There are many signs that the economy is turning for the better; the Dow Jones index is at a three year high, consumer spending is also at a three year high and from my own perspective, my entire customer list exceeded their operating plans for 2010. No small feat for a group of companies that was responsible for over $3 billion in revenues for 2010. Surprisingly, as the economy continues to improve, the transition can catch many sales professionals on their heels if they don't keep the contrast in perspective. Although it seems counterintuitive, their productivity can decrease as the economy improves. This article is about one of those potholes.
With purse strings loosening up, there are many B2B buyers who now have a little money to spend, but not always enough to warrant your time, or enough to cover all the solutions they need to improve their business. This creates a risk in time management and overall productivity. While these buyers may feel empowered because they now have the green light to start spending a little more, they could end up being a waste of time for many sellers.
During a slow economy, many sellers hone their qualifying skills, but during a positive economic transition, sharpening their disqualifying skills may be just as important. Disqualifying is the skill of determining when to walk away from a prospect, even when they are demonstrating strong interest. After all, a prospect who doesn't buy is actually robbing the seller twice. First they take your time without a return on your investment, and second, they take your time away from another prospect that could have made a purchase.
To understand disqualification, we'll start with the definition of a qualified buyer. In the simplest terms, a qualified prospect has to have enough money available (notice I didn't say "budget", since this can be overcome with higher authority levels), and has an urgent issue that needs to be resolved because it's costing their company money or lost opportunity.
Using this definition, consider getting answers to the following three questions:
- What business issue is driving you to look at this solution?
- What underlying people/process/technology challenges are making this business issue difficult to resolve?
- What's the impact of addressing or not addressing this issue?
The first question helps to uncover if there is a strategic aspect to the situation. This helps to open doors higher in the organization to secure executive level sponsorship, especially if lower level budgets are not sufficient to cover the cost of your solution. The second question helps you to establish the basis for your differentiation in the face of direct competition. You are looking for problems that only your solution can address, or addresses better than the competition. And the third question helps to prioritize your initiative over other initiatives that may not be directly competitive to your capabilities but are competitive as an alternate use of funds.
Should you find yourself in the common situation where the prospect contact doesn't have the answer to any or all of these questions there is a fall back question:
- Can you introduce me to someone who could answer these questions?
The answer to this question is the true test of the potential for a wasting your time. If the contact denies an introduction and can't answer all of the first three questions effectively, you have a high probability for a "no decision" outcome. This is a situation where you should finesse them back into the lead nurturing queue and target them for follow up next quarter or the one after. If they agree to take you to another contact in their organization, repeat the same process until you are able to qualify the prospect.
As the economy heats up, you are bound to have more people that are willing to talk to you than you probably encountered in the previous three years. While this may feel great and be an encouraging sign, it can also become a productivity challenge, especially if your quota assignment has increased significantly. Disqualifying those contacts that don't have a high probability for a purchase can open up more time for prospects than can buy, and buy in higher amounts.
One of our clients is citing 20% more deals per rep as a result of their focus on disqualifying leads that can't answer these basic questions or refuse to engage other stakeholders that can. They are also tracking 19% higher average contract value by focusing on opportunities where they are more strategic to the customer's business. Imagine what your productivity would be if you closed 20% more opportunities than you did last year with a 19% higher contract value!
Are you committed to avoiding one of the most significant sales potholes in 2011? Then start disqualifying some of your prospects.