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All Opportunities Aren’t Created Equal

A commenter on LinkedIn questioned my assertion that the first metric is, and should be, new opened opportunities. He suggested that “more” doesn’t necessarily mean better, and the demand for more opportunities often leads to unqualified opportunities. He asked for a further explanation, as well as advice as to what a sales manager should do about unqualified opportunities.

I agree completely with the commenter’s idea that a drive for more can lead to unqualified opportunities being loaded into the pipeline just to please the sales manager. All opportunities are not created equal. Here’s why and what to do about unqualified opportunities if you are the sales manager.

Disqualified Even Though They Spend

It should be easy to disqualify opportunities when the prospective client doesn’t buy what it is you sell. But this is difficult for new salespeople who believe that it is easier to win a target that doesn’t spend money in your space than it is to win a competitive displacement and take a client from a competitor. Salespeople that have sold for some time have time have likely already learned that you can spend too much time trying to sell to people who don’t buy what you sell.

It is, in the end, easier to sell to people who already value what it is you sell.

Bu some opportunities should be disqualified even though they spend money in your category. All opportunities really aren’t created equal, and here are some of what makes them unequal.

Disqualified on Values

There are companies that spend a lot of money in your category, but they don’t share your values. Some are low on the business maturity continuum, and they are adversarial. When you know that you are never going to have a relationship that is based on mutual trust, mutual respect, and a willingness to work together to produce great results, the opportunity should be disqualified. This isn’t easy to do, but it’s especially not easy when the prospective client spends a lot of money in your category.

You will come across prospective clients that are literally too difficult to serve. Their dysfunctional behaviors and lack of values can destroy your team’s morale, drain your psychic energy, and ruin a happy, productive team. Regardless of how much they spend, they should be disqualified.

Disqualified on Value Creation

Some of what you believe to be dream clients really aren’t’ dream clients at all. They may be the biggest users of the products, goods, services, and solutions that you sell, but the way that they would need you to create value for them doesn’t put them in your sweet spot.

Some of these prospective clients need you to be the lowest priced provider because that is their chosen business model. They believe that you aren’t worth paying more for, and they don’t buy on value because they don’t sell value. They sell price and think you should, too.

Other prospective clients need an innovative, bleeding edge provider that can help them differentiate and break out of the box in their own market. If that’s not what you do, regardless of how much they spend, you are not for them.

Still other companies need a real partner, someone to work closely with them and their business to create an enterprise relationship. They need a partner that can act as an extension of their team and produce results by having the customer intimacy strategy that aligns their organizations around goals.

When the value creation doesn’t match up, you aren’t a fit and you should disqualify the opportunity.

Disqualified on Money

You will come across prospective clients that can’t afford to pay for the results that they need. They want what you sell. They need what you sell. But they can’t pay for what you sell. Or, their credit doesn’t indicate that they will be able to pay in the not-to-distant future. They can exhibit all of the signs of being a good prospective client: they can be receptive, you can create value, and they want to buy. In the end, they don’t have the money.

Money can also kill a deal when the prospective client will be too expensive to serve. They may want what you sell, and they may be willing to pay what looks like a reasonable price. But a deeper look at their requirements can reveal that serving them will cost you more money than you will make. They may require different specifications that cost money, or they may require adding additional people to your staff, people for which they aren’t willing to pay.

Disqualify these opportunities, too.

Disqualified for Not Fitting the Sweet Spot

The best way to produce great results in sales is to focus your effort in your sweet spot. The value creation, the cultural fit, and the money issues usually give you some indication as to how well a prospective client fits.

But there are some prospects that just don’t fit. They aren’t adversarial. You can probably help them. You might even make a little money. But they still aren’t right for you and your company.

You may be able to serve them, but by doing so, you will distract yourself from real opportunities to create real value for the prospective clients that fit your sweet spot. They take time and energy away from more profitable business, and not just more profitable from a financial perspective: they can take time from opportunities to do real and meaningful work.

The Sales Manager’s Role

The sales manager role is to ensure that the company’s assets are applied to the right opportunities. The sales manager’s only assets are her salespeople. Because this is true she has to ensure that their efforts are applied to qualified opportunities.

To ensure that the salespeople focus where the right results will be produced, she must ensure that her people know what a target prospect looks like. She must also help her salespeople understand what the company’s sweet spot clients look like, and how they best create value for their clients. Even when it is difficult, she has to lead the sales force by being willing to walk away from bad business. In doing so, she has to be willing to help the sales force acquire the right prospective clients—their dream clients.

She has to say no. She has to walk away from bad business.

And, she has to be able to prevent the drive for more to lead to empty, meaningless opportunities for the sake of having a pipeline.

Questions

Why are some opportunities less valuable than others, even when you take money out of the equation?

Does the drive for “more” opportunities lead to more, but poorly qualified, opportunities?

What are the reasons a prospective client should be disqualified?

Should clients ever be disqualified if they spend a lot of money in your space?

How should a sales manager ensure a full pipeline without pursuing poor opportunities?


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Comments

comments

  • http://brianvickery.com Brian Vickery

    I thought this was very insightful, Anthony. I had to build a new pipeline in a new region for our company a few years back. When you are scrambling for business, you will do just about anything (ethically, of course). As a result, you end up with a lot of unqualified prospects in the pipeline. Many of them also try to force you to be the low-cost provider yet they can be difficult to serve. I finally got brave with some of these prospects and had to walk away…because the alternative would have cost my company in one way or another.

    Definitely sell the value vs the price. We think we are very reasonably priced and to give further discount is to place less value/worth on your own services. We appreciate what we do, and how well we do it, so our job is to convince prospects of that true value vs necessarily lowest cost. End the end, we do think we are the lowest cost because of the quality we add!

    • http://www.thesalesblog.com S. Anthony Iannarino

      I love your point about how we value our own services, Brian. Such an important point. Lowest price and lowest cost are two very different ideas. 

      It’s tough to walk away. But ultimately, you are a stronger company for having done so. It also sends a message to the sales force that you do value the work that you do. 

      Thanks for sharing your thoughts here, Brian!

      Anthony

  • David Chevalier

    I think it’s easier to get away with less qualification for transactional sales.  Relationship building substantiates your claims as does a long sales cycle.  But, if you look too hard for the perfect deal and manage your team that way, you might alienate your sales staff if they’re paid for driving revenue, not client retention and profit. I think salespeople and management need incentives that are properly aligned if you want more “sweet spot” deals.  How would you design your compensation plans to drive the behavior described?

    • http://www.thesalesblog.com S. Anthony Iannarino

      Thanks for sharing your thoughts here, David. I think you are correct that you do have to qualify and build a pipeline of the right business, and it is more difficult than people imagine to design a compensation plan that encourages the right outcomes. I’m not a compensation specialist, but I do think you pay for the results that you really want from your salespeople. 

      Anthony

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