has the ingredients needed to affect change within their organisation. It isn't enough to have someone who is just enthusiastic about your proposition, but instead, has the ability to compel action and instill confidence within their own organisation.
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Disclaimer: All views expressed on this article are my own and do not represent the opinions or views of my current employer or any entity whatsoever with which I have been, am now, or will be affiliated. This post is for informational purposes only and any advice should be followed at the reader's own discretion.
©2019 by Alex Alleyne