B2B buyers--please tell the losers why they lost

I've worked on a lot of sales proposals over the years. It works this way: a company needing to buy supplies, services or products invites a number of companies to bid on the business. Frequently, they'll develop Requests for Proposal laying out all their needs, criteria, etc. Companies submit their proposals, and over several iterations, the buyer selects.

It's, as succinctly described by Harvard's John Quelch, a winner-takes-all contest.

Problem is, there are many losers in that contest. Depending on the industry, perhaps only one out of ten proposals results in a sale. It's a terribly opaque process for the bidders (which opacity benefits the buyer). Not surprisingly, sellers view "the RFP process" as undesirable and frequently unfair.

There are countless systems for increasing your company's odds of winning proposals. Identifying the power base, deploying flanking strategies, etc. Dave Stein at ES Research can help you sort through who offers these services, if that's your aim.

I'm interested in something else. How to extract value out of a losing proposal. And it'll take some behavior changes on the buyer's side. Ready?

I've been working more on the consumer-marketing side recently, and I am amazed by the following: companies really want to know how customers use products and why they buy the way they do, and customers, by and large, are willing to tell them.

On the B2B side, it couldn't be more different. Losing bidders are frequently afraid to ask or eager to look forward to new opportunities. Buyers don't want to dwell on the process after it's done, nor do they want to spend time with a bunch of bidders asking questions or, worse, trying to rescue a losing sale.

It's got to change, and here are two reasons why: (1) a failed proposal effort is expensive for the seller, and (2) lousy proposals are costly for buyers. The process needs to be mined for all the value possible. Insight is the most valuable mineral in a failed proposal effort. Why did I lose? What did I do wrong? What did I misinterpret? How do you view our product/service against our competitors? What was most important to you? What was less so?

The answers to these questions are the B2B equivalent of consumer market research. It's not enough to ask those who selected you why they did (though that's rarely done, either). It's even worse to make assumptions, but that's what I've experienced, or committed, most. "The product was insufficient." "They didn't like our terms." etc. are only meaningful if they reflect the true thoughts of the client.

So: buyers need to have after-sales reviews with each losing bidder, explaining (without violating confidentiality provisions) why they chose the way they did, and what the bidder could do differently to improve its chances next time.

Losing sellers need to listen with open ears, seek clarification and elaboration, not challenge the decision nor try to reopen the process. (It might be less threatening if disinterested parties attended these sessions, not the lead salesperson.)

Putting this simple protocol in place will help buyers make better decisions, and sellers create better products, services, and proposals.

Please weigh in with your thoughts. Email me (john at caddellinsightgroup dot com) or twitter me (@jmcaddell) if you'd like to discuss this idea more.

sales, B2B, proposals, postmortem

Jill Konrath Mistake Story #3 - 5 minutes to engage a prospect, and nothing to say...plus losing your cool

From The Mistake Bank, our final sales mistake story from "Selling to Big Companies" author Jill Konrath.

When I walked in the front door of The Kaplan Company, there were at least 30 desks filled with women who were busy doing order entry and handling customer service issues.

I told the receptionist that I wanted to speak to the person who made copier decisions. After a quick check with the boss, she escorted me past all those working women into his office.
"Sit down," he said gruffly. "You've got 5 minutes. Talk."

"If you're busy, I'll come back later," I said, trying to be gracious.

"Nope," he stated. " 5 minutes. Tell me why I should buy your product. Your 5 minutes is starting now."

I mumbled. I stumbled. I tried to engage him in conversation. I tried to explain that I needed more time. He wasn't one bit interested. After 5 minutes, he arose and said, "Your time is up. You can leave now."

That ticked me off. I told him he was rude and obnoxious. Then I turned and stormed out of his office past all those women, shouting back at him, "I'll never sell you a Xerox machine. You don't deserve to work with Xerox."

I know it's hard to believe, but I really did lose my cool. And I'm also sure that guy never wanted to work with Xerox again. But he had a point. I couldn't concisely state why he should listen to me.

I wanted to build a relationship and warm up the call. That made me feel better. He was a busy man who chose to use his time judiciously. I didn't respect his needs. After that cold-calling disaster, I learned to net it out. That lesson is even more important today than it was years ago....

The hardest thing in the world is to look at your own complicity in the situation, yet that's where the maximum growth is for you and ultimately, the key to your long-term sales success.

Related Posts:
Jill Konrath Mistake Story #1
Jill Konrath Mistake Story #2

Tags:
Mistake Bank, narrative, time, time pressure, B2B, sales, cold calling, elevator pitch, B2B

Jill Konrath Sales Mistake Story #2 - How NOT to get to higher-level decisionmakers

From The Mistake Bank, another sales mistake story from "Selling to Big Companies" author Jill Konrath.

One of the prospects I uncovered while cold-calling was Trussbilt, a company directly across Como Avenue from Quality Products....

Back then, I was working with Tinsey, a very articulate woman who told me she was in charge of the copier decision. Shortly after our first meeting, I read a book that said salespeople should only work with the top dogs - not their underlings.

Since my contact was an administrative assistant, I realized I needed to rectify the situation immediately. I called Mr. Big directly and set up a time to meet. Then I prepared like crazy to ensure I did a great job.

Unfortunately, I never had a chance to capitalize on this opportunity. Tinsey came to the lobby to escort her boss's visitor to his office. When saw me, she demanded to know why I was there.

"I'm here to see Mr. Big," I replied, suddenly not so sure if the tactic I'd taken was appropriate. I was right. She proceeded to yell at me like I've never been yelled at before.

I was appalled. Mortified. And suddenly very light-headed and shaky. I fainted dead away right there in the middle of the lobby.

As you can imagine, I never did business with Tinsey or Trussbilt. But I sure did learn that once you're working with someone it's never appropriate to go around them without their knowledge. They'll get mad. Furious. It's a normal human reaction.

Today, to ensure my ability to work with whomever I want in an account, I always tell prospects, "Usually when I'm working with clients, I need to talk with the VP of Sales, Regional Sales Directors and sometimes even Marketing." Doing it this way prevents the people problems that can derail your sales efforts.

Related Post:
Jill Konrath Mistake Story #1

Tags:
Mistake Bank, narrative, inexperience, sales, calling high, B2B

Jill Konrath Sales Mistake Story #1 - When paralyzed by fear, get moving

Mistake Bank member Jill Konrath has written about a few of her selling mistakes on her blog, Selling to Big Companies. She's kindly allowed us to post them here. The first story follows:

After finishing the Xerox training program, I was assigned to follow Jim Farrell for several weeks to learn the ropes. But finally the day came when I was sent out on my own.

At 9 a.m., I pulled up in front of Quality Products to begin my cold calls. But I couldn't get out. I was terrified and tongue-tied, convinced that my sales career was over before it even began.

After nearly 30 minutes of being paralyzed in my seat, a song wiggled its way into my mind: "I Have Confidence" from the movie, The Sound of Music.

I started singing to myself, quietly at first, then louder and louder. I was particularly enamored with the refrain, "I have confidence in confidence alone, and as you can see, I have confidence in me."

I really didn't believe the words, but they got me moving off my "stuckness." I pulled out my cold call plan that I'd studiously prepared the night before and reviewed it. I practiced my opening lines again and again.

Then I got out of the car and went in. By the end of the day, I'd made over 20 cold calls and uncovered some potential prospects.

Over the years, I've been confronted with many tough situations that I didn't know how to handle because I lacked the requisite knowledge or experience. I've learned that you can't know everything before you start. And I've also learned that "movement" is key to discovering the answers.

Tags:
Mistake Bank, narrative, inexperience, sales, cold calling, B2B

Channel partners are not your direct sales force

There's a nice post over at the Achieve Market Leadership blog talking about why B2B companies struggle to sell through channel partners. In sum, companies treat channel partners as if they were direct sales forces, instead of treating them like retailers.

A direct sales force sells what the company has. It has no option to sell anything else.

Retailers pick and choose which products they stock, decide where to place them, and simply remove those that don't sell enough. Companies selling through retail realize they need to entice their retailers, either with incentives, great product, or pull-through marketing.

Channel partners often don't have issues with shelf space, but they still decide which products to recommend to customers. If you treat them like a captive sales force, you will be blind to their priorities and issues. As a result, your program won't fit what they need, and they won't push your product.

There's a lot more in the post. It's well worth reading in full.

sales, channels, alliances, indirect sales, B2b

The value of B2B brands

Jon Miller of the Marketo blog has a very powerful post refuting some people's belief that B2B brands don't matter, and that investing in brand-building is a waste of money for B2B companies.

I'd go as far as to say that anyone who thinks that brands don't matter in business-to-business sales hasn't sold to many businesses. And certainly hasn't been involved in buying much for their companies.

In my experience, selling with a well-established brand behind me is much easier than selling an unknown brand. And buying a well-established brand conveys stability, longevity, predictability and a measure of security.

By way of the evidence of B2B brands' value, I'd point readers to the March Harvard Business Review, in which James Gregory of CoreBrand and Donald Sexton of Columbia University describe their method for calculating the brand equity of business-to-business companies. (A free copy is available by following this link.) Sexton and Gregory concluded there were significant deltas in brand equity between leading companies and lagging companies across many B2B industry groups. For instance, in the Office Equipment category, brand equity ranged from 18.37% of market cap (highest) to 4.26% of market cap (lowest).

If B2B brands are meaningless, how then to explain the differences in brand equity these statistics illustrate?

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branding, B2B, brand equity, Harvard Business Review