This is the second in a three-part series that outlines the seven most common sales mistakes you may be making and – most importantly, what you can do to avoid them.
Part I addressed Mistakes #1 & 2: letting leads go “cold” and failing to create urgency.
This post addresses Mistakes #3 – #5: Failing to “trial balloon” price in the first meeting, not talking directly with the true economic buyer, and taking too long to write the proposal.
Mistake #3: Failing to “trial balloon” a price in the first meeting
Every consultant I know dreads the fee conversation. They fear their number will be too high, and that their pricing will cause their prospect to reject their proposal and lose them the deal. Or worse, they may quote too low, under-valuing their services in the prospect’s eyes, also costing them the business.
It’s true, naming the price early is likely to create objections – not only to price but also the value of the project. Yet these objections are alive and in play whether or not you surface them, and only by surfacing them can you address them to maintain control of the sales conversation.
The best way to trial balloon price is to get your prospect to say “yes” to the business intention and project concept first, then test the price against the value they will receive. This conversation goes something like this:
“So, you’ve identified the need to increase sales by 25% this year. You feel that sales training will be important in arming your team to hit that goal. Did I get that right?”
“What I’ve proposed is a one-day sales training to include the topics we discussed, followed by a team call every-other week for a total of six weeks to review progress, overcome objections, and assist the team in putting what they’ve learned into action. Does that sound like a formula that will address your 25% sales increase goal?”
“For a sales training project of that magnitude, one that will run for six weeks and support your team in generating an additional $1M in sales, I would charge somewhere between $50 and $60K, depending on the number of people and up-front preparation. Is that investment in line with the value you expect to receive?”
At this point they will say yes or no. Or they may surface additional issues or negotiations; perhaps the stated price would be okay if the training spanned two days and you met weekly versus every other week. By navigating them into giving you a verbal yes or no, you will uncover any objections that exist and have the chance to deal with them live rather than have them fester and kill the deal in silence.
Mistake #4: Not talking directly with the true economic buyer
Once you have addressed the scope and trial-ballooned the offer, you need to determine who is really going to approve the deal and sign the check. An important key to success is to remain engaged and in control of the sales process even when your champion has bought into your proposal and begins to sell it internally.
How do you identify the true economic buyer? The best way to accomplish this is to ask a question about the approval process. You might say “Now that we’ve agreed on the project objectives, scope and fees, who else in your organization needs to green light this for the project to get approved? And help me understand that process internally. What steps are required? How much time will it take?” You may also want to understand from where the funds will come – whose budget will it hit, and whether they are budgeted already, or if your champion will have to raise the funds internally.
Once you have determined who else in the organization needs to ‘buy off’ on your proposal, you can begin to uncover potential objections that your champion may face during the internal selling process and help arm them to fight those objections.
For example, if your champion says his boss Sue needs to approve it, you can ask “If Sue was here now, what do you think she would say about the project and fee we discussed?” Ideally, you want to speak directly to the economic buyer when possible, especially if you sense that your champion is not well-equipped to overcome the objections. You can say “What I recommend is that we get on a call together to walk through the proposal with Sue. When do you want to schedule that call?”
Finally, you want to figure out what unexpected roadblocks might emerge to thwart the deal. You can ask “What, if anything, could get in the way of us getting this project approved so we can start next week?” Again, the ideal way to approach those objections is to advocate a team approach, where you will work in partnership with your champion to get things resolved.
Mistake #5: Taking too long to write a proposal
Your prospect is most ready to buy just after you have completed a successful sales meeting. In that meeting, you have identified a true need; created urgency; provided an overview of the project, milestone and deliverables you’ll create to solve the problem; and received verbal agreement on price. The time is NOW to seal the deal.
My advice to clients is to turn proposals around in 24 hours or less in order to maintain momentum and increase your probability of a rapid close. I estimate that for each day you wait to send off a proposal, the probability of closing the deal drops by 5-10%, because you run the risk of your prospect having second thoughts or manufacturing more objections, having their interest and urgency wane, and simply getting caught up in other things.
So how do you turn a proposal around quickly? The imperative is to understand the purpose of a proposal. That purpose is to provide only enough information to document the highlights of the project, without providing more detail than is needed. In fact, too much detail can extend a deal close because it creates more potential for revisions and changes.
The best practice is to compose a very short proposal, with the creation and approval of a detailed scope of work as the project’s first milestone. By doing so, you defer the details until after the proposal is signed – saving you time and minimizing the risk of the proposal taking you off-course.
Next Post: Mistake #6: Letting your proposal go into the “Black Hole” and Mistake #7: Not staying in control while overcoming objections.
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