Sales

Was it Price, Product or Something Else That Lost You the Sale?

Was it Price, Product or Something Else That Lost You the Sale?
Image credit: Shutterstock
  • ---Shares
Reader Resource

Get the working capital your business needs–learn more about Entrepreneur Lending, powered by CAN Capital »

Often times after a painful loss (large transaction/long sales cycle), sellers will be asked to find out why they lost in hopes of getting smarter about things to do or avoid. While that all seems to be logical, the reality is that it is difficult to find out why a seller loses.

Informing sellers that they’ve lost in an odd or unpleasant way is analogous to trying to make a clean break from someone you were dating in school. The person who wants to end the relationship tries to leave little room for discussion. One of the more effective techniques in achieving this goal was for the person wanting to end the relationship to say, “I’m not good enough. You deserve better.” or another commonly used excuse, “It’s not you, it’s me.” This leaves virtually nothing to talk about or discuss, is self-deprecating and places no blame on the person being dumped.

In a similar fashion, when a company has evaluated four vendors and chooses the winner, they have to deliver bad news to the other three vendors and want to do it in a way that closes things down quickly. To start, a white lie softens the blow: “We’ve chosen another vendor but wanted you to know it was a difficult decision and unfortunately you came in second.” While usually unaware, it’s as though all eliminated vendors wind up in a three-way tie.

Related: 4 Sales Strategies to Increase Your Average B2B Deal Sizes

The most common reasons given for losses are:

  • “The pricing was very close. If only you had been a little cheaper.Some sellers take this at face value and blame price for the loss. When you step back, had you been the vendor of choice you would have been given a chance to ”sharpen your pencil.” In my mind the only time sellers can blame price for losses is when the buyer gave them a number that they couldn’t meet.
  • Another way to let sellers down is to say: “It was a hard decision. If only you had (a feature name) this could have had a different outcome. That’s why I chose Vendor A and you were a close second.” Once again it may be time to step back. If you spend a great deal of time in this opportunity and didn't realize there was a key feature that you were missing, then this opportunity wasn’t qualified.

Beyond that, there are times when the feature cited wasn’t the cause of the loss. In my experience, I see many sellers file loss reports and are relieved to be able to pass along features as reasons for losses. Sadly, there are occasions where changes in offerings are made that still won’t make much of a difference.

Most of the time I believe the primary reason opportunities are lost is that sellers get out-sold. Rest assured, few if any buyers would share that with a salesperson. Most people will choose to avoid uncomfortable conversations.

Related: 7 Psychological Strategies for Mastering Sales Negotiations

Start high, establish value and payback.

"A" Players know that if value and payback have not been established, the possibility of “no decision” outcomes or a foreseeable loss to a named competitor looms. To avoid losses, sellers should start high with key players. This top-down approach sets sellers up to be "Column A" and avoid those uncomfortable “break-up” conversations later.

The challenge is that there must be proactive contacts with levels that are high enough to fund unbudgeted initiatives. If successful, the benefits of starting at key player levels are significant:

  • Sellers have the ability to target companies that fit desirable profiles.
  • Larger opportunities are likely because budget can be found.
  • Sales cycles will likely be shorter when starting at high levels.
  • If value isn’t established, early key players will withdraw (bad news early is good news).
  • Rather than wait for inbound leads, sellers can control the quality of their pipelines.

Related: 6 Strategies For Overcoming Buyer Hesitation in B2B Sales

The most significant advantage of proactively taking key players from latent to active needs is that sellers can enjoy the benefits of starting buying cycles as "Column A." Better yet? They don’t have to hear buyers give excuses for why they lost. In this buyer-driven (not product-driven) world, I’ve said it before and I’ll say it again: The seller/vendor who can create a superior buying experience will win the business.