How to Control Selling Costs with the Right Pursuit Strategy
Are your salespeople pursuing new opportunities with the right strategy? Do too many deals end up in a “no decision” after you’ve invested considerable time, effort, and money? Do you want to know how you can win more reliably without inflating your selling costs?
The full frontal assault—going head-to-head with the competition like a couple of heavyweight prize fighters—is the default strategy for most sellers who pursue large opportunities. They try to match their opponent blow-by-blow and hope to be the last one standing. In the process of this brawl, organizations can throw a lot of company resources, time and expense at the opportunity. This can get costly, so going toe-to-toe might not be your be a strategy to win. What can sales leaders do to help their sellers win large opportunities without driving up selling costs?
Focus on the Right Opportunities
First, make sure they focus on the right opportunities. Pursuing large, strategic opportunities is very costly because there are a lot of moving parts, many stakeholders, and longer decision cycles. The hard and soft costs of large group meetings and conference calls, hopping on airplanes, staying in hotels, and entertaining add up fast. Also, when sellers are investing time on one opportunity, they won’t be spending time on others. This opportunity cost can be significant. It’s important to evaluate opportunities honestly and make the right decision to either win or withdraw early. Get in or get out, because even if you try to limit the costs of a sale, pursuing large deals are still a generally expensive proposition.
The reality is that “no decision” is probably the biggest competitor. In most cases, this really means losing to alternative uses of capital. Decisions get made at the top of the buyer’s organization for approval of initiatives to get prioritized, funded, and assigned resources. A “no decision” usually means that other initiatives were deemed more important, or of higher priority or higher value. It also usually means that someone in the buying organization had stronger political support for a different initiative. “No decision” situations tend to be significant blind spots for salespeople and cause havoc on forecast accuracy and sales support resource allocation.
Play or Don’t Play
To avoid losing slowly and consuming valuable resources on deals that a seller probably won’t win, help them review and evaluate opportunities from the C-suite’s perspective. One of the tools and concepts that we use to help clients do this is the Food Chain of Value. This tool helps salespeople link their solution to strategic imperatives in their customer’s business. It helps them to look beyond the operational problems and even the value delivered, to assess whether a sponsor is powerful enough to drive a project forward in their organization.
In other words, if your salespeople were to stack-rank the project and its sponsorship against other strategic comparatives in the buying organization, where would the initiative stand? Using the Food Chain of Value tool, salespeople learn to think “above the power line” – at the executive level – and think beyond their project to other initiatives that impact the customer’s business. This forces salespeople to ask themselves if the project or initiative is going to happen in comparison to everything else the company is prioritizing. It also forces them to question whether their sponsor is influential enough within their organization’s political landscape to get things done.
The more one thinks about these factors in the earlier parts of a sales cycle, the better. First, it helps to understand if there is a “Compelling Reason to Act” (CRTA) and a political reason to do the project. Second, understanding where one stands in the opportunity in comparison to competitors helps to illuminate what can be done to win. The intent is to win or “lose early”, and not over-invest in bad deals.
In summation, remember:
- Focus on the right opportunities.
- Play or don’t play. If you do play, don’t always lead with the same old tired message.
- Look to change the game by selling to the right strategic issues above the power line.
To help your sellers evaluate opportunities from a C-suite perspective, download our Food Chain of Value tool.