307: What About The Deals We Lost

I am a big fan of Victor Antonio who is a sales coach in America. He has an excellent show called the Sales Influence Podcast.  In a recent episode I listened to he had some very interesting statistics.  According to US research, salespeople, on average, close about 40% of the deals they are seeking.  That means they lost 60% but what happened to that group who didn’t buy?  The shocking component of this research was the fact that only 20% went with a rival offer in preference to our genius effort.  That leaves 40% who didn’t buy from us and didn’t buy from the competition, so what were they doing?   Victor mentioned that of that 40%, 10% didn't move because the price scared the hell out of them and they became immobile, frozen in the headlights.  Okay, then we still have another 30%, which is a big group of buyers who didn’t take any action and the reason wasn’t related to the price we offered.  So what was the issue?   Victor believes it was a matter of the value we were able to offer wasn’t attractive enough for them to move.  Price and value, as we all know, are not the same thing.  The buyer needed to feel the size of the gain they would receive was worth it, based on how they measured the gain.  That gain could be measured in a number of ways.  It could be reducing costs, speeding up delivery times for their solution, integrating with another solutions they already have, making themselves more attractive to their buyers, etc.   One of the problems with Japanese sales teams is that they have no clue about what the client values.  How could that be?  Simple.  They don’t ask questions or if they do, they don’t ask the right questions.  We teach sales to employees of Japanese companies who want to improve their sales results.  When we get to the question design part, invariably, it is a new concept for most of them.  They have been taught to get straight into the nitty gritty of the spec, the data, the features of their solution.  They are throwing mud up against a wall and trying to work out which bits will stick.    It is so ridiculous, you wonder why on earth they would do it in such an ineffective way.  Part of the reason is that professional sales is not well established in Japan and most of the instruction is done with OJT or On the Job training.  That is the blind helpfully leading the blind.   For those who at least understand you need to be questioning the buyer to find out what they need, their questioning can be very shallow.  They miss the hints, the flags, the arrows that points to “dig here” for the gold.  They just skip on to the next question without finding out what the buyer needs at a deeper level.  This is where the “what do you consider value” conversation is required.   Victor flagged another element, which was about the degree of perceived effort required to implement the solution we are recommending.  I teach in a non-profit programme called the Japan Market Expansion Competition, where teams of young people from different companies work on a client’s business and come up with a business plan for them, as part of the competition.  I was also a paying client of this JMEC programme but I threw the plan away.  The reason was just this issue of the effort we would have needed to implement the plan, wasn’t proportionate to the gains we would have made.    Our counterparts in companies are the HR department and we notice that in most cases they seem overwhelmed by the amount of work they have to get through for the number of people allocated to do it.  They are often very uninterested in doing things to help their companies do better, because they know the amount of work they will have to do, will go up dramatically.   Another friction point can be the amount of internal coordination needed to adapt to a new supplier.  We know that the ringi seido system of all related divisions signing off before the change is made, requires a lot of agreement internally.  It may be that our offering isn’t sufficiently compelling to overcome that internal friction stopping the deal from progressing.   When we are presenting the solution we can often get caught up in features, benefits, application of the benefits and evidence and forget about the issue of friction becalming the progress through the labyrinthian corridors of internal decision making.  We need to ask, “if you are able to implement our solution, are there any likely friction points we need to consider, in order to reduce or remove potential issues?”.  They may not be willing to share that amount of information in the first meeting, but we should keep asking the question on subsequent calls, in order to find out what we need to do to tweak our suggestion to get through the internal barriers.   If we can reflect on the deals that didn't happen, we may be able to better prepare ourselves for future sales calls.  We can head off rejection possibilities before they arise, by presupposing what is required on their side to see this deal come to fruition.