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Fast Failure

One of the biggest problems that many sales people face is the long sales cycle. Their inability to determine if in fact they have a prospect versus a suspect causes them much trouble. One question I like to ask salespeople is, would you rather know the first day upon meeting a suspect or a prospect if you’re going to get the business or do you want to goes through the sales cycle only to learn that you didn’t win.

It’s interested to me there’s almost two schools of thought when it comes to prospecting and working. One school of thought is that if you go in and you do a good job, even if you don’t win, you are going to maybe set that position up for the client that when they do want to switch vendors, you will be the one that they choose. That’s a good concept. It’s a lot of work to work on accounts you pretty much you’re not going to get, but it might work for you. The other option that I see happening in the sales world today and my preferred way is to identify truly what prospects or suspects will actually choose to do business with you and then only working on those thus being very very selective.

So, how does one become selective versus a generalist or a person with a large pipeline? A person with a large pipeline has a lot of activity and they are wasting in fact a lot of people’s time. If you look at all the people that have to touch a new piece of business, whether you are in manufacturing or insurance and banking, only to learn that you didn’t actually get the deal, you can see where thousands and thousands of dollars spent wasting people’s time. But if you can reduce those and only start the process with those people that are truly buyers and eliminate and get your hit ratio up, your acquisition cost of each and every new account goes dramatically down. How do you reduce the acquisition costs? How do you get a fast failure? How do you reduce the acquisition cost of each account? Well, you eliminate the slow failure. You actually try to get failure quicker. So how do you do that? One of the biggest keys of getting fast failure is using an up front contract.

An up front contract or an up front agreement is very rarely used in today’s sales world. As a CEO of a company I get called upon by many many salespeople and very rarely do they set the stage for exactly what will happen in that meeting. In our company we use a nine-step sales process or a nine-step up front contract. The nine steps are:

1. Thank them for inviting you in.

2. Reaffirm the amount of time you have for that specific appointment.

3. Identify that they’ll have questions and you’ll be happy to answer them.

4. Identify that you’ll have questions and confirm that they are OK to answer those questions.

5. Indentify the fact that you have an agenda.

6. But their agenda is most important and that before you begin, can they identify the most important points they would like to discuss.

7. Advise them that at the end of the meeting, you might tell them that you cannot help them.

8. Also let them know that you would appreciate them telling you that they do not want your help.

9. Finally, let them know that you could mutually agree to move forward and at that point you must clearly define what “moving forward” means for that meeting.

By using an up front contract in each and every step of the sales process, you can eliminate the long sales cycle. You can reduce your pipeline and you can ultimately get fast failure versus slow failure. Slow failure is one of the biggest issues that most salespeople face today.