One of the great things about having a wide network is that sometimes lessons come from far away.
Scenario: $120K opportunity to a repeat customer. Compelling Reasons identified. Urgency established. SOB proven. Excellent! Second base. CEO, EVP and CFO agree that the timing’s right, the money’s right, and that it’s a go. Great! Third base. Only thing necessary: Do a $20K pilot. Pilot works? Do it all.
I don’t know how you set up pilots, but the way I do is to review all possible outcomes with the prospect and determine what my prospect will do in each case. In this scenario, the salesperson assumed that because this was a repeat customer, it was a slam dunk. As you might imagine, the pilot did not go perfectly and although the outcome could have been anticipated and handled on the front side, it was a surprise to the customer because it had never happened to them before (It had to the provider.). It wasn’t explained as a possibility before the pilot, so the prospect could decide how to handle it before it happened. Nobody knew what ‘works’ meant.
Bottom line: The salesperson really screwed up. He didn’t set up the pilot properly. He not only blew a $120K deal, but he ended the relationship with a repeat customer.
The rest of the story: When the salesperson was debriefed, his supervisor decided to try to save the day. The supervisor, top sales guy and the original culprit spent several hours strategizing internally, trying to explain to the customer what went wrong, how they screwed up. what they should’ve done, and how the ‘failure’ was no big deal.
Bottom-Bottom line: They saved half the deal, $60,000 and they have a second chance to have a satisfied customer again. The cost: 40 high level man-hours at $500/hour trying to save the deal.
Done right – this is $120,000 at normal margin. In reality, it’s a $40,000 ($60K – 40 x $500) low margin project with a customer that’s gonna scrutinize everything he does, not trust and be very (if not impossible) to please.
Now, my friend didn’t tell me if the culprit was a million dollar producer or this $120K was his whole year. He also didn’t tell me if the culprit worked for a $100 million company or if this incident will severely impact the bottom line.
OK, so forget my friend’s client and his $120K opportunity. What about you?
How many people do you start into your sales process every year? How many of them buy? Of the ones that don’t buy, how many of them should have? How much time do you spend with non-buyers? Why didn’t they buy? How much should they have bought? What would you have done with that extra income? How long have you been doing this? How much….never mind. You know where this is going. How much do your mistakes cost you? How about the mistakes that you don’t know you’re making?
As you know, I heard Scott Latham speak last week.
This is an excerpt from one of his slides.
- Creative Destruction is the Flushing Process
- Joseph Schympeter, Harvard Economist
- Recessions Separate The Wheat From The Chaff
So, I poked around. I found this article where I read:
“…recession are painful: unemployment, lower wages and profits, and bankruptcy.”
I also read: “…recessions are a process of creative destruction in which inefficient firms are weeded out. Only by allowing the “winds of creative destruction” to blow freely could capital be released from dying firms to new industries.”
And: “Another “benefit” of a recession is that it purges the excesses of the previous boom, leaving the economy in a healthier state. “
I also found ‘Seventeen Reasons That America Needs A Recession‘
And Time and CNN ask the question, “Is the American economy in need of a good cold shower?“
Elaine and I can add that we bought our first house in 1981 when many were suffering due to high oil prices caused by the Iranian Revolution and a tight monetary policy. We bought our vacation home in Maine during the recession in 1991. So, we say, “Bring it on! Let’s have a recession! I want a condo down south!”
My questions for you.
Are you the wheat or the chaff?
Are you efficient or inefficient?
Is your capital about to be released for someone else to use?
Will you do what it takes to sell your way through what’s coming?
Can you do what it takes to sell your way through what’s coming?