In my last corporate role I was the regional Managing Director of a global CRM software company and I inherited a wonderful customer who had bought from my predecessor about a year earlier. I quickly took the time to understand why they selected us. Many wrongly focus on loss reviews but I’m a big believer in win reviews because they are the key to identifying trigger events to help drive new business revenue. More on this later but first let me tell you a true story, a case study if you will, about why being the market leader can hurt you.
The customer is in the financial services sector with offices in more than 50 countries. They wanted to buy Customer Relationship Management (CRM) software and had a well-defined set of requirements and selection criteria. The CIO himself was the project manager and he personally led the evaluation and selection process. He had done all the right things to successfully implement a CRM initiative including an absolute focus on customer experience, strong buy-in from internal stakeholders and users, and the commitment of the CEO. They knew why they were implementing and adopted a ‘less is more’ approach. The CRM was to be the single source of truth about their end-customers and partner agents. The CIO subscribed very much to the principles of CRM success and was addressing change management with a simple phased approach to role-based functionality designed to enable their customer-centric processes.
The CIO did his homework and invited three vendors to participate in a closed tender process. It was completely transparent and fair. There was however a preference (there always is) and for one of the parties it was their deal to lose, but not for us – we were neither incumbent nor the favoured solution. But we weren’t just making up the numbers either. We had been invited for good reason. The CIO and his team had researched online and they had talked to a number of organizations who had already implemented various CRM solutions – with mixed results. The CIO was wise and humble enough to learn from the failure and success of others. This highlights why Social Selling 3.0 is so important – when buyers do their research, you want them to find you for all the right reasons.
Each of the shortlisted providers was very different in their philosophy to software development and delivery (open source, proprietary, cloud, hosted, on-premise, etc.). The correct assumption from the customer was that all of the providers could meet the product feature and function requirements. The issue was who could differentiate for best value and lowest risk in their eyes. CRM projects can be high risk and many fail – not on this CIOs watch, he knew exactly what he was looking for and what was needed to best manage risk.
The CIO provided unfettered access to people and information for all who were competing. He understood that risk comes from not knowing what you don’t know, and although he had researched thoroughly, he was very open to new information and ideas from the various sellers. But here is where he was rigid: “Don’t try to expand the scope of what we’re doing. Phase one and phase two are very clear. In your demonstration to the stakeholders you will have 2 hours only and you must stick to the script.” All providers were given as much time as they needed to prepare their live software demo.
The vendor who self-immolated themselves in the deal shall remain nameless and they have a fine CRM product which is a market leader, but here is where they went wrong. They made the assumption that the client viewed vendors in the top right corner of the Gartner Magic Quadrant (IT industry analyst report) as being lowest risk. This analyst quadrant rated vendors on their ‘ability to execute’ on one axis and ‘visionary’ on the other. The vendor told their prospective customer that their ranking made them lowest risk and it seems a reasonable assertion. But ‘telling is not selling’ and only the customer is really qualified to define and assess value and risk.
To contrast this, the person leading the sale on our side took the time to ask the CIO where he saw the risks in implementation and long-term success for the initiative. He asked what was important beyond the information in the tender document: What were they seeking to achieve and what business results needed to be delivered? Here’s the surprising piece of information that helped earn the business. The customer saw risk in dealing with a monolithic market leader where they [the customer] would have no real influence in product development or in the escalation of any issues during implementation and ongoing support.
We therefore positioned as being ‘in the Goldilocks zone’ – big enough to deliver but small enough for them to be an important customer. We introduced our Chief Technology Officer (CTO) to their CIO and they built a positive relationship. We also built trust by ensuring that we listened and responded exactly as they requested – no arrogance, no seeking to change the rules or agenda, no circumventing their process. We were the good guys, the ones who were easy to work with, the ones who were transparent and could fit in with their culture and be trusted to deliver on time and on budget. When presentation day came, we made it all about the customer and what they were seeking to achieve. We worked on helping them fall in love with our people, rather than our software. We explained how our solution could work for them and how we would work with them to manage risk and deliver – it was about cultural fit.
The self-destructive vendor, on the other hand, turned up to the presentation phase with people from another country who were flown in just for the demo. They then took almost an hour, half their allotted time, to present numerous slides about themselves and why they thought they were market leader. Then they proceeded to demo in a way that ignored the script and instead diverted attention to other ‘joys and wonders’ within their feature-rich system. The CIO stopped them and suspended the demo. He asked them to come back 4 hours later with a demo that was “as per the script”… they couldn’t do it – game over. Then there were two.
Here is the unintended message they sent to the potential customer. 1) We know better than you and that’s why we’re showing you what you really need to see… all these features that will confuse your staff and not enable your business objectives. 2) We don’t have anyone here locally who knows how to demo the product so we’ve had to fly people in from another country… good luck with local support during implementation. 3) We have no idea what’s really important to you in your evaluation and selection process so we’ll just bang on about ourselves for half of the time we’ve got available in the hope that something resonates. 4) We don’t respect you or really care and that’s why we didn’t listen to you or ask the right questions; it’s also why we chose to ignore your process. The vendor did not consciously think any of these things, perhaps they thought they were ‘challenging’ the client, resetting the agenda, elevating the vision for what could be achieved.
There is a time for challenging and there is a time for working within the customer’s process. Challenger Selling is valid but just as with any strategic selling framework, it usually requires early engagement to execute successfully. This deal required sellers to respect and work with the buyers’ well-conceived and thoroughly researched process.
In selling enterprise software solutions, you take your life into your hands every time you demo. Software can hang or be slow. Too many features and functions can confuse or create concerns about price or complexity of implementation and support. The context of what’s being shown can be lost and the evaluators in the room can easily become confused. In my opinion, anyone who leads with demos to create interest is making a huge mistake in complex B2B enterprise software sales. Instead focus on the problems you’re solving for the customer and the specific use-cases for defined roles.
My predecessor, the person who won this account, was Doug Erickson. He did a masterful job and built a genuine enduring relationship with the CIO that extended beyond working their professional contact. Doug understands that people buy from those they know, like and trust. He seeks alignment with buyers – people he likes and he took the time to listen carefully, to confirm his understanding, and then to provide a solution that exactly met their needs. He also made sure that his team rehearsed the demo and that it followed their script while also highlighting important strengths. Responsive, flexible, genuine, professional – selling really is that simple.
Winning is more about great execution than strategy but Doug also did something very smart. He positioned as being in the Goldilocks zone – big enough to deliver, small enough for them to be important. Even if you’re a huge multi-national market leader, position your division as being nimble, or your reseller or partner as being local and agile. Noone wants to be a tiny, unimportant customer. They instead want to know that they will have a voice and that you’ll be there when there are problems or challenges. Many companies do an excellent job of this, make sure you do too.
But I promised you more on why win reviews are more important than loss reviews. My friends Craig Elias and Tibor Shanto wrote a brilliant book, Shift, and it’s about trigger event selling. Here is an incredible insight they reveal: Most companies focus on loss reviews to figure out why they didn’t win, and it helps improve win rates when competing in future deals. That’s fair enough and loss reviews are not a waste of time. But win reviews uncover something much more valuable. They help you understand why the customer went to market to buy something in the first place, what happened inside their organization or market that drove them to purchase. Yes, they’ll share why you were comparatively better and why they bought from you over the competition; but the real gold is in knowing what trigger events caused them to buy anything at all. Now you have something to look for in the marketplace as indicators of opportunity. Now you understand what problem or circumstance actually creates opportunity.
Know what an ideal customer looks like. What are their organizational characteristics, technical attributes, market dynamics, and what do they need to believe to fit your ideal profile? Seek alignment in how you build a pipeline and sell – it’s much more efficient and effective than being an evangelist or pioneer. When you find the right prospective customer, build a relationship of trust and value that earns the right to challenge and set an agenda.
Tony Hughes is ranked as the #1 influencer on professional selling in Asia-Pacific and is a keynote speaker and best selling author. This article was originally published in LinkedIn where you can also follow Tony’s award winning blog. Also visit Tony’s keynote speaker website at www.TonyHughes.com.au or his sales methodology website at http://www.rsvpselling.com/.
Main image photo by Flickr: Nic Redhead
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Tony is ranked the #1 influencer on professional selling by Top Sales World Magazine and is a best selling author and international keynote speaker. He helps business-to-business (B2B) sales teams modernise the way they sell by 'leading with why' and then embracing social media platforms such as LinkedIn to build strong personal brands capable of creating pipeline and setting an agenda of insight and value. Tony seeks to elevate leadership and professional selling for a Better Business World and has over 60,000 followers of his award winning blog within LinkedIn (https://www.linkedin.com/today/posts/hughestony). Tony's methodologies for creating sales pipeline and managing complex enterprise opportunities have deliver hundreds of millions of revenue for his clients who include Oracle, Orange Business Services, BOC Gases, Nufarm, Peer 1, and many others. Whether your revenue issues stem from strategy or execution, process or methodology, skills or discipline; Tony can help enable the transformation of sales people and results with a modernised approach to creating pipeline and managing the complex sale.