Wednesday, February 09, 2011
Four reasons you will lose a sale to "no decision"
It’s bad enough when you lose a potential new customer to a competitor. In every market this reality is inevitable, for reasons we can and often cannot control.
But your bigger priority and opportunity is likely with deals you lose because no decision was made at all. If the prospect has been qualified and ultimately decides to do nothing, there’s room for immediate improvement to increase conversion of these deals starting tomorrow.
Here are four reasons I hear most often why deals are lost to “no decision”, and how you can start to address them in your sales organization.
You haven’t created (or established) enough value. It’s a nice to have but not a need to have. The prospect may know what it is, but not clearly understand how it can measurably impact their business. This value translation is both related to the business and the individual. Does the buyer understand how using your product or service will make them look good? Do they understand the path you’re providing to a promotion, a raise, recognition, other things they directly value?
And how well did you research and understand what the customer values up front in the sales process? Too often we leave value translation up to the prospect, either by not sharing enough about outcomes we can create or by assuming the outcomes we’re presenting are what the prospect actually values.
It’s not a big enough priority for your prospect. If you get this answer at the end of the sales process, you didn’t qualify the deal well enough. The vast majority of your qualified prospects will fall into the “not ready to buy” category. They like what you have, they want to do it, they’ll talk to you for a long time – but at the end of the day, it’s not where their time or budget is going to be spent. At least right now.
Many of these deals may actually mature later – based on changing organizational priorities or some other compelling event that makes it a higher, more urgent need. But you need to determine priority in the qualification process up front. If you do nothing else, make sure this reason for losing a sale is eliminated from your sales organization quickly.
The cost of changing is greater than the perceived benefit. Change creates work. It creates friction. It requires decisions that often aren’t fast or easy for an organization to make. Organizations change all the time, of course, but they do so because of a shared understanding and urgency around achieving a perceived future benefit.
No matter what you’re selling, there’s a hard and soft cost to changing. Learning a new product, switching from an old one, getting multiple divisions aligned around implementation and execution. This is a lot of hard work that sales organizations don’t often recognize and appreciate well enough. And if you don’t have alignment at the customer level of the common desired end-goal, executing on that change may not be something they want to deal with.
The risk of staying the same is lower than the risk in doing something different. I don’t want to change if I don’t have to. If I don’t need to. If there’s a chance you might not do what you say you’re going to do. If I don’t understand the true, calculated risk of not making a change. Does your prospect understand the likely future if they stay the same? Have you helped them calculate the likely future pain of continuing on the same path?
This objection is a two-edged sword. Either you haven’t reduced the risk enough of going with your product or service, or you haven’t increased the perceived risk of staying the same. Or both. Either way, if the balance isn’t in your favor, you lose. To nothing.
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