Sales Process – How to Avoid Wasting Time on Prospects
Who Can't or Won't Pay
by Alan Rigg
Published on this site: November 7th, 2005 - See
more articles from this month
Do you have blind faith that, if you can somehow convince
a prospect to engage in a sales cycle, you will eventually
make a sale? If you do, watch out! This belief can waste your
time, effort, and company resources.
Unfortunately, time and resource investments do not inevitably
produce sales. How many of the opportunities in your pipeline
have been stalled at the same step in the sales cycle for
weeks...or months? In how many opportunities have you and
your company invested enormous amounts of time, energy and
resources (conducting product demonstrations, writing lengthy
proposals, providing product evaluations, etc.), only to have
the prospect decide they don't want to buy, or prove incapable
of funding the purchase? Even when you make sales, how many
turn out to be "nightmare" customers who are always
dissatisfied and consume huge amounts of post-sale resources?
All Prospects Are not Created Equal
You do need to help your prospects explore whether their
business problems are substantial enough to justify investing
time in a sales cycle. However, you also need to figure out
whether each prospect is worthy of your time and resource
investments! If a prospect is not a good fit, gracefully exit
from the opportunity!(Why not refer them to a competitor and let the competitor
burn some cycles?)
How can you determine whether a prospect is worthy of your
time and resource investments? Many sales skills training
courses teach an acronym, M-A-N, that stands for Money, Authority,
and Need. The basic idea is to determine whether:
- The prospect is willing to commit enough budget dollars
(Money) to pay for the product or service
- The key decision makers and influencers (Authority) have
been identified; and
- The prospect's pain (Need) is severe enough to justify
investing in a solution.
Unfortunately, even when you do a good job of M-A-N qualification,
you can be "blindsided" by issues that delay sales
cycles or destroy opportunities outright. For example:
- Some prospects prove incapable of securing financing.
They may have a budget, but they are not "credit worthy",
so they can't fund the budget.
- Some decision makers need to have specific information
provided in a specific format before they can authorize
a buying decision.
- Sometimes you invest considerable time and effort in
troubleshooting complex problems and designing solutions,
only to be informed that the prospect must take the proposed
solution out to bid. This can lead to the opportunity being
lost to a low bidder or the profitability of the opportunity
being pummeled.
To avoid these issues, add additional questions to the M-A-N
qualification process. The acronym that I have assigned to
this revised process is M-A-I-N BP, which stands for Money,
Authority, Information, Need, and Buying Process. Here are
sample M-A-I-N BP questions:
Money
- How will your prospect pay for the product or service?
- Has a budget been established?
- Are they credit worthy?
Authority
- Who (in the prospect's organization) needs to approve
an acquisition of this nature?
Information
- What information do the decision makers require before
they can make a decision?
- What format does this information need to be in?
Need
- What are the prospect's business problems?
- How compelling are they? In other words, can you quantify
(associate dollars, percentages, and time frames with) the
pain the prospect is feeling?
- Are the quantified business impacts substantial enough
to warrant investment by the prospect's organization (and
your company) in identifying and fixing the problem(s)?
Buying Process
- What is the prospect's buying (procurement) process?
- What impact might this process have on the profitability
of the transaction?
- What competitive advantage will you receive if you invest
your time and resources in designing a solution that goes
out to bid?
If you decide to add M-A-I-N BP qualification to your sales
opportunity qualification process, here are some final thoughts
to keep in mind:
- If you don't know the answers to all of the M-A-I-N BP
questions, it is highly likely you are wasting your time
and resources!
- Opportunity qualification is not a one-time event. As
an opportunity advances through the sales cycle, you should
frequently ask whether any of the answers to the qualification
questions have changed. If an answer changes, it could impact
the length of the sales cycle and even destroy the viability
of the opportunity. At minimum, an answer change will probably
require a change in focus and/or a reprioritization of planned
activities.
- Never feel bad about disqualifying an "opportunity".
The amount of opportunity in each territory is virtually
unlimited. If you carefully qualify and re-qualify each
opportunity, and only invest time and resources in qualified
opportunities, you will maximize your return on time and
resources invested.
Sales performance expert Alan Rigg is the author of
How to Beat the 80/20 Rule in Selling: Why Most Salespeople
Don't Perform and What to Do About It. His company, 80/20
Sales Performance, helps business owners, executives, and
managers double sales by implementing The Right Formula™
for building top-performing sales teams. For more information
and more free sales and sales management tips, visit http://www.8020salesperformance.com
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