Let's go back to the scenario introduced earlier in this chapter: Let's assume that a new offering is announced, and that traditional salespeople from New York, Chicago, and Los Angeles who have been with the company for an average of 5 years attend 2 days of training. Their first posttraining calls are scheduled for Monday. Each will be calling on the CFO of a manufacturing company.
If these calls were videotaped, would an outside observer realize that all three were selling the same product? Would the observer conclude that the salespeople worked for the same company? What might be the range of expectations in the minds of the three CFOs? Which of these three accounts should become part of the company's pipeline? In whose opinion?
Does it look as though all three are selling the same product? In most cases, as noted, the answer is no. Most likely, the presentation of the company's offerings and the shaping of the discussion with the buyer have been left to the salesperson to figure out. The result is a wide variety of sales approaches (although most will tend to be in the traditional vein).
After training, in many cases misdirected and all too brief, newly hired salespeople are asked to begin volunteering opinions. First, they must condense their understanding of the company's offerings into some format with which they can communicate a coherent message to buyers. This is an opinion. Once that task is completed, they have to analyze their territory—to decide what their target markets are and what titles to call on—and then to start filling their pipelines. Again, these steps begin with opinions.
Meanwhile, new hires understand that their honeymoon period is likely to last about 60 days, after which their pipelines must grow. Again, opinions come into play as the salesperson decides what approach to employ: go for quantity of buyers or quality of buyers? (Traditional salespeople think quantity; customer-focused salespeople think quality.) Even if they try to focus on what they feel are qualified opportunities, their judgment may be clouded, and their opinions shaped, by the pressure to show activity.
Within a few more months, they will be required to provide their opinion as to which opportunities in the forecast will close, why they will close, and when. Opinion, opinion, opinion. Is it any wonder that many customer relationship management (CRM) systems are flawed, at best? Many companies gather the input for their CRM system by asking their salespeople to interpret the outcome of their calls. But in many cases, the weakest link in the chain is a salesperson's opinion of what constitutes a qualified opportunity.
Salespeople are also asked to give reasons—opinions—when fading prospects finally must be removed from their pipelines. The most common reasons given are product and price. In most cases, we believe, neither is valid. If "product" is cited as a reason for the loss after a 6-month selling effort—for example, "we can't run under UNIX"—we believe that questions such as the following should be asked of the salesperson: "How long did it take you to discover that the buyer needed UNIX support? How long did it take you to realize that we don't provide that support?" The hard fact remains that if the product is not a "fit," the opportunity was never properly qualified, and those 6 months of activity were wasted.
And yes, unless you are selling a commodity like pork bellies, wheat, or gold, price is likely to be a factor in your success (or lack thereof). But we believe it's not always—or even often—the determining factor. Buyers tend to use price as an excuse when delivering bad news to salespeople. Think about it: Very often, when a salesperson learns that a sale has been lost on the basis of price, he or she asks, "Where do we have to be?" In most cases, the buyer declines to give an answer. Sometimes, this is because the buyer has psychologically closed the door and doesn't want to reopen it. But many times, as noted, price is used as an excuse. It was only one of many factors that went into the purchasing decision.
Stated conversely, if price were the be-all and end-all, vendors could post their prices on the Web and do away with salespeople. Purchasers could make all their buying decisions based solely on price. But they don't—so clearly, other factors are involved.
After a salesperson has competed for months and then lost, the buyer tends to let him or her down easily. One of the easiest ways out is to blame price or product, and most traditional salespeople are happy to take these reasons back to their managers. How many professions have situations in which there is one winner and a four-way tie for the silver medal? The real reason most opportunities are lost, however, is that the losing salesperson got outsold.
The odds are high that "I got outsold" will never appear on a loss report (that is, the write-up of a lost prospect). And this, in turn, is one of the reasons most loss reports are exercises in futility. Companies that attempt to direct product development based on loss reports, therefore, are doing the equivalent of driving down the highway by looking through rearview mirrors distorted by the opinions of salespeople.
A while back, we worked with a company that sold software to help manufacturers schedule preventive maintenance on their production equipment. They were one of three or four major players in this particular niche. About a year before we began working with them, they offered only a Disk Operating System (DOS) version of their product, while two of their competitors had developed Windows support. Predictably, the most common reason cited by the salespeople to explain losses was the lack of a Windows version of the product. In fact, the salespeople complained to the point where corporate made the investment, developed the new offering, and withdrew support for the DOS version.
What happened next? The next round of loss reports highlighted the fact that many buyers were still running DOS, and couldn't use the new Windows product!
We undertook a pipeline analysis and found two major problems. First, reps were filling their funnels with unqualified opportunities. Second, their opinions about which transactions were winnable, and how they could be won, were simply wrong. The company's strategic direction—to develop a Windows product and to stop supporting the DOS version—was misled by the opinions (excuses?) of their salespeople.