9 Reasons Why Tech Salespeople Lose Deals (& How to Avoid Them)

Sales Intelligence DiscoverOrg
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As part of the sales effectiveness consulting and win-loss analysis I conduct on behalf of my clients, I have had the privilege of interviewing over one thousand key information technology and business services decision makers. You’ll find many excerpts from these interviews in my new book titled Heavy Hitter I.T. Sales Strategy: Competitive Insights from Interviews with 1,000+ Key Information Technology Decision Makers and Top Technology Salespeople. How technology evaluators describe their selection process and why they made their final decision is always fascinating. One of the most interesting parts of these interviews is learning why the competing salespeople lost.

There’s a tendency to assume that the losing salespeople lacked the sales prowess that the winner possessed, or their product was inferior in some way. However, in the overwhelming majority of the interviews the evaluators ranked all the competing salespeople and the feature sets of their products as being roughly equal. This suggests that other factors separate the winner from the losers, with some being out of the salesperson’s control. These key factors are described below and accompanied by a corresponding win-loss study interview quote.

1. Incumbent advantage. The incumbent vendor has a huge sales cycle advantage and the tendency to win business by default. Based upon my research, the odds of unseating an incumbent vendor are typically about one in five.

It’s a pain to switch vendors. It’s a pain to analyze whether you should or not. We naturally prefer working with our existing vendors.

—Vice President of Purchasing

2. Inability to remove risk. Customers are never 100 percent sure they are purchasing the right product. Regardless of their confident demeanor, on the inside they experience fear, uncertainty, and doubt. The ability to remove perceived risk plays a key role in determining who wins the deal.

It sorts itself out pretty fast—those who will and won’t make it with us. We are a big company, so there’s always a tendency to go with the big players. Who are your proven big-time customers? What resources do you have to get something fixed? 

—Chief Operating Officer

3. C-level executive access. Because every major purchase involves executive level approval, a salesperson’s goal is always to connect with a busy executive and conduct a meaningful face-to-face meeting. However, one of the toughest jobs in sales is to penetrate the C-suite, but the return is worth the effort. There is a direct correlation of winning to the number of interactions the salesperson has with executives during the sales cycle.

Every salesperson is trying to get into my office and explain how their wonderful products will save me tons of money. Very few do because most don’t understand what it takes to sit across the table from me.

—Chief Executive Officer

4. Business solution focus. A common theme is that both the winning and losing salespeople knew their products very well. However, winners were better able to prove their value as a business partner with the expertise to solve the customer’s problem.

What’s wrong with salespeople is they’re typically selling a product. I don’t need a product unless it solves one of my business problems.

—President

5. Ineffective messaging. Successful communication is the cornerstone of all sales. Winners have the ability to tailor compelling messages that resonate with the evaluators across the organization and decision makers up and down the chain of command.

We are a skeptical group, and they lost the deal during their presentation. They said they were different and much better than what we have, but they didn’t provide enough proof. What they said didn’t really apply to us.

—Chief Financial Officer

6. Poor presales resources. The complex sales process is typically a team effort that involves presales technical experts. Losers were often cited as having inferior presales resources and – equally important – the lack of knowledgeable experts who attended meetings throughout the sales cycle.

The vendor we chose has a group of smart, dedicated, and customer-oriented people. To a great degree, I don’t think their products and services are different from their competitors’. They distinguish themselves with their people.

—Vice President of Supply Chain

7. Lack of an internal coach. A clear difference between winners and losers is that the winners developed an internal “coach” within the account. Coaches are evaluators who provide proprietary information about the selection process, status of the competition, and help the salesperson determine his course of action.

Anytime we had a question, the sales rep attacked it. He would get his people on the phone within a day to answer how we could do something. He listened to what we were trying to do and he knew his resources. He earned our trust so we were much more open with him.

—Chief Information Officer

8. Out-of-range pricing. Time after time, interviewees reported they did not pick the lowest cost option. Savvy evaluators realize there will always be a low bidder. However, there is an acceptable price range the prospect is willing to pay and this can be anywhere from 10 to 25 percent higher than the lowest proposal (depending upon industry and products). Solutions priced outside of this boundary are rarely selected.

Price is always important, but we did not buy the lowest priced solution. Many other factors, including the fit between organizations, render pricing to a secondary factor. With that said, I never want to buy the highest priced solution.

—Vice President of Technology 

9. They are outsold! Winning salespeople establish their credibility and maintain account control. Losers operate in a world based on incomplete information and ineffective sales execution.

I can tell you what makes a bad rep. They don’t come prepared when they see me. They don’t understand my business. They don’t research what we have in place or understand what challenges we might be facing. They want us to do the legwork and educate them about everything and I don’t have the time. If you don’t know what you are asking me for and why you are asking about it, forget it. Great reps have done their homework, so when they are in my office they can talk to me knowledgeably. They cut the bull. They don’t tell me they can do things they can’t. They’re honest.  

—IT Manager

Losing is always a frustrating, humbling, and embarrassing event. If you find yourself in this circumstance, it’s time to ask yourself if any of these factors above were at the root cause of your loss.

If you are interested in hearing more sales insight, attend the Advanced Strategies for New I.T. Account Penetration webinar, November 12 at 10 a.m. PST / 1 p.m. EST. Click here to register.

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 About Steve W. Martin

Steve MartinSteve W. Martin is an expert on the human nature and politics of technology sales. His “Heavy Hitter” series of books for senior salespeople has helped over 100,000 salespeople become top revenue producers. His new book is titled Heavy Hitter I.T. Sales Strategy: Competitive Insights from Interviews with 1,000+ Key Information Technology Decision Makers and Top Technology Salespeople. Steve is a regular contributor to the Harvard Business Review and teaches at the University of Southern California Marshall School of Business MBA Program. You can learn more about Steve at www.stevewmartin.com.

 

Henry has over 11 years of experience managing the sales and marketing activities of fast growing Information Technology ..read more