Let me ask you something: What do you do when get an RFP?
Get excited because you think you've got a hot prospect?
Start thinking of all the ways you can spend that big commission check?
Figure this big sale will make your year, help you beat your quota, and keep your boss happy?
If your answers were similar to any of the above, you have a problem.
An RFP is little more than a request from a customer for you to waste a lot of your time. The customer has asked you -- and a bunch of your competitors -- to bid against each other for their business.
The only RFP's I have won were: 1) the one's I wrote for the customer, and knew I would win before the other vendors were even invited to respond; 2) where I had changed the rules by asking the right questions. OK, maybe I won one or two over the last 30 years. But, I think you would have better luck buying lottery tickets.
They ask you to complete their detailed form/questionnaire and then send it in to them for their review and analysis. Maybe they pick three finalists for another round of presentations. Maybe they don't.
Think back over the past year.
How many RFPs did you respond to?
How many hours did you spend creating them?
How many days, weeks or months did you spend following up on them?
How many of them did you close?
How much money did you make?
If you took the time to answer those questions accurately, you're probably not very happy with answers you came up with.
Here's a story.
A consulting client of mine -- let's call him George -- received an RFP for his software via e-mail the other day. It came from Max at AJX Manufacturing. George had last spoken with Max several months before, during a five-minute phone call.
Max had never agreed to a meeting, nor had he returned George's follow-up calls.
Then, out of nowhere, the RFP arrived. It had a list of about 100 questions that George was expected to answer. Max wanted to know how George's software worked, the details of all its features, the best ways to use the software, and more.
Max also wanted the pricing for the basic system and for each of the different modules.
George figured that doing the RFP was going to take at least five hours of work, maybe 10. He wasn't happy about it, and he called me, wanting to talk about what he should do.
I told George that, unless he's able to speak with Max, and have
a substantive conversation, he's going to waste the next three to six months of his life creating an RFP response that probably has less than a 5% chance of success.
First, the $200,000+ deal won't close.
Second, the more time he spends on this "opportunity," the less time he'll spend looking for new business.
If he follows this course of action, his sales will be off, his income will be down, and his boss will be very unhappy with him. I suggested we change the rules of the game.
You've probably heard the proverb, "He who asks the questions, controls the conversation."
If you want to become a great salesperson, you must
learn how to ask great questions.
In George's case, if he responds to the RFP, he's giving answers. He's not asking questions.
He knows almost nothing about Max or AJAX, but Max knows everything about George's company and its software.
I told George to call Max and ask if they could schedule a telephone call so he could learn more about what Max is looking for.
George made the call, and left a voice mail message. Max sent
an e-mail back asking George to send him a list of questions that he wanted answers to, and said they could speak at 11:00 a.m. the following Monday.
So, George sent him this list of four questions:
Why do you need this software?
What problem will this software solve?
How much is this problem costing you?
How quickly do you need to solve this problem?
By responding to Max's RFP with four simple questions,
George had changed the rules.
The focus of George's questions were the customer's problems. They had nothing to do with the RFP, the decision-making process, the other suppliers who'd received the RFP, or the amount of money in the budget. The answers to these questions aren't important.
Your focus should always be on the customer's problem, not the solution.
When George spoke on the phone with Max, Max explained that he didn't have answers to George's questions. He wasn't a decision-maker. He was simply an information-gatherer.
George then asked if they could set up a call with the people who
did have the answers. Max agreed to do that, and the meetings have been scheduled.
Do you want to:
Learn the questions you need to ask to motivate your prospect?
Find the right people to talk to?
The beauty of asking these kinds of questions is that you reach
decision-makers quickly. If you're unable to get to the
decision makers -- so you get the answers you need -- you learn
quickly that you don't have a prospect. And so, you move on.
The next time you get an RFP, or someone asks you to send
something in the mail, change the rules of the game. You'll keep yourself from wasting 30, 60 or 90 days of your life preparing a detailed RPF response all for something that is, in reality, a very low-probability opportunity under the best of circumstances.
You can use that time to find real opportunities and turn them into satisfied customers.
Cheers,
Eric Albertson
Portland OR
May 14, 2007
Monday, May 14, 2007
Monday, May 7, 2007
May 07, 2007 - There's no money in the budget
"There's no money in the budget."
How many times have you heard those words? They've got to be close to the top of the list of things that make you wish you went into another line of work.
How do you respond to that statement?
Let me tell you about an acquaintance of mine. We'll call him Sam.
Sam sells software that helps companies run more efficiently.
He was telling me that when he's talking with a prospect, everything seems to be going fine, until he pops this question: "How much money do you have in the budget?"
He told me about a recent situation:
"On Monday, I was talking to Joe, the CEO of an insurance company. He agreed with everything I said about his situation and about my software. He liked it and thought it might help.
"And then I asked the question: 'How much money do you have in your budget?'"
I asked Sam what happened.
"Joe said there wasn't any money in the budget. Things pretty much fell apart after that."
"So, what's the situation now," I asked.
"He asked me to call him back after September, when their fiscal year ends. He thought he might be able to do something then."
I asked Sam why he asked that particular question in the first place.
"Because I needed to know how much money they had to spend."
Wrong.
When you're talking with a customer, the last thing you want to do is talk about money, budgets and financing.
You have to focus on the customer's problems. That's all.
"Why?" Sam said. "Don't I want to know if they can afford it?"
"No. That's not the primary issue.
"The primary issue is this: Do they have a problem that my product can solve."
Here's what you have to find out:
What problems they have
How are those problems affecting the company's success
What's the economic impact of the problems
Is the prospect motivated to solve the problem
What kind of ROI is required for projects that get funded
If you play things right, the conversation will eventually come around to the subject of cost, but, by then, your prospect will have a whole new way of seeing the situation.
If, for example, your prospect has a million-dollar problem, and your solution costs $75,000, you'll close the sale.
Your goal is to ask the right questions. And, by the way, you can do that on the phone. You don't have to be face-to-face with the prospect all the time. That alone, can be a great time, and money-saver.
A little story: I sold a $100 million dollar deal 15 years ago. Most of the selling -- about 95 percent of it -- happened over the phone. The sale was to Boeing's Commercial Airplane Group. I sold it with the help of one sales engineer, and I lived in another state, three-plus hours away from the Seattle area.
I asked questions about the problems the IT group was having with a project to bring the Boeing 777 airplane to market. Eventually, I found an issue, with the cost of software licenses. A license on an HP 3000 mini-computer cost 10 times what it cost on an Intel CPU.
I made my proposal, or my argument, on a single sheet of paper, guided by a book called The Anatomy of Persuasion. My proposal floated all over Boeing.
All of a sudden, they were calling me. I still used the phone. Once I had the buying committee figured out, and I knew the issues of everyone on the buying committee, I started to make visits. Had I relied on visits at the beginning, I would never have been able to make enough of them -- nor get enough answers -- to find the issue that made the sale.
The only reason this sale happened was because of good phone work.
The phone is a powerful qualifying tool. Think of how much time
you can save if you know that the people you eventually meet with are already genuinely interested in the products or services you sell.
And if they're not interested, why waste your time -- and theirs -- on a face-to-face meeting?
My friend Sam tried out this approach. He got on the phone and had a long conversation with Joe, the CEO who'd said there was no money in the budget.
After asking a number of questions, he found out that, indeed there were substantial problems that his software could solve. He also learned that the CEO really, really needed to solve them -- regardless of budget.
Sam brought the "dead" opportunity back to life, and expects to close the sale in the next 60 days.
Look for problems that you can solve and you'll close more sales and be much more successful.
Cheers,
Eric Albertson
Portland OR
May 7, 2007
How many times have you heard those words? They've got to be close to the top of the list of things that make you wish you went into another line of work.
How do you respond to that statement?
Let me tell you about an acquaintance of mine. We'll call him Sam.
Sam sells software that helps companies run more efficiently.
He was telling me that when he's talking with a prospect, everything seems to be going fine, until he pops this question: "How much money do you have in the budget?"
He told me about a recent situation:
"On Monday, I was talking to Joe, the CEO of an insurance company. He agreed with everything I said about his situation and about my software. He liked it and thought it might help.
"And then I asked the question: 'How much money do you have in your budget?'"
I asked Sam what happened.
"Joe said there wasn't any money in the budget. Things pretty much fell apart after that."
"So, what's the situation now," I asked.
"He asked me to call him back after September, when their fiscal year ends. He thought he might be able to do something then."
I asked Sam why he asked that particular question in the first place.
"Because I needed to know how much money they had to spend."
Wrong.
When you're talking with a customer, the last thing you want to do is talk about money, budgets and financing.
You have to focus on the customer's problems. That's all.
"Why?" Sam said. "Don't I want to know if they can afford it?"
"No. That's not the primary issue.
"The primary issue is this: Do they have a problem that my product can solve."
Here's what you have to find out:
What problems they have
How are those problems affecting the company's success
What's the economic impact of the problems
Is the prospect motivated to solve the problem
What kind of ROI is required for projects that get funded
If you play things right, the conversation will eventually come around to the subject of cost, but, by then, your prospect will have a whole new way of seeing the situation.
If, for example, your prospect has a million-dollar problem, and your solution costs $75,000, you'll close the sale.
Your goal is to ask the right questions. And, by the way, you can do that on the phone. You don't have to be face-to-face with the prospect all the time. That alone, can be a great time, and money-saver.
A little story: I sold a $100 million dollar deal 15 years ago. Most of the selling -- about 95 percent of it -- happened over the phone. The sale was to Boeing's Commercial Airplane Group. I sold it with the help of one sales engineer, and I lived in another state, three-plus hours away from the Seattle area.
I asked questions about the problems the IT group was having with a project to bring the Boeing 777 airplane to market. Eventually, I found an issue, with the cost of software licenses. A license on an HP 3000 mini-computer cost 10 times what it cost on an Intel CPU.
I made my proposal, or my argument, on a single sheet of paper, guided by a book called The Anatomy of Persuasion. My proposal floated all over Boeing.
All of a sudden, they were calling me. I still used the phone. Once I had the buying committee figured out, and I knew the issues of everyone on the buying committee, I started to make visits. Had I relied on visits at the beginning, I would never have been able to make enough of them -- nor get enough answers -- to find the issue that made the sale.
The only reason this sale happened was because of good phone work.
The phone is a powerful qualifying tool. Think of how much time
you can save if you know that the people you eventually meet with are already genuinely interested in the products or services you sell.
And if they're not interested, why waste your time -- and theirs -- on a face-to-face meeting?
My friend Sam tried out this approach. He got on the phone and had a long conversation with Joe, the CEO who'd said there was no money in the budget.
After asking a number of questions, he found out that, indeed there were substantial problems that his software could solve. He also learned that the CEO really, really needed to solve them -- regardless of budget.
Sam brought the "dead" opportunity back to life, and expects to close the sale in the next 60 days.
Look for problems that you can solve and you'll close more sales and be much more successful.
Cheers,
Eric Albertson
Portland OR
May 7, 2007
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