Today's post is by Kevin Doddrell, executive vice president of Revenue Storm, a global sales consulting and revenue acceleration firm. See more published articles by Kevin Doddrell at http://www.revenuestorm.com/insights/articles/.
Tom, recently appointed as sales leader at the rapidly growing ACME Company, was confident that his deal with Smith Manufacturing was in the bag. At $1.1 million, this deal would secure his numbers for the next quarter.
Tom had a strong relationship with Howard, who had been the chief financial officer at Smith Manufacturing for many years. Howard was well respected by nearly everyone in the company, and he had the ear of the CEO, Jack Smith (whom Tom had met only once). Howard was enthusiastic about the ACME solution and had even shared a number of confidential internal issues with him.
Meanwhile, Frank – the recently appointed chief information officer at Smith Manufacturing – was definitely not an advocate of ACME. In previous roles, he had given unequivocal support to ACME’s far larger and very aggressive competitor – the only competitor left in the race.
Despite the presence of the competitor, Tom felt calm as he returned from this year’s annual sales conference. He checked off his list mentally. He had produced a great proposal (of which he was personally proud), and the messaging was right in Smith Manufacturing’s sweet spot. He knew his price was more expensive, but he felt comfortable that he had clearly articulated the additional benefits and how they were justified. He definitely knew that the proof of concept had gone really well. Overall, he was highly confident they would win on the strength of the ACME solution.
The phone call came in after the Smith Manufacturing board meeting, and the news was a shock. Howard soberly told Tom that – because he and Frank were at odds about which solution to purchase – the CEO had made the decision. Jack had chosen to go with ACME’s competitor, because their price was significantly lower. Tom was devastated.
After his phone call with Howard, Tom went into deep thought. After some time, he picked up the phone and dialed Jack Smith.
“Mr. Smith, this is Tom from ACME. Howard called and gave me the news today that you had made your decision, which I fully respect. We have enjoyed a great relationship with your team. I have one question for you. We invested heavily in the proof of concept, and I was wondering if I could have 30 minutes face to face to get some feedback so we can learn from the experience.”
“Sure, Tom,” said Jack. “I’m available at 3 tomorrow.”
Settling into the boardroom at the appointed hour, Jack and Tom discussed the solutions of both ACME and its competitor, including their respective market positions and pricing. Tom decided the time was right.
“Mr. Smith, do you mind if I’m very transparent with you? I’m not sure if we know each other well enough, but I really need to say something important.”
Seeing Jack nod, Tom took a deep breath and thought, Well, here goes nothing.
“Unfortunately, Mr. Smith, because of the way this deal was decided, your purchase decision now has implications beyond the relative value each solution can provide.”
Jack seemed slightly confused but clearly intrigued. “What do you mean?” he asked.
“Well, this has ended up being a game of winners and losers internally,” said Tom. “It’s my opinion that, due to their strong feelings, Howard and Frank will have trouble surviving emotionally in the same environment. I don’t think they’ll be able to work cohesively together on the executive team. The decision you made was not an IT decision. It was, in fact, a political decision about which executive you want to keep, and which one you’re prepared to see go. Because the loser inevitably will leave here.”
Tom knew that, after hearing this, Jack now had to make a difficult decision. Would he want to keep Howard on the team? Or Frank? Tom watched Jack carefully, but the CEO’s expression was unreadable, and he shared nothing about his thoughts. Instead, he thanked Tom for his time and calmly brought the meeting to a close.
As Tom sat in his office the next morning, he kept wondering if he had annoyed Jack. Presently, he received a phone call from Howard.
“I don’t know what you said to Jack,” said Howard. “But he’s asked me to come and meet with you. I have a number of criteria in front of me that he would like you to meet. They do not seem onerous and I believe you should easily be able to meet them.”
“Does it include price?” asked Tom.
“A very small concession, but you guys still carry a serious premium in the cost case. Anyhow, he does not want me to talk to anyone other than you and he wants the answer today. If we can meet them, he will call an emergency board meeting tomorrow and sign tomorrow afternoon. We would then inform the other competitor.”
Tom now understood that Jack had taken his words to heart and decided to prioritize his relationship with Howard rather than his CIO. The deal was turned around and, sure enough, Frank soon resigned.
What are the key learnings for salespeople?
- Often the first decision (even if made on the customer’s sound logic) can be turned around by introducing other considerations. In this case, that consideration was the political implication of the CEO’s purchase choice.
- Tom made an early mistake by feeling too comfortable with his position – salespeople should always retain a healthy pragmatism. Don’t view your deal through rose-colored glasses.
- And, of course, remember the biggest lesson: it’s not over ’til it’s over! Always ask for a face-to-face meeting after you receive word that the customer is going with another vendor. You might just get the chance to save your deal.