Selling is a complex and dynamic human interaction. There are a lot of things that can wrong that can cost you a deal. But there are two that tend to dominate the “reason” category for losses. The first is the lack of relationship, and the second is a lack of value creation.
I have met and spent time with Matt Dixon and Brent Adamson from CEB, the authors of The Challenger Sale. They’ve explained to me—and to countless other people—that their research suggests that Challengers (those who are willing to challenge their prospective clients) major in Challenging and minor in Relationships (where they had the second highest scores).
I’m not privy to CEB’s research, but I believe that the reason the Challenger can effectively do so is because they have excellent relationships (as well as a ton of business acumen and situational knowledge, something more than an insight provided by marketing). Matt and Brent’s hyperbolic headline notwithstanding, I don’t believe that they intended for you to stop worrying about relationships.
Right now, there is a ton of market pressure driving companies—and the people that make them up—to be more transactional. The communication methods we use are less personal than the traditional methods. The sales processes we implement are more transactional than they should be. The drive to reduce costs across all segments of the business, including sales, is causing companies to move parts of the sales function inside. And a lot of salespeople believe that are supposed to be transacting.
The more complex, risky, and expensive the solution you sell, the more you need relationships to succeed. Not going to meet your client because it is a plane trip away is a decision to ignore how important relationships are. Not spending time with your dream clients building trust and deepening your understanding is a decision that suggests you believe selling is really an arms-length decision. The trouble is, your clients will allow you to be as transactional as you want to be.
Don’t be surprised when you lose because no one really knows you. If you think that being known, liked, and trusted isn’t important, try to sell without them.
Value Matters as Much
This much is true: the friendship component that used to be the foundation of the relationship is no longer enough. The lack of a friendship’s ability to carry a deal is a dramatic change in sales over at least the last two decades. The shine on your shoes and smile on your face? Nice, but not enough. The dinners and the tickets to the ball game? Really nice, but still won’t substitute for real value.
Most of the time when we believe we lose because our price is higher we really lose because we didn’t create enough value. Sometimes we have trouble helping our clients perceive the value we create (something I won’t even pretend is easy). And occasionally we lose because our prospective client stubbornly adheres to the immature and expensive belief that lowest price is the only real value (something that should have been discovered early in the process).
One of the real challenges some people have in increasing the perception of value is that they haven’t spent enough time on the relationship to have all of the conversations necessary to changing that perception. They haven’t built the trust that the additional investment they are asking for is worth paying and that their prospect will capture the additional value. They also haven’t created a preference for themselves and their company, something that is often worth the difference in their price and their competitor’s price.
We can roll up dozens of problems to lack of value. Not following your sales process means not creating the right value for your prospect at the right time. Not gaining the commitments you need means failing to help your prospect take the necessary steps to get results, often because you fear imposing on them, or some such thing.
If your business is super-transactional, like Wal-Mart or Amazon, then by all means drop the relationship and get to lowest price as fast as you can (If Amazon hasn’t already beaten you to it, they soon will). But if your business is about customer intimacy, then work as hard as you can to move the only other direction can and get super-relational.
That means you develop relationships of value.
- Look at the last few deals you lost. Were you known, liked, and trusted? Were you known as someone who can help deliver results?
- Look at those same last lost deals. Did you create the right level of value, making price something less an important than the real outcomes your prospective client needed?
- How did you lose the last deal you lost? What was the cause you lost? What would you change if you could go back and do it all over again?