Too many "interested customers" but no orders!

CEO of a company selling software system for tracking effectiveness of mass media advertising came to me an year ago and told me that he had "65 open accounts" at that time. He was spending his time and his sales executive's effort for a long time on these 65 accounts but no business seemed to be materializing. He said that many of these 65 customers showed a lot of interest and engaged in discussions about the features of the software and benefits. But they went cold when the talk came to placing even a trial order.  He asked me what was missing ?

WHO ARE THE REAL PROSPECTS?

This is fairly common  in B2B business : many customers are apparently very  interested, they discuss animatedly, they give a detailed description of what they need but they do not progress forward from that position. The reason is that many of these customers are interested only in KNOWING what’s out there; or in VERIFYING if he got a good deal when he already bought something earlier from someone.

 

Then how to recognize a genuine prospect and how to avoid  psuedo prospects who will only waste your time and money but not buy. I suggest that, as early as possible in the sales process, do a reality check as below. Important is not only to ascertain what the customer needs but also how his company buys what is needed and if the purchase has been budgeted.  

QUALIFY THE PROSPECTS

If the sales executive is good and charming, he can find out in the  first call itself about five things (a) budget availability (b) if there are any qualification criteria (c) the evaluation and buying process (d) how things get bought in that organization (e) who needs to be involved to get to say yes.  Only when you have done this reality check can you guess whether you should continue calling him and whether you have a reasonable chance.

When I explained this to the CEO, he realized that he knew a lot about their advertising operations but he did not have any information on who are the real decision influencers in these 65 companies, whether they had the budget and, if not, how they would be creating budgets for this purpose.  That is also the time he realized he was in a bind - the beneficiary (advertiser) expected the ad agency to pay for the tracking software because it improved the efficiency of advertising but - since ad agency gets paid on a fixed % commission  -they had no motivation to recommend (let alone pay) for the software from their own pocket.

RECOMMENDED PROCESS

What should you do? To avoid wasting your valuable selling time and expenses, I advise you to first research the target company and decide how / why your product may help the customer.  Then create a  short (30 second) selling spiel  which tells the listener what you do, why he should listen, what you know about the need of the customer and what you have done for a similar client before with what result. Once you are ready, find out who is the concerned person at the highest level of responsibility and call him on the phone. Give him the spiel and ask “can this benefit you?”.

If the answer is “Yes!” or a strong “Maybe”, start your  qualifying process by asking 3 questions

1. IMPACT : Ask how and why the offered product may help and what  pain it would ease. This will help you estimate the impact of your offer on their revenue, costs, problems and opportunities. This would later create the basis for selling based on value to the customer (and hence less based on price)
2. PROCESS : Ask “If you find our solution worthwhile, who else would be involved in evaluating, adopting and purchasingt?”   This lets you know who to approach beyond your initial contact; without insulting your initial contact.  Since your idea or solution has already been acknowledged as worthwhile by the prospect. using this question also lets you ask them for help in moving forward. (NOTE: Don’t ask “Who is the decision maker?”  That’s insulting because it says to your contact that you think he’s a gate keeper )  
3. BUDGET : You can give them an idea of the rough cost in the preliminary meeting itself and check if the budget exists.

Don’t continue the sales process without knowing the answer to these 3 questions. The answer to the first question will tell you what selling message will appeal to them. The second and third question will let you realistically estimate the time and effort that may be involved in reaching the ordering stage. 

IF THE ANSWER IS "NO"; DON'T SELL

If the answer is "no" (or a weak "may be") stop selling and say “thanks for your time and your honesty. I can see that our solution isn’t applicable to you.”  Then ask: “Do you know of a colleague that could use my solution?” 

B2B sales call placed too early may do more harm than good

Many B2B prospects are weary these days of having to waste their time in meeting salespersons too early in the purchase cycle.

So much so that they may be skeptical of even inquiring on a typical B2B sites for the fear that salespersons will start calling them.  What is a marketer do under these circumstances ?

I suggest that even if you get a request for a quote at your B2B site, do not rush. First, you must see how the profile of the inquiring party tallies with that of an "average target customer" profile. Only when you have internally “approved” quoting for it, should you send a quote to the party.

Do not make any call before the quote is sent. If you must, make it clear that you are gathering information only for working out a quotation. 

Send a "courtesy email" on the same day but after the quote has been sent.

After a few days send a follow-up e mail (and not a call) and, introducing yourself,  say that the purpose of the mail is to make sure that the client has received the quote and ask if the requirements have been defined for the project and enquire if they would like to have a list of broad requirements compiled from the experience.

Once a conversation begins, then you can pick up the phone. Make sure you deliver some value before you pick up that phone.

Storytelling to Make Customer Ask That Killer Question

How can you make most of your B2B "leads" convert into request for proposals (RFP) and finally into sales?

This seems like a dream and it is indeed difficult but it can be done. All you need to do is to generate curiosity quickly in the mind of the prospect so that he is tempted to say " I cannot wait to hear more...".

The way to do it is to create a story with the following skeleton.

• My company has developed this product (service) 
• that has helped (name a company which the customer respects - ideally from the same industry as that of the prospect) 
• achieve (mention some important business benefits)
• Would you like to learn how?"

It is not easy but it can be done. If  the question is formulated well, the prospect has to say yes.

But please realize that such a story requires close cooperation between Sales and Marketing because the marketing has to provide

• a clear positioning : description of what you want sales to sell and why should the customer buy
• genuine testimonials from companies your prospect respects
• a solution that truly and uniquely addresses and delivers what really matters to the customer

Once the customer gets interested,  you can drive the conversation further.

Oh come on ...that is not a "lead" !

Ask any salesperson if all inbound inquires are leads and he will tell you that they are a waste of time unless they are pre-qualified. Then why do many people refer to them as "leads"?

If the salespersons certainly do not call them as  leads; who does ? There are mainly 3 types who call them as leads (1) The  companies that make a living by selling lists and databases (2) Marketing departments who want to show that they have done their job by providing plenty of leads to the sales force to call on (3) Bosses who want to make a steep target look easy. Only such people can call lists and inquiries as leads. They may be happy with people asking for RFI (Request for information) but from a salesperson's perspective they are not solid leads.

The majority of inbound inquiries need to be nurtured and qualified with outbound marketing ( email or phone) in order to be 'qualified' as leads.  A successful lead-generation program will incorporate a varied mix of inbound and outbound components.

Business is about avoiding "toxic" customers and having the "right" customers

Choosing the right customer is not a luxury. It is a requirement !

A professor of operations recently told me; "You marketing people said that a customer is the king and the center piece of any business. Would you therefore advise a business to accept and serve any customer that chooses to come along?". I realized he had me there ! If strategy is about making choices, one of the most important choices you need to make in marketing is the very reason for you to be in the market - what type of customer you will serve. By making this choice, you also automatically choose its implication - what type of customer you will not serve.      

FROM LOSS TO PROFIT

I know of a B2B service company which went from making losses to making profits. One of the main cornerstones of their turnaround strategy was clear guidelines about what type of customers will the company go after and what type of customers it will not waste time on. I know this case intimately and just this bit made a huge difference. Within a time of mere two months the atmosphere in the company turned positive when the whole organization began realizing what a difference this choice made to the morale of the business development people and operations people.

Counter intuitive - sometimes throwing out the customers you do not want, improves business results. The CEO of a company said recently "I used to see red when a certain client was on the phone. The client made us jump through the hoops and fire unnecessarily and tired us completely. We were doing more work for her business than what we did for the other top 4 clients of ours put together. It was not easy but I decided to sack the client". And what do you think happened ? The morale and productivity of employees went up, its service level to its good customers improved and they responded by giving more work to the company.

WHO IS THE "RIGHT CUSTOMER"?

The lesson is not to fire bad customers but to choose the right customers in the first place.  So who is the right customer ? First and foremost, the right customer is the one to whom your uniqueness and competency can make a big difference - in a way that your competitors cannot. The fundamental truth hidden in this statement is that intrinsically there is no wrong or right customers - they become so only when you know your own competencies. The wrong ones are the customers to whom your uniqueness does not make much difference. 

If you are designed to create high quality products and if your sales department recklessly brings in more customers who do not value quality but only price, you will find yourself inundated with frustrated business development people pressuring you for more discounts, irate cost accountants asking you how you will meet profit targets, customers nagging you for price and delaying your payments. All because you went after wrong customers. 

In fact, your choice of customers is a very important part of your strategy because ultimately a business can practice only that strategy which its customers permit it to. A company cannot be in search of better quality if its customers are in search of lower price - it is an unstable situation. 

While choosing your customers make sure they are (a) not too small ( less than 5% of your existing sale) : small customers increase the cost of serving  them (b)  not too large ( not more than 25% of your existing sale) because big clients cause havoc if they leave and cause an unbearable shock . If they stay they behave as if they have bought your body and soul  (c) not unprofitable : sometimes big clients ask for discounts and credits and rework - such that in the end they may contribute to the revenue but not much to the profit (d) not obsolete and heading towards sunset themselves : if your clients are from industries which are in long term decline - or which are becoming non-remunerative due to hyper competition - your own long term prospects are suspect (e)  the ones that will make you expert in the area you have chosen for your future - they will help you gain the right competencies, help you along your selected path and accelerate your progress on the path you have envisioned for yourself.