|SalesVantage.com >> Article Archives >> Management Insights >> Executive Summary: How Effective Sales Discovery Lowers Risk and Improves Financial Performance|
When the answers to what wasn't known are exposed for a series of sales or even for one sale, we can better understand what questions must be asked and answered in the future. Using my own 20 years of IT sales experience, I found a few examples of uncertainty associated with my collection of unsuccessful sales outcomes:
Whether or how my product or service connected with the customer's strategic goals
Discovery--the process of revealing facts and information--reduces uncertainties and risk, and it provides the foundation for achieving the insight required for successful sales outcomes. Put another way, if you consider the universe of information in three categories: what is known, what is assumed, and what is unknown, discovery's role is to convert assumptions and unknowns to known, reducing risk in the process.
Given that discovery reduces business risk, how can discovery be used consistently for competitive advantage? Scalable discovery activities require that questions be grouped into categories and used in repeatable patterns. How questions are used in the sales process, how much and what information must be known depends on a) whether the selling activity is transactional or collaborative, b) the risk tolerance of the prospective vendor, and c) time. Because transactional sales (e.g. purchase of a low-cost computer peripheral over the web) don't involve large resource commitment from either buyer or seller, less information (and more uncertainty) is acceptable. On the other hand, collaborative sales--for example, large ERP systems--involve large resource commitments (and large risk) between partners, and the value of effective discovery is particularly high.
Because sales resources are finite, converting all assumptions and unknowns to known represents a logistical impossibility. Therefore, senior management must ask: what risks are acceptable? What information must be known? What information is dispensable in the effort to achieve a successful outcome? At what point do we start to trade off the importance of collecting needed information with the time imperatives of completing the sale? Does the value of the incremental information offset the investment of time (and associated risk) needed to collect it?
How should questions be organized for effective discovery? Here are the categories:
Qualification: Will this business activity generate mutual value between provider and consumer? What is the consequence if the prospect's problem is unabated or the strategic challenge is not met? What is the impact on the prospect's business or strategy if the problem is not solved?
Networking: Who must I connect with in order to further qualify this opportunity and achieve a successful outcome?
Attitude and Sentiment: How committed is my prospect to solving the challenge we identified? How do they perceive the value of my product or service? Are they committed to recommending my proposal or taking action that will result in a purchase transaction?
Validation: How do I know the information I've received can be trusted?
A review of the categories reveals a dependency between the groups: A customer might be qualified, but if I don't connect my business case to the right people, I won't sell anything. If I connect to the right people, but don't gauge their perceptions about how valuable my offering is in the context of their business challenge, I can't be agile. If I don't validate the information on which I've based my strategic account position, I have high risk for making a fatal error.
Discovery doesn't happen just because questions are asked. The critical success factors are:
Establish a foundation of trust at the beginning of the sales process
financial benefits of effective discovery are many. Shorter sales cycle
time, lower sales/general/and administrative expenses, greater forecast
accuracy, and more successful sales outcomes--however those might be
measured. Because discovery strategies are directly related to an
organization's risk tolerance, an understanding of business risk is
essential for knowing how to embed discovery in the sales process. By
focusing on ways to reduce selling risk, shortcomings in discovery can
be isolated and questions can be formulated to convert assumptions and
unknown into facts that can be converted into insight.
Andy Rudin is the CEO of Outside Technologies, a sales mangement consultantcy. His company helps clients generate more revenue through outsourced sales . For more information on the services offered visit http://www.outsidetechnologies.com. Andy can be reached at 703.371.1242 or firstname.lastname@example.org
More articles by Andrew Rudin
More articles on Management Insights