The New Account Syndrome
The biggest handicap to increasing sales and market share is the inordinate amount of time sales people feel they have to spend getting new accounts. These are tough sales, second only to the toughest - trying to introduce new technology or new services to new accounts. ...The New Account Syndrome
The biggest handicap to increasing sales and market share is the inordinate amount of time sales people feel they have to spend getting new accounts. These are tough sales, second only to the toughest - trying to introduce new technology or new services to new accounts.
New accounts are tough because the sales person has no credibility or contacts to leverage the prospect forward. Yet, many sales people waste precious time pounding doors, cold calling and leaving advertisements to generate interest. Sales people cost too much to be used as an advertising arm of marketing. Besides the opportunity cost is very high, i.e. time lost that should be spent with existing accounts C-Level relationship selling.
Sales management must step up to the plate here. They have to set expectations about prospecting and hold sales people accountable for using their time commensurate with those expectations. Otherwise the weaker to average sales people will continue following the myth that they need to be cold calling and making lots of them. The better sales people discovered there is a far better way to make money.
The Request for Quote (RFP) Syndrome
Answering RFP’s is another time sink and waste of valuable selling time. If the sales team hasn’t been involved in the development of the RFP, they are at a significant disadvantage to the competitor that has. Even if the RFP was developed in-house or via a consultant, someone has influence and if it’s not you, you’re at a disadvantage.
Here’s my formula. Your best chance of winning a sale from an RFP’s is 1 divided by the number of bidders. So if there are 5 bidders, your best chance (if you haven’t helped with the RFP) is 20%. Best because someone did help and that vendor has a better than 20%. Meaning everyone else’s chances are less than 20%. My other benchmarks are: (1) Anyone can close 33% of the time, (2) Good sales people close 70% of the deals they choose to pursue. So do the math. What your chance for winning? Before you put lots of time and other resources into preparing a 14” proposal including drawing, pictures and dancing people, be sure you’ve got better than a 33% chance.
And don’t kid yourself that your reputation from past jobs or you status in the market place will increase your chances. If the selling team hasn’t gotten to the C-Level managers and/or the P/L leader to learn the real-time business issues or the real impetus behind the RFP, you won’t know how to set yourself up as the best alternative among the many. And if the C-level influential managers don’t have a professional relationship with you, you’re considered one-of-the-bunch who can all do good work. The bidder with the “in” wins.
Even if you submit the lowest price, you may not win because C-Level decision-makers don’t base decisions primarily on price – even though everyone said they will. Affordability can be an important criterion, but you’ll know that if you interview the senior level managers.
So be careful of RFP’s. They are appealing. But you’ll lose more often than not unless you’ve helped or you’re connected.
One tactic you can pursue with RFP’s is to insist (in a nice way) the main contact lets you interview all the people involved - especially the senior managers. Then your chances can go up significantly. It’s called “Energy for Energy” and goes like this. “I’d be happy to bid on your project, but in order to do this proposal justice, I will have to speak with all the people involved so that I can understand each person’s expectations of what the proposal should cover.” If they agree, then you can gather all the information necessary for you to show you’re the best solution. If they disagree, it sends you back to my formula. And don’t get sucked into the rationalization that then they will have to do it for everybody.
I’m in sales and my focus is on my existing customers. 90% of my time is with existing customers, spent learning, observing, interviewing, integrating and moving up. I use and develop my network.
As for new accounts, I outsource that task to a marketing company that does mailings, uses the internet, makes calls and qualifies. Once they’ve find contacts that’s admits to having selling problems, want to do something about their selling problems and fit my ideal profile, I’ll invest my time to see if I can fit into their solution images. I don’t chase new accounts and RFP’s. Unless a suspect fits the above criteria, I will let it pass. I invest my most valued asset - time - where I can make the most sales, that is C-Level relationship selling.
Everyone including you knows there is no selling strategy or method more powerful and effective for increasing sales than being connected to the right people. So start making your connections now. It’s easy if you know the steps.of the C-Level Relationship Selling Process.
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