Your New No. 1 Competitor

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Mark LindwallBy Mark Lindwall

Who is your company’s No. 1 competitor? Actually, it’s not who you think it is. In fact, it’s probably not “who" at all, but rather “what" that is the taking away the most sales from your sales team(s).

We recently asked 180 IT salespeople with greater than three years of experience this question: “Thinking about the opportunities you’ve lost in the last 12 months, what is the most common reason for the loss?" They replied that in 43 percent of losses the reason was “lost funding or lost to no decision: customer stopped the procurement process."

Your company’s “competition," more often than not, is actually buyers deciding not to make a decision at all. You lose to a “no decision." Your perceived competitors didn’t win either. No transaction happened, no value was created; only cost was incurred by all parties involved. OK, so is this really a "new competitor?" No. However, due to changes that I'll discuss below, it is a competitor that has gained far more of a foothold on business that you would like to have. So what happened?

As a sales leader, I often found the overall opportunity pipeline stuffed full of these no-decision “opportunities" that got stuck at the proposal or business case stage (proposal submitted) and just never moved forward. You’re seeing those right now, right? I call this a constipated pipeline. It’s not healthy. Ah, but hope rings eternal for salespeople. So these were the opportunities that required tough management questions to ascertain whether they would ever convert to business.

Buyers didn’t choose a competitor, so for the salesperson, the opportunity was still an opportunity. Only it wasn’t. The buyer had decided not to decide. So managers had to help the salespeople understand why the buyer wasn’t moving forward, when all along they were agreeing that their “solution" seemed like a good idea. Investing in “stuck" opportunities saps energy to pursue real opportunities. Flush them. Let’s understand why salespeople lose to a “no decision."

Agreement Networks. The first reason is that your buyer’s world has changed, dramatically, in the new economy. When I was a salesperson in the 1980s and 90s, directors and vice presidents had substantial budget and autonomy to make decisions within their domains. Today, there is vast scrutiny over what in the past would have been considered modest expenditures. The result is that there are almost always numerous people involved in the buying process. So salespeople more than ever before must understand and navigate complex agreement networks and processes within the buying organization that span different altitudes and functional roles. Because decisions are more cross-functional, every dollar is compared against how it could add value in potentially completely non-related areas of investment.

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