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Ask any sales rep why they won a deal and they will answer with a variety of answers. They will say they won because of relationship, a great demo, out selling the competition, etc. They will never say they won because they were the cheapest price. No one ever comes back to the office, rings the bell, and says “I won because I was the lowest price.”
However, ask a sales rep why they lost and 9 times out of 10, they will say…you know it… price. The fact is no one ever wins or loses because of price. There are always, always other factors involved. Sure, price may be one of them, but it is never alone. Everyone who has been in sales for any period of time has gotten both of these calls from a customer at some point:
Call 1 — “Hey Ed, this is Jim, we are ready to buy, but I need you to be at price X. Get me that price and let’s get the paperwork done.”
Call 2 – This “call” is often an email, because customers don’t want to tell you that you lost in person. “Hey Ed, this Jim, we decided to go with your competitor. Sorry Ed, you did a great job, we just felt it was best for the company and they were cheaper.”
Why do you get Call 1? Because you have done a number of things right. Most likely, you have established a relationship better than your competition and demonstrated greater value. You have earned the right to get this call and understand the REAL price point at which the customer will buy.
Why do you get Call 2? Because the competition has done a better job, has a better relationship, and earned the right to get Call 1 instead of you. Notice in Call 2, he told me the competition was cheaper. Often that is either a lie, or an expression of the fact that he shared the buying price with someone other than you. No one buys on price alone.
The challenge with this list is that it is not easily measurable. As managers, you must focus on things you can measure (and therefore have an effect). We determined that the best exercise to measure how your reps are doing with a deal is establish 10 tangible steps that help you win. This is very important because it will a. increase your win rate, and b. improve your forecast accuracy. Unfortunately, I cannot just give you a pre-done list of your 10 tangible steps because these vary based on your company and your industry. Below is a sample list to give you some ideas of what should be in the 10 steps. Note that anything that goes on this list must be a. tangible, b. measurable, c. easy to determine.
Once you establish your 10 steps, you can then use them when discussing a deal with your reps. You can start to make managerial judgments about your reps chance of really winning a deal. For example:
These results will vary slightly, but they are a solid indicator that will give you the ability to help your reps win more and improve your forecast accuracy (good management!).
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