When Is A Prospect Not a Prospect?
Lee Levitt
Managing Director
Most prospects in the
sales pipeline are not really prospects, but placeholders as they never
actually close. Their expected close date keeps moving, always staying 2-4
months out, Unwilling to give up, the sales person invests more and more
time in the prospect and nothing ever comes of the relationship.
This lack of closure
causes several major problems:
- The company wastes
time, effort and money with these “phantom” prospects.
- Poor sales revenue
forecasting keeps the company from planning a range of activities
effectively, from manufacturing to hiring.
- The sales
organization and individual sales people lose credibility, and are
unable to get resources for “real” prospects.
Why do these
prospects never close?
This is the key
question…and the answer underscores the complaining frequently heard. Do
any of these sound familiar?
The sales cycle is too long
Our close rates are too low
Our prospects don’t understand our
product
Our sales people don’t understand our
product
And our current
favorite: It’s the lousy economy. Nobody’s buying anything.
In many cases, we have
found these
complaints to be symptomatic of two basic problems:
- The company’s unique
selling proposition (USP) is not working. It’s not compelling, it
doesn’t match a customer’s “pain” or significant problem, or it doesn’t
properly describe the product or service.
- The company has
little or no sales feedback loop. The sales process is not properly
documented and instrumented, the sales trends aren’t being analyzed by
either sales or company management, and there’s no effective
relationship between sales, marketing and product or service management.
How do you ensure high
quality prospects in your sales pipeline? It takes a simple two
step process that most companies cannot complete without assistance. In
this article, we will explore the issue of developing a unique selling
proposition. We will discuss the management of the selling process in a
future article.
Defining Your Unique
Selling Proposition
If
you build it, they will come – Not!
Many technology
companies create products or services based on the company’s internal view
of the world – their understanding of the technical possibility of a
product…the challenge of building something that has never been built
before.
Some products are
built to meet the need of a very small group of customers or internal
customers with no real-world corollary.
Frequently, the product
development lifecycle includes little or no opportunity for real external
customer feedback. The product is created and tested in a vacuum, with
features appealing to the technologists as opposed to the eventual end
users.
The marketing of these
products tends to focus on “speeds and feeds” – the technical details of
the product rather than the benefits to the end user. And benefits to the
end user are typically stated in business terms that involve revenue
increases, time to market, or cost decreases…terms alien to the technology
marketers.
Why should your
customer care?
An iterative
process can be used to find a match between a company’s product or service and the
customer’s pain. It involves a process of identifying the unique
attributes of the product or service and the corresponding significant
technical or business issues in the customer base. Company
management, experienced sales people, and others involved with product or
service delivery all participate in the process.
As intangibles, service offerings represent
a greater challenge. The unique attributes of a service
are identified through a focused process of discovery with both the organization and a
few representative clients.
Ideally, of course, the
process would work the other way round…with the company conducting
research to determine the customers’ needs and then designing and
building a product or service to meet those needs. However, in the real
world, many products and services are launched with only a cursory
acknowledgement of customer need.
In this case, customers
are interviewed to understand their pain – the problems they are
having, constraints on the growth of the business, and the importance of
the problem to the overall business. The benefits of the
company’s offering are then mapped to the corresponding pain felt by the company.
When the company’s
USP is compelling and the “best” prospects are being
targeted, sales cycles are short and close rates are high. Sales
people quickly and efficiently connect the company’s benefits to the
customer’s pain, and the customers move swiftly through the sales
pipeline.
It’s a beautiful thing!
. . .
Comments on this article appreciated
Article Copyright 2002,
The Acelera Group. All rights reserved.
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