Don’t lose sales you should win – connect the dots

Winning sales – connect the dots

Often a sale is lost even when the solution is a good fit because the salesperson fails to make the connection between the solution and the customer needs.  The seller gets Step 1 right – they develop a good understanding of the customer’s needs.  They also provide a good description of the solution so Step 2 is okay.  But they leave it to customer to connect the dots as to how the solution can effectively address the needs.

The remedy?  Sales people must take Step 3 by verifying that the customer perceives the connection between what they need and what is being proposed. It is particularly important in major sales where the need structure is multi-layered and the solution has multiple components.

Sometimes there is a more fundamental mistake – all the dots are not there.  The seller fails to delineate a comprehensive picture of all the business outcomes the solution can impact.

Even a small improvement can make a huge difference in sales won vs. lost. Perceived value really matters.  Let’s take a look at a simple framework salespeople can use to generate a comprehensive picture of the business outcomes for which their solution could bring value to the customer.

The most common benefit is cost reduction. It’s simple … if the client pays x now, but will be paying x-y, the cost savings are simple math.  But that’s not the only source of cost savings.  Companies can achieve cost savings through cost displacement and cost avoidance. Unfortunately, cost displacement and cost avoidance are less frequently discussed.

  • Cost savings arise fromcost displacement when current expense items are eliminated because of the proposed solutions. Some common areas of cost displacement are: reducing the number of people needed to perform a task, reducing manufacturing time, reducing processing time, and eliminating capital equipment currently in place.
  • A second source of cost savings arise from avoiding future expenses because of the proposed solution. This isn’t the same as cost displacement. Cost avoidance occurs because the proposed solution enables the company to expand their capabilities without adding resources. Like cost displacement, cost avoidance payoffs often come in terms of people, time, or equipment.

An additional set of benefits derives from the other side of the balance sheet – they stem from increasing revenues as a result of gaining operating efficiencies.  Some ways in which companies can increase revenues through operating more efficiently are: increasing the number of sales by processing more orders faster, reducing the number of orders lost to the competition by improving customer retention, expediting new pricing announcements, and improving customer service.

This is a story of customer focus and the importance of Value Maximization. Often in major sales there is a misalignment between the value you have proposed and the value perceived by the customer.  This is particularly telling because you may lose a sale for a reason that is totally within your control to avoid.

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About Richard Ruff

For more than 30 years Dr. Richard Ruff and Dr. Janet Spirer - the founders of Sales Horizons - have worked with the Fortune 1000 - such as UPS, Canon USA, Smith & Nephew, Boston Scientific, Owens & Minor, Textron - to design and develop sales training programs. During his career Dick has authored numerous articles related to sales effectiveness and co-authored "Managing Major Sales", a book about sales management, "Parlez-Vous Business" which helps sales people integrate the language of business into the sales process, and "Getting Partnering Right" – a research based work on the best practices for forming strategic selling alliances. Dr. Ruff received his Ph.D. in Organizational Psychology from the University of Tennessee and a B.S. from Rennsselaer Polytechnic Institute.
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