How to get your buyers to tell you exactly what you need to close deals predictably
Hi! In last week’s post we looked at why having clear exit criteria at each stage of your sales process improves sales rep performance and overall win rates. In this week’s post we go a step further and outline how to gather the information you need to meet the exit criteria and set yourself up for a predictable sales cycle.
The #1 gripe that buyers have with startup sellers is they don’t spend enough time understanding their problems. Yet paradoxically, sellers are often uncomfortable asking questions and jump into demos too quickly.
Use the discovery process to get the buyer to explain their problem in as much detail as possible and recap what you hear to demonstrate you’ve understood.
Validate the severity of the problem with each stakeholder in the decision making process and establish the desire to make change before spending your time prescribing a solution.
Control the buying process or it will control you.
Minimize the barriers to saying “yes”, and know when to walk away
Don’t rely on your product knowledge to close deals
If you can talk a good product game, you will have a lot of interesting conversations with buyers however you will not close a lot of deals. I know this from personal experience as someone who started out in product and transitioned to sales later in my career. I also see it in a lot of early stage sales teams, where founders are attracted to salespeople who “get the product” and “don’t sound like typical salespeople”.
Here’s why: when you lean too heavily on your product knowledge in the sales process you naturally end up talking more than listening, jumping to conclusions too quickly, and prescribing solutions too soon - all of which are very frustrating for buyers. And it’s so commonplace that the #1 gripe buyers have with startup salespeople is they don’t spend enough time understanding their problems.
Get your buyer to explain their problem in as much detail as possible
Many reps (and sales leaders) interpret the “Request a demo” button on their website too literally; they ask the buyer a handful of warm-up questions, jump straight into the demo at the earliest opportunity and hope the buyer turns into a customer.
What the website button should really should say is, “Listen to me while I tell you my problems and show me you understand them before pitching me your product”. However, it takes patience and a structured approach on the part of the seller to do this.
Let’s use the following conversation between a sales rep at a CRM software company and a prospective buyer who has requested a demo through the seller’s website to illustrate how to go about this:
Seller: “What prompted you to reach out this week?”
Buyer: “I’m looking at CRMs and read some good reviews about you guys."
Seller: “That’s great to hear. What’s prompting you to look for a CRM?”
Buyer: “We’ve got some reporting needs…can you show me how your reporting works?”
Upon hearing this, many reps will jump straight into a demo and spend the next twenty minutes talking through all the reporting capabilities of their product. This is a huge mistake, as the rep has no idea what kind of reporting problems the buyer is trying to solve, and is exactly the kind of scenario that frustrates buyers.
Instead, the rep should probe further to clarify, by asking “what” questions:
Seller: “Sure, what type of reporting do you do today?”
Buyer: “We have to do a lot of management reporting for our leadership team.”
Seller: “I see. What kind of reports do you have to provide to your leadership team?”
Buyer: “Oh, all sorts, mostly cuts of revenue by sales rep, territory, industry and product line”
Now the rep has a clearer idea of the buyer’s needs, it feels like a good time to jump into a more tailored demo, focusing on revenue reporting. However, this is still a mistake as the rep doesn’t know how big of a pain revenue reporting is for the buyer.
Instead, the rep should continue probing, this time with “how” questions:
Seller: “Got it. How do you generate those reports today?”
Buyer: “[Sigh] It’s manual. We have new logo revenue in one system and growth revenue in another so we have to export it all to excel and then reconcile it by customer”
Seller: “That sounds like a lot of work. How long does it take you?”
Buyer: “We usually set aside a day a month to get it done.”
Seller: “Wow that sounds complicated. How accurate is the manual process?”
Buyer: “It’s a headache. It never reconciles with the accounting team’s reports so our CFO always has questions.”
Ok, now we are making progress. Revenue reporting is clearly a legit pain if the CFO is questioning the accuracy of the data. It’s also likely that the CFO will be a key stakeholder in the buying process, so this is a good opportunity to keep asking questions and learn about the problem from the CFO’s perspective:
Seller: “What kinds of questions does the CFO usually ask you?”
Buyer: “Mostly about differences between the revenue recorded in the internal systems that we use for tracking against our team goals and the revenue recorded in our accounting software that we use for billing customers.”
Seller: “I see. What software does the accounting team use for billing?”
Buyer: “They’re on Quickbooks.”
Now that we have gathered a lot of information, it’s an ideal moment to recap what you’ve heard and demonstrate you’ve understood:
Seller: “Ok, let me see if I got this straight. It sounds like the reporting problem you’re looking to solve is providing your CFO and exec team with various cuts of revenue reporting from your internal systems that match what your finance team is tracking in Quickbooks without having to do manual reconciliation? Did I get that right?”
Buyer: “Yes, that’s exactly right.”
Bingo! The buyer has articulated their problem in detail, and feels they have been listened to and understood, rather than being on the receiving end of a pitch by a salesperson.
But it’s still too early to jump into a demo.
Validate the severity of the problem with all stakeholders and establish the desire to make change before prescribing solutions
At this point, the rep still doesn’t know if the CFO is bought in on the idea of buying a CRM—if they aren’t, there’s no point wasting time giving the buyer a demo.
To test this, the rep should ask the buyer for an intro to the CFO in order to validate the problem. The buyer should be willing to do this given the rep has just demonstrated they understand the buyer’s needs, so if they put up any kind of resistance, it’s a telltale sign the CFO won’t be on board.
However, if the buyer (let’s call him Joe) does make the intro to the CFO, the rep’s next set of criteria are to validate the severity of the problem, establish the desire to make change and figure out who else will be involved in the decision process.
The rep should start out by relaying to the CFO what he heard from Joe the buyer:
Seller: “Joe was very helpful in describing the challenges you have around revenue reporting. It sounds like the issue is that you are using internal systems to track revenue progress vs goals but the data doesn’t reconcile with what your finance team has in Quickbooks for invoicing customers. Did I get that right?”
CFO: “Yeah, that’s pretty much the problem. The internal systems aren’t integrated into Quickbooks and the engineering team doesn’t have the bandwidth to work on it.”
With the problem validated from the CFO’s perspective, the rep should now press on to validating the severity of it, again using “how” questions:
Seller: “Got it. Given the reconciliation issues you mentioned, and the lack of engineering resources, how much longer do you think the current process will hold up?”
CFO: “Well if I put a dedicated analyst on it we can probably last another year but we’d still have to hire them and ramp them up.”
Putting a dedicated headcount on an issue is clearly an expensive solution, so the rep can now move to establish the CFO’s desire to make a change, again using the recap technique:
Seller: “Based on what I’ve heard from you and Joe, moving onto our CRM will eliminate your reconciliation issues because it integrates directly into Quickbooks and gives you all the cuts of data that you need to track progress to goal. Is that the kind of change you’d be willing to make this year?
CFO: It’s difficult to say but I’m open to taking a look. Can you send me some info?
Control the buying process or it will control you.
It’s very common for a buyer to say “send me the info” but as a seller you never, ever want to do so without clarifying what info to send, who its’s going to be shared with, what they care about and having a follow up meeting scheduled to review it. Otherwise you’ll instantly lose control of the buying process.
The rep should respond like this:
Seller: “Of course. To make sure I send you the right info, is there anyone else besides you and Joe who is going to need to weigh in on this decision?”
CFO: “Yes, our VP Sales, Sarah, will need to sign off on it.”
Seller: “Got it. What do you expect Sarah will care about most?”
CFO: “She’ll just want to minimize the disruption to the sales team. We need them focused on selling.”
Seller: “Yep, that’s totally normal. If you were to move forward with a new CRM, who between you and Sarah, would make the decision and fund the project?”
CFO: “Our team would own this, we’d just need to give Sales enough lead time to plan out the transition.”
Seller: “Great. And is there anyone besides you and Sarah who typically reviews new vendor contracts?
CFO: “Yes, that would be our in-house counsel, Tina.”
This is another ideal moment to recap what you’ve heard to demonstrate you’ve understood.
Seller: “Great. Let me just check that I got this straight. It sounds like the main issue is that you are using internal systems to track your revenue progress vs goals but the data doesn’t reconcile with what your finance team has in Quickbooks for invoicing customers. You could put a dedicated analyst on the process but it sounds like it will break again in a year’s time. Moving onto our CRM to eliminate these issues and is something you’re open to considering, however your VP Sales, Sarah will need to review how disruptive it is for the sales team and your in-house counsel, Tina will need to review the vendor agreement. Did I get that right?”
CFO: “Yes, that’s exactly right.”
Now the CFO feels heard and understood, its time to wrap up the call and schedule the follow up:
Seller: “OK, then as a next step I propose we set up a call with you, Sarah, Joe and me where I can show you how our product can do what we discussed. How does next Tuesday morning look?
CFO: “I’m free at 10 and it looks like Sarah and Joe are too.”
Seller: “Perfect, I will send an invite later today. One last thing, could you also connect me to Sarah and Tina over email? I’d like to bring them up to speed on our conversations.”
CFO: “Sure I’ll make those intros today.”
Now the rep has everything they need to move the deal from discovery into demo and most importantly, be in control of the remaining stages in the sales process.
The demo can be tailored to prescribe a solution that meets the needs of Joe, Sarah and the CFO—Revenue reporting to track progress vs goals; ease-of-use for the sales team; integration with Quickbooks for accurate reconciliation to invoices. There’s no need to spend time showcasing other features, even if they are shiny and cool.
Minimize barriers to saying “yes” and know when to walk away.
When you are a startup it is way more important for you to get a paying customer using your product than trying to optimize for your long-term business outcome. A paying customer gives you feedback that helps you get better at solving their problem and communicating your value prop to future buyers, whereas a buyer with a contract stuck in legal just costs you money.
With that said, here are some best practices to remove friction from the later stages of the buying process (i.e. Proposal and Negotiation):
Discuss proposals 1:1 with each stakeholder prior to reviewing as a group. The classic “meeting before the meeting” approach gives each person a chance to be heard and for their feedback to be incorporated. This includes the legal counsel.
If you offer a free trial of your product, don’t make it a standard part of your offering. Outside of 100% self-serve freemium models, offering a free trial rarely improves conversion, however it does consistently increase the cost of the sale. Instead, replace it with a free month on a 12-month contract, and throw in a 30-day cancelation clause. Yes it amounts to the same thing, but the buyer now has to get the contract approved, which requires a stronger desire on their part to make a change. It also creates more friction on their end if they subsequently have to explain to their colleagues why they want to back out.
If you have a minimum order size, keep it as small as possible. Larger deal sizes require more approvals, which decreases the likelihood of them getting through. Your deal size should be just enough to get your customer to the first value milestone so that up-selling a larger commitment can be based on results.
If you charge one-time implementation fees, keep them as low as possible. Doing so forces you to make your product simpler and more automated and reduces your dependence on non-recurring revenue to drive your growth.
If your industry has standard contract terms, use them. Make sure your reps are educated on what they can and can’t negotiate so that you don’t have to get your (expensive) lawyer on the phone to discuss minor contract amendments.
If a buyer starts redlining every clause in your contract, walk away. A high-maintenance buyer will become a high-maintenance customer and high-maintenance customers are not worth supporting.
If you need help improving the predictability of your sales process, I want to work with you! Just reply to this email or DM me through LinkedIn or Twitter.