As any given sales opportunity gets bigger, more strategic or expands across multiple divisions, it inevitably becomes more complicated to manage and more difficult to close. Every new variable brings with it the possibility of more potential, but also greater risk of loss or delay.
Among the potential headaches you should anticipate include:
- New players and organizations that come into the picture.
- Different budgets and purchasing rules that come into effect.
- New legal and contracting constraints that need to be addressed and mitigated.
These added factors make navigating to a successful outcome more difficult. (They also make things more interesting, but that’s a topic for another day.) Fundamental to reaching that successful outcome is an ability to anticipate, respond and guide the sale based on all these new and competing perspectives.
Step Back
Your ability to step back and think about the deal from the perspective of the various decisionmakers and influencers, one at a time, is a skill worth developing. Because the particular motivation for one constituent in the deal is often inconsistent with another, even if they’re in the same division or department, you need to weigh and address these different perspectives. To accurately understand and appreciate each person’s purchasing motivations, you need to be able to triangulate.
Triangulation, from a sales standpoint, is the concept of engaging with a broad, informed and influential group of contacts within a given account and then validating amongst them in order to determine the organizational (sales) reality.
The key assumption is that you’ve identified all of the decisionmakers and influencers in the deal. You also must be actively engaged with them individually and with adequate frequency. Individually because you want direct, candid and critical feedback. Adequate frequency because the sales situation is likely to be even more fluid, biased and fraught with political undercurrents than your run-of-the-mill sale. (Most big, expensive and strategic decisions are. Turf is being challenged, departments are being rewarded or punished, and organization/power structures can pivot significantly on the outcome of these deals.)
When selling to a large bank, I had a respectable license contract set to close during our third quarter. But in the process of doing my usual ‘selling by wandering around,’ a discussion with another division manager found them eager to jump onto the deal. As such software sales go, adding this this new group to the previous deal would decrease the per license price as the total contract value increased. In theory, everyone comes out ahead. So far, so good.
But the larger deal, now involving two different divisions, became a more complicated one for various reasons. Some of the software would be deployed in their foreign branches, which required a new contract review and a rash of edits and more legal work. The product mix wasn’t completely consistent between the two divisions, causing changes to the price schedule.
Finally, new approval processes were required that added to the delay, jeopardizing what had now become a December 31 signature under the best of circumstances. (The contract actually became even messier because my company’s various international sales teams learned where many of these licenses were to be deployed and started angling for commission credit.)
Get Personal
To orchestrate all these moving parts required staying in ongoing conversation with the various technical, management and trading groups involved in each of the divisions. One of the takeaways was that it was easier and more insightful to have a quick series of individual conversations than try to coordinate group status calls. More importantly, these one-on-one updates positioned me as a reliable communication channel between these quasi-competitive divisions.
This process enabled me to monitor the pulse of the sale as it dragged its way slowly into December. Despite these complexities, the delay remained manageable and all the deal terms were settled and executive approvals completed with a small cushion to spare. After a complex and protracted sales journey, I was assured that a purchase order for the entire contract could be expected any day.
But the fax machine sat idle and the purchase order didn’t materialize. Instead, I was told there would be a meeting with the vice president of purchasing scheduled for the last week of December. It was a formality, I’d been reassured. This particular purchasing executive made it a point of meeting the vendors whenever a contract exceeded a certain dollar threshold. I briefed my sales manager and we headed downtown to say hello and wish the VP a happy holiday.
But this VP had other ideas. After brief pleasantries, he explained that the purchase wasn’t approved and wouldn’t be unless we dropped the price by another ten percent. The specific threat was that this deal wasn’t going to happen if we didn’t comply and that they’d go with our direct competitor instead.
So here we are. It’s the last week of the fiscal year with an enormous contract hanging in the balance. I’m stuck in the impressive corner office of some executive issuing a plausible threat, pondering whether to acquiesce to the demand for an additional price cut. (A curious thing about software sales is that every extra dollar is essentially pure profit, so that the whole dynamic of discounting has a weird, theoretical feel to it. Thus, giving in on price isn’t the same when there’s no direct ‘raw material cost of sale.’ Or at least that’s how software salespeople often see the problem.)
Except that we didn’t acquiesce.
Knowledge is Power
Because we knew we didn’t have to. We knew that their engineering teams had already started developing, that the trading desks liked the functionality and that management had already bought off on the proposal.
Most importantly, we knew that they had serious production deadlines that would be jeopardized by a change in software. We even knew that the ten percent shake-down this VP was attempting was trivial compared the cost of any delay. (You can’t fault the guy for trying, though. As is often the case, he was measured and bonused based on how much savings he could squeeze out of vendors like us.)
Instead, I explained that we already negotiated the deal, had assurances from the business heads that the proposal was acceptable and that they were ready to move forward. “We’re sorry, but we can’t help you out here.” What followed was a tense back-and-forth conversation about pricing, other vendors, and rebidding the project. Finally, he wrapped up our meeting with a blunt statement that he wouldn’t be able to approve the deal. That it was effectively dead.
With the full backing of my boss, we chose to hang tough through the negotiation for two reasons: principle and money. Principle because we’d already negotiated in good faith with the senior executives that had the approval authority. I wanted to avoid undermining their reputations if some purchasing functionary bullied us into a different arrangement. And money because that ten percent loss in revenue was all commission overrides. Let’s just say it was significant.
A cloud hung over the rest of the holiday season as I’d effectively traded a deal that would have assured me hitting my quota for one that, theoretically, would have put me into some very attractive accelerators and propelled me into the annual sales club. Now I was looking at neither.
For the waning few days of the quarter I kept in touch with clients while wrapping up the typical year-end purchase orders. I also had now begrudgingly resigned myself to the realization that that my huge strategic win had flatlined.
And it was verifiably dead, until the morning of December 31st, when the fax machine kicked on and that glorious purchase order came through. For the full contract value.
While I’d like to say I knew all along that our take-it-or-leave-it strategy was a winner, mostly I felt like I’d dodged a bullet.
Still, it also felt good to be right. But being right wouldn’t have been possible if I hadn’t been triangulating among everyone involved and knew the situation from every important perspective. And the only way to do that is through lots of conversations with lots of different people and asking lots of different questions.
Questions like:
- What happens if this deal goes through? And if it doesn’t?
- How is the proposal being received?
- Where is the funding coming from? Is it one source or many?
- Who stands to gain (or lose) from this new initiative?
- What effect is there on staff, territory, status?
- Does anyone benefit/suffer from this decision (versus a different one, for example)?
Again, every deal is won in the day-to-day execution. It’s in these individual conversations where the selling really takes place, and it’s where your sale will either flourish or die. Skip these conversations and avoid thinking about how everything triangulates among those that have a stake in the outcome at your peril. Break it all down and that’s what makes the whole thing challenging, interesting and rewarding.
And fun.