Steve’s Blog

Steve’s Blog

Four Big Challenges to Winning Big Deals


Almost every B2B business is confronted by the “live by the large deals and die by the large deals” issue. This is not unexpected as the 80/20 rule applies to most human endeavors. In this case, 80% of revenue comes from 20% of customers (or some imbalance resembling that). If we don’t get the top 20% of our customers right, it is virtually impossible to hit our numbers by trying to make it all up on the relatively small deals of the remaining 80%.

In this blog I want explore the challenges that customers have to deciding to award a big deal to you. Obviously, large deals are lost for a variety of reasons such as key decision makers leaving the company or changing jobs, changes to the business such as acquisitions that put everything on “hold”, or poor quarterly results that freeze budgets and projects. All of these are out or our control—and that’s why every sales organization needs a sales pipeline that is some multiple of quota because there are things out of our control.

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SURVEY – IS DEAL QUALITY A REAL ISSUE WORTH ADDRESSING?


In my previous Blog I asked the question is possible to manage a deal quality proactively?  And as a result, to consistently close “higher value” deals that advance the business strategy and achieve superior business results. This blog will come at the same topic from the other direction.

Is deal quality an issue that is top of mind for B2B organizations? And if it is an issue, who is most concerned and what are the impacts to the business? I ask these questions, because other than the occasional push to lower discounts (certainly one obvious contributor to deal value and quality), it appears to me that the overwhelming emphasis is still on the quantity and “top line” dollar value of deals booked in a given period. Which makes sense as that is predominantly how most of us in sales are compensated.

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CONSISTENTLY CLOSING HEALTHIER AND MORE STRATEGIC DEALS – IS IT POSSIBLE TO MANAGE THIS?


 

For a change, this blog is probably targeted more at the CFO, Finance and/or Sales Ops than my typical musings.  However, it is also applicable to sales since we are the ones positioning, negotiating and closing the deals – and I think this approach can help you do that much faster.  I first wrote about this topic in a co-authored article with Frank Cespedes of the Harvard Business School. (If you missed it CLICK HERE.)  As I stated then, while this type of approach has been applied on a deal by deal basis, I believed with thoughtful analysis, it could also be implemented for the overall business – and produce dramatic business results.

When discussing Business Strategy with executives, I find that even if they have a clear strategy, identified their ideal customer profile, and organized their go-to market strategy around these, the business results often are not meeting expectations.  In virtually every case, these companies do not have a clear definition of a great deal – meaning the right business deals to support the strategy.  This results in too many closed deals that are “unique” or downright ugly (especially with larger customers).  And when you look closely at the elements of these deals they often run counter to the stated strategy of the business – and contribute to an unhealthy business today.

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INCREASING SERVICE ATTACH RATES – A SIMPLE PROCESS


The CXO and the VP of Services often bemoan the low attach rates of services in the deals sold to customers. The issue is not only a loss of short term corporate revenue but perhaps, more importantly, the long term impact on customer success and satisfaction – which impacts renewals and upsell opportunities.

Sales compensation is frequently cited as the root cause. If the salesforce is not comped on services sales (or there is a lower commission) versus product sales, then the expectation is that sales will not put much emphasis on selling services. While this is certainly a valid argument, it is a self-inflicted wound that can be addressed through modifying the compensation plan. Perhaps the tougher reason for low attach rates is that the services were not positioned effectively during the sale. In this blog we’ll explore a simple, but effective way to better position services as well as products.

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MANAGING CUSTOMER OUTCOMES, SUCCESS, AND VALUE IN THE XAAS CUSTOMER LIFECYCLE


With any subscription XaaS business, it is important that Customer Success Teams as well as Sales Teams are using the same language when discussing their shared customer – if nothing else to ensure a smooth handoff and transition during the customer lifecycle. For instance, sales teams are expected to sell “value” and/or customer “outcomes” while customer success teams are charged with delivering… well, customer “success”.

Are these terms effectively synonyms describing the same concept, or are they very different? In truth they are neither, but rather are intimately intertwined as they describe the customer’s viewpoint depending on where we are in the customer lifecycle.

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WHAT ARE YOU REALLY COMPETING AGAINST?


As we discussed in the previous blog about opportunity qualification, customers have three theoretical alternatives to doing a deal with us

1) Go with a competitor

2) Do nothing (status quo)

3) Do it themselves

It is important we realize each represents a potentially very different selling process. The value proposition and the subsequent negotiation with be impacted so our preparation is key.

First we must understand the alternative we are really competing against and analyze that alternative based on what is important to this customer and the buying influencers. Those insights are priceless. In turn, these insights must inform our value proposition as well as our selling and negotiation strategies.

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