5 Steps to Take if You’re Losing Sales and Don’t Know Why
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had every reason to win the sale, but you didn't. Your prospect was well
qualified, and your product/service clearly outshined the competition.
What went wrong could be any number of typical possibilities, but sometimes
sales are lost for less obvious reasons. The current economic climate,
for instance, has fostered a hyper-competitive sales environment--one
in which salespeople and their companies don't always play fair. Take
these real-life situations we've encountered:
* A mobile devices vendor began losing sales to a competitor, even though
executives knew they had the better product and salespeople were doing
their jobs well. Prospects claimed the competitor's product appeared just
as durable at a better price. Price wasn't really an issue--salespeople
could demonstrate that over the life of the product, their solution actually
cost less--but the durability claim made no sense. This vendor had a superior
product, and side-by-side tests at the client site should have confirmed
What was happening? In the face of falling market share, the competitor
had installed extra padding in test versions of its devices. Prospects
weren't likely to pry open hardware when testing it, so they thought they
were seeing an equal product at a lower price. Armed with this knowledge
of their rival's deceptive practices, the vendor's salespeople began advising
prospects to insist that all test devices be opened up on-site. The competitor
immediately backed out of these sales, and the hardware company started
winning deals again.
* A staffing company's business clients renew their contracts annually
by following a standard procedure: Clients send out RFPs, and this company
rebids for the business. Since the staffing company provides excellent
service at a competitive price, it has a history of repeatedly winning
these "easy" sales to existing clients.
Last year, however, company executives were shocked when they lost a contract
with one of their largest customers, and they lost to a much smaller contender
with fewer resources. The salesperson on the account had done her job
flawlessly, and the Sales VP couldn't find anything that pointed to a
problem. The whole situation "just felt wrong".
The only difference from the prior year was the addition of new Board
members within the client company. One of these Board members, in his
eagerness to help a friend whose staffing business was struggling, quietly
(and illegally) provided his friend with a copy of the proposal submitted
by the incumbent staffing company. When this friend subsequently submitted
a proposal that--line for line--matched or beat the incumbent's proposal,
the Board member argued on his friend's behalf.
Though the real reason behind this lost sale eventually surfaced, this
story didn't have a happy ending. The staffing company's attorneys have
the option to sue, but this would require a long, expensive legal battle
that could drain precious resources. The company's executives decided
to shoulder the loss, but they took a huge financial hit as a result.
* A large technology company relies solely on indirect sales channels
to sell its products. After launching a new product line, the company's
executives anticipated strong returns, so they were surprised when sales
growth remained flat. It would be easy to blame a bad economy, but that
wasn't the case. A number of this company's "resellers" were in fact selling
products for the competition. They signed on as resellers so they could
gain competitive intelligence to better position their other offerings.
When the technology company learned that these "resellers" had no intention
of selling its solutions, it swiftly severed its relationships with them.
Going Beyond the Usual Reasons
The above are just a few examples of dishonest sales practices adopted
during tough times. Most businesses operate ethically, but if you're losing
sales when you've got every reason to win, you may need to look beyond
traditional causes. Hopefully, you'll uncover problems that point to a
fixable change on your part, but if not, start thinking outside the box.
To start, take these five steps:
1. Define what's happening. Look at every step of your
sales process, and watch for patterns or stages where things come to a
halt. If you find sales breaking down at the same stage, ask if it's a
matter of inadequate sales training or perhaps a sign that you need to
revamp aspects of your products or services. Don't be too quick to assume
foul play, but if things don't add up, consider what your competitors
could be doing that would drastically turn the odds in their favor. Could
they be misrepresenting your product or company? Could they be doing something
that artificially makes them look better? In one situation, a company's
competitor provided false financial data that made the company appear
to be faltering. In another case, salespeople blatantly lied about their
rival's product. Prospects felt like they were getting the inside story
when in fact they were receiving lots of false information. Because the
competition's sales reps were so good at building rapport, however, prospects
weren't doing their homework and getting to the truth.
2. Go back to the prospect. Ideally, you've asked for
the option to follow up earlier in the sales process, but if not, find
a way to get the prospect talking. You've already lost the sale, so some
prospects may not consider it worth the time to speak candidly with you.
Make it worth their time. Be clear that you're not pursuing the sale,
and find a way to offer value so the prospect wants to speak with you.
Provide information that helps the person do their job better, or offer
a gift card. When you reach prospects, don't take up too much of their
time, and prepare highly targeted questions so you don't waste one moment.
As numerous studies indicate, prospects and customers are typically far
more candid with third parties than they are with vendors. If you feel
you're not getting the full story, consider going through a sales loss
analysis firm or another outside source. You may pay a bit extra, but
the information you glean will likely more than pay for itself.
3. Seek out your internal champions. Contact all internal
champions within the prospect company. Often, you'll learn more from them
than you will from the decision maker since, after all, they wanted to
see you win. Along these lines, do your best upfront to build some type
of relationship with various members of the prospect's Board of Directors.
This isn't being underhanded. It's being smart.
4. Hire a "secret shopper". If you're concerned about
your resellers, try sending a "secret shopper" (ideally, someone within
your company) to trade shows. Have this person ask resellers for their
opinions on five or six vendors rather than specific questions on your
product/service. This can quickly give you an idea of how you're being
positioned against others.
5. For proposal issues, understand your options. If you
suspect a problem pertaining to a proposal you submitted, your options
vary depending on the size and nature of the company issuing the RFP.
According to Kent Webb, attorney at Womble Carlyle Sandridge & Rice in
Atlanta, many large companies now have hotlines through which you can
file a complaint. To locate this number, call the business directly, check
the corporate website, or do an online search that includes the company
name along with keywords such as "procurement hotline" or "ombudsman".
If the prospect is a government entity, you may be able to access the
other proposals submitted, or at least the winning proposal, thanks to
"Sunshine Laws" (there's a federal version of this and many state ones
as well). These laws promote open records and guarantee public access
to information held by the government entity. In the case of the staffing
company mentioned earlier, this is where executives spotted their red
flag. They found a small footnote on a single page of their rival's proposal
that became sufficient grounds for a lawsuit.
If you've submitted a proposal to a small or mid-size company, your options
are more limited. For any proposal you submit, regardless of company size,
include a confidentiality provision or request that the company sign a
non-disclosure agreement. These are typically included in the original
RFP documentation, and they can provide grounds to pursue legal recourse
should you choose. In this scenario, you would need to go through an attorney,
file a suit, and have the competing proposals released through pre-trial
A word of warning: Should you suspect foul play and consider filing a
protest, be prepared to face repercussions. You may find yourself making
accusations against Board members or executives at the prospect company,
for instance, and those people may have friends or peers within your client
and prospect businesses. Sometimes, painful as it may be, it makes better
sense to walk away from these lost sales than it does to pursue fighting
Ginger Cooper is VP of Marketing at Verity Insight Partners,
where she provides sales loss analysis that helps companies and their salespeople
start winning sales again. Want to know why you're losing sales and what
to do about it? Visit Ginger's blog at: http://www.verityinsightpartners.com
Published - May 2010
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