In many companies, sales forces dive in far too quickly to sales cycles before adequately evaluating the opportunities.
There is good motivation for doing this: salespeople want to get those deals in for themselves and their companies, ahead of the competition which today can be quite fierce. But it can be seen that far more time, effort and potential income can be wasted in pursuing bad opportunities than will be gained in fishing out one good deal from a lot of worthless ones, all for a lack of proper opportunity evaluation.
Meet Nancy
Nancy is a sales rep for a company that sells office furnishings. The deals made are for whole buildings or entire offices—Nancy’s company will provide furnishings that dovetail in with an existing or new interior design scheme. They include chairs, desks, couches, conference tables and any other such items needed.
Nancy’s company generally qualifies opportunities with this data: the target company is in the market for new furnishings; there is a budget that will accommodate her offerings; she has a contact within the target company that can influence the buying decision; and the target company is looking to make this purchase sooner than later.
Using this data, Nancy evaluates an opportunity with Company X and finds it meets the criteria. She meets with her contact: a vice president at Company X. Nancy and her technical consultant walk through Company X’s offices and obtain details from this vice president on exactly what they’re looking for. Nancy discovers what the budget is for the project. She works up a quote that fits in with this budget, and forwards it onto Company X. All looks pretty good. Nancy’s sales management is hopeful, as is Nancy.
The vice president tells Nancy that the purchase has been written up and submitted to the president of the company, who is the final authority. Nancy is happy because it appears the purchase doesn’t have to go through a long chain of decision makers, which is good.
The Deal Falls Through
Nancy periodically checks with the Company X’s Vice President to see how it’s going. The Vice President reports back that all is good. This goes on for a few weeks. Then a month. Then a few months. Then suddenly the Vice President at Company X isn’t answering Nancy’s emails. Nancy calls, but can’t get the Vice President on the phone.
At wit’s end, with a substantial deal on the line and with her sales manager breathing down her neck, Nancy finally goes out and pays Company X a visit. When she arrives there she discovers that the whole place has been furnished with someone else’s products. She politely but firmly asks to see the vice president with whom she was dealing, and the vice president sheepishly tells her that the president and the two other vice presidents were very skittish about buying new furniture, even though they initially thought it was a good idea. They had always leased furniture from one particular company and in the end felt safest going back through that route for the new furniture. For Nancy and her company, the deal has been lost.
Full Opportunity Evaluation in the Beginning of the Sales Cycle
Now let’s see how it this sales cycle would have worked out if Nancy and her company more fully evaluated opportunities up front.
First Nancy, as part of evaluating the opportunity, would have discovered what kind of financial priority this purchase was for Company X as related to other priorities. She might have discovered that leasing furniture was an ongoing priority, and could then have taken action right there to counter the company they were leasing from.
Nancy would have fully looked over her company’s risk factor—specifically how Company X might solve their need for furnishings if they didn’t go with Nancy’s company. Again right there she would have bumped right into the leasing issue and could have addressed it.
The decision-making process would have been fully researched, including the informal process—which included the two other vice-presidents and their input. Nancy would have discovered what motivated each of the decision makers, and right at that point would have found that the President and the other two vice presidents had previously been motivated by the leasing option.
Perhaps the most crucial issue that Nancy would have addressed is the competitive situation. Right up front Nancy would have learned all about this leasing company and, most important of all, its existing established relationship with Company X and its key executives. She could have then demonstrated the many benefits of purchasing over leasing and what her company offered that the leasing company could not. In short, Nancy could have evolved a robust anti-competition strategy right at the start, and quite likely would have won the deal.
The lesson to be learned: in any sales cycle fully evaluate the opportunity in the beginning. Doing so will illuminate the good deals there to be gained, and quickly eliminate the bad ones.
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