It’s virtually impossible to list all the many pitfalls to avoid when selling service contracts.
But we can focus on the vital few and avoid them, which brings us closer to a win. So here are the top five to navigate around. Misstep and kiss goodbye the mega contracts, annual sales glory, and career best commissions.
Like David Letterman’s Top 10 Lists, these five are presented in reverse order of importance. Remember, the point is to avoid them.
Trap #5 — Relationships are Everything
Contract decisions are a big deal, often with multiple decision makers. Customer job security today is low. They won’t risk their jobs, mortgages, and pensions to slip a contract to a supplier friend, especially with SOX requirements.
Sales reps can’t expect contracts solely on their customer relationships.
However, relationships are still important. But only for acquiring customers’ confidential info that will be useful when bidding.
Trap #4 — Kitchen-Sink Sales Proposals
Sales reps have taught customers not to read proposals.
Because sales reps don’t know what’s important to customers they dump everything in.
Customers faced with self-congratulatory supplier drivel that has nothing to do with their situation, jump to the easy, quantitative data – the price. Can you blame them?
Trap #3 — Price Rules
Even after sales reps drive customers away from reading proposals (Trap #4 above), customers rarely use price as the sole determining factor in contract awards.
Price is often one of the top 3-5 criteria, but that means there are also 2-4 other decision considerations.
Those other considerations are used to assess the value customers will receive for their spend. At the end of the day, price without value is meaningless. Therefore proposals must focus on value from page 1, get persuasive immediately and stay persuasive throughout.
Trap #2 — RFPs Tell You What You Need to Know to Win
RFPs are Procurement’s attempt for apples-to-apples comparisons. Most RFPs are schizophrenic questionnaires, with copy-and-paste left overs from other RFPs, and with ambiguous and duplicate questions.
But RFPs never state customers’ real challenges and desired outcomes. They don’t want their failures or secrets known.
For example, you’ll never read in an RFP: “We’re going out to bid because our service supplier propped open the back door and $250k worth of merchandise walked out”.
Yet that is the kind of info sales reps need to know to win — AND IT’S NEVER IN RFPs.
That inside customer info is what winning proposals are built on. It is what’s needed to:
- Analyze the customer’s situation
- Design a service solution
- Develop a persuasive proposal
But that data is never in an RFP (and I feel very confident in using “never” in this statement). RFPs only provide:
- Scale & scope — so pricing can be finalized
- Contract terms & conditions — so legal reviews & comments can be made
Trap #1 — Customers Make Decisions Based on Facts
Humans are emotional beings. Emotional responses are baked in, starting from primitive man’s survival imperative.
“See saber-tooth! Stomach jumps into mouth. Adrenaline flows. Run!”
Not an intellectual exercise. Evolution added logical, intellectual thought to follow after the survival drive.
“Running from saber-tooth. There’s a river. Swim across. Lose saber-tooth on other side”.
Same with modern man. Procurement tries to lock down apples to apples decision making. They attempt to remove emotion from the process.
Yet all that strapping down highlights Procurement’s fear. Fear of making a bad decision. Fear of embarrassing one’s self in public, professionally, in front of the saber-tooth.
For sales reps this means first understanding the emotional drivers of decision makers.
Then presenting an emotionally engaging narrative, one that articulates that customer’s higher vision and shows how they can help them achieve it. Customers seek proposals that bring to life a breath-taking, aspirational, yet attainable future.
For more about proposal persuasiveness and customers’ needs from proposals read “Hierarchy of Proposal Persuasiveness.”
Missing Sales Traps?
These are five, of probably thousands of sales traps. What other traps do you feel are essential to avoid in the sales world?
