During many of the sales training sessions we deliver, sales teams are always screaming for a way to understand not only how to build pipeline, but how to bring clarity to the deals that are already there.
There is no situation where this is more critical than when teams are making territory changes. This happens quite frequently in enterprise sales organizations in which sales reps are taking over new/different territories that require them to qualify any deals that are being transferred to them. During my days at Agilent Technologies the sales teams would meet to transfer accounts and they would typically do a cursory overview; I would consistently caution the reps taking over these regions to assume everything is junk and to go and find new opportunities. The reality is that if a great deal could have been closed it would have been already.
This harsh reality also led me to really coach my reps about the importance of getting to the critical business issue (CBI) of each deal. This seems so simple yet many salespeople are so focused on understanding the technical issue(s) that they are not asking the business-related questions to truly qualify the deal. The sales teams are so keen on selling a product to make quota they forget how much time they spend working deals that have no chance of closing.
While we need to know the technical solution is a strong fit, there must be a business justification. In most cases, the sales reps were one or two questions away from getting to the CBI.
Case study: Selling a new solution to the banking industry
In one such situation, our client hired Sales Gauge for prospecting training that involves securing new meetings in a live, interactive session. This organization was looking to match the tools they had developed around identity authentication and sell into the commercial banking world. The marketing team conducted a preliminary market review and determined that check fraud was a major pain point, believing that the scanner they had developed would be a game changer and would empower bank tellers to be the first line of defense against check fraud. With management on board, a quota was assigned to the sales team around this solution.
With this information in hand, we worked extremely hard to get a meeting with the 3 key people at a prospective bank including the CIO, the Head of Security, and the VP of Bank Operations. During this meeting, the sales rep pitched the idea to them and everyone agreed it seemed promising. The salesperson then shared the demo to show them how the tool and process would work.
After the demo was complete, the VP of Operations asked how many scanners would be needed for 10 branches; the rep said 2 per teller so about 30 of these at 5K per scanner or $150,000 before training. In response, the bank executives said “no thanks.”
Why did they decline the solution so quickly? The answer lies in the information that was missed because a few important questions were never asked up front. Let’s analyze this key information:
- Unfortunately, this marketing-driven program had no budget and no real data behind it; the sales team was assigned a quota for a new market that was totally unproven.
- If the sales rep had asked the one key question, “How much check fraud do you experience each year?” they would have learned that this bank loses $35,000 yearly. The ROI of this investment was 4+ years and had the CBI been tested up front the rep would have quickly come to understand that this was not a viable deal. The Head of Security said they would live with the $35K loss per year.
- On a side note, the false positive rate of bad ID scanning is approximately 50% or one out of two scans, further complicating the sale.
Now let’s contrast this with an active deal our client was working on in the Midwest that had a much more favorable outcome.
Case study: Increasing velocity in the sales pipeline for a manufacturing company
In this next example, our client hired us to conduct live sales training on site and, as part of this training, each sales rep had to bring specific sales deals to review with the group. The reps had to justify these deals and determine next steps for each one. In one of these cases, the group determined that the rep had actually asked all of the right questions up front and had uncovered the CBI but he didn’t realize it!
The deal that this sales manager had put in front of the prospect was for $800K. Prior to our training session, the prospective company was somewhat interested in their solution but the CFO had said that they were looking at it for a Q4 purchase. However, during our session, we uncovered the following information about this deal:
- It turns out that the $800k investment in the tools and services would save the prospect in engineering time, provide a design reuse library, and reduce the errors in bills of materials.
- It could now be argued that the increased efficiencies in engineering would enable them do more with no additional engineers, and they would possibly even be able to reduce the number of engineers they had on hand.
- This also enabled them to go after more new business they had been turning away due to lack of resources.
The savings and potential new business added up to a $12M in ROI on an $800K investment. The sales manager took this data back to the prospect’s CFO.
Here’s what happened next:
- The CFO realized that based upon the numbers, the company could not afford to wait and signed off on the PO 120 days earlier than anticipated, rapidly increasing the velocity of the deal in our client’s pipeline.
- Our client unseated their competitor who had been the installed vendor at this company prior to this deal.
And all of this happened because our client was able to identify, capture and confirm the critical business issue with their customer.
These simple examples clearly illustrate why you must ask hard business questions before committing to a demo with a prospect. Had one question been asked up front in the first example this “new opportunity” would have never made it into the CRM pipeline, while the second proved to accelerate the deal. We need to find the CBI to ensure that we spend our time on things that will truly drive revenue.