<\/p>\n

The Big Deal<\/span><\/p>\n

E<\/strong>very sales manager, business owner, general manager and CFO, at some point in their careers, have been entertained by the overly-enthusiastic sales person describing the \u201cBig Deal\u201d that was about to close. And unless those managers were completely na\u00efve and inexperienced, a twinge of skepticism should have arisen. Was what they were hearing, in fact, real?<\/p>\n

When hearing about a \u201cBig Deal\u201d, managers must confront the challenge of what to do about it \u2013 ignore it, or prepare. Preparation may comprise some or all of capacity planning, inventory commitment, equipment capacity increases, cash planning and workforce planning. Failure to anticipate these factors can result in an inability to deliver to the customer what they want, on time, should the deal actually break. On the other hand, a knee-jerk financial commitment based on the potential of the deal, can leave the firm with a lot of unusable inventory should the deal fail to materialize.<\/p>\n

So, how does a manager judge the reality of the \u201cBig Deal\u201d?<\/a><\/span><\/p>\n

Here\u2019s an old joke that serves as a guideline for the most skeptical.<\/p>\n

Question: How do you know when a sales person is exaggerating?<\/p>\n

Answer: His lips are moving.<\/p>\n

While this approach may appear easy, it is not dependable. There is a better way to sort through the reality of the \u201cBig Deal\u201d.<\/p>\n

 <\/p>\n

Ask Six Basic Questions:<\/span><\/p>\n

The likelihood of closing a \u201cBig Deal\u2019 can be assessed by answering six basic questions. As you answer these questions, keep in mind is that the answers to the first five are only valid from the customer\u2019s perspective.<\/p>\n

 <\/p>\n

Question 1: Compelling Need<\/span><\/p>\n

To what degree is the prospective customer confronted with a real, compelling problem or challenge that needs to be addressed quickly or can the customer do nothing?<\/em><\/p>\n

Research has shown that between 30% to 50% of all opportunities in a sales person\u2019s pipeline never actually close. The customer simply never buys anything. These are called \u201cNo-Decision\u201d outcomes.\u00a0 The sales person seems to be the only one convinced that there is a customer compelling need that will result in a buy. No matter how convinced your sales person may be that the customer has a need, the only opinion that counts is the customer\u2019s.<\/p>\n

To further pursue this line of inquiry, you might continue by asking: Is there a deadline by which the customer problem must be fixed? Is there a significant economic penalty, safety consideration or other obvious consequence if the customer problem isn\u2019t fixed? Another revealing question is, \u201cCan the customer do nothing?\u201d Or, \u201cWhat is the economic or other consequence to the customer of doing nothing?\u201d<\/p>\n

The lack of a compelling need, leads to the large number of \u201cno Decisions\u201d in a sales persons pipeline.<\/p>\n

 <\/p>\n

Question 2: Economic Benefit<\/span><\/p>\n

To what degree is there a significant economic benefit to the customer if the problem \/ challenge is resolved or the need filled?<\/em><\/p>\n

Businesses, too often evaluate the economic value of a sales opportunity only from their own perspective. How much revenue or commissions will it bring to us? While this is a good way to evaluate attractiveness in terms of the bottom line, how much money your firm can make is completely irrelevant to the likelihood of the deal closing. In most business-to-business environments, decisions to buy are made by customers based only on the degree to which \u201cthey\u201d believe that \u201cthey\u201d will make money. In other words, there must be a significant economic benefit in their favor, well beyond the cost of purchasing your product or service, for the deal to close. The economic balance must be disproportionate in favor of the customer. This is the basis or all ROI.<\/p>\n

 <\/p>\n

Question 3: Match<\/span><\/p>\n

To what degree do your capabilities (products and services), precisely and completely meet the needs of the customer?<\/em><\/p>\n

As convinced as you may be that you have a significantly well matched solution which solves every dimension of their challenge, you only score closing points if the customer believes it.<\/p>\n

 <\/p>\n

Question 4: Competitive Position<\/span><\/p>\n

To what degree does the customer believe your solution is the best of all the alternatives available?<\/em><\/p>\n

While a number of competitors may provide a reasonable match to the problem or need, all alternatives are rarely equal. Let me repeat for emphasis. Convinced as you may be that you have a significantly advantaged solution, you only score points if the customer believes it with the same conviction. And unless you can translate that differentiated position into a differentiated economic benefit to the customer, you miss a great opportunity to solidify your advantage in the customer\u2019s eyes.<\/p>\n

 <\/p>\n

Question 5: Champion<\/span><\/p>\n

To what degree do you have a high-level, influential and authoritative decision maker believing your solution is best?<\/em><\/p>\n

A \u201cChampion\u201d is a person in the customer organization that likes your solution, believes it is in the best interest of their company to select it, wants it to win and is working toward that end. All Champions are not equal. The only Champions that really count are those with the highest composite score on three dimensions: Influence, Power and Affinity.<\/p>\n

Influence is the degree to which they can influence a decision. The degree of influence may arise from technical expertise, seniority, family influence, organizational rank or some other source. Authority is the degree to which they can unilaterally make the decision and Affinity is the degree to which they are attracted to your solution.<\/p>\n

Champions that are likeable, who like you, and are always willing to have lunch with you, are not \u201creal\u201d Champions unless they score high on the Influence-Power-Affinity scales.<\/p>\n

 <\/p>\n

Question 6: Leverage:<\/span><\/p>\n

To what degree does winning this opportunity bring additional benefit to your company?<\/em><\/p>\n

This is the only one of the six criteria that; a) doesn\u2019t increase (or decrease) the credibility of the opportunity and b) is only important from your perspective, not the customer\u2019s.<\/p>\n

Leverage may exist in several forms: straight out earnings, a new first-time market capability, a first-win at a new account or a technological breakthrough that can be leveraged to other customers.<\/p>\n

Even though it\u2019s not customer-centric this factor is good to evaluate, so you can assess the benefit of concentrating and\/or redeploying assets to winning this \u201cBig Deal\u201d<\/p>\n

 <\/p>\n

Getting to Reality:<\/span><\/p>\n

The word confrontation can have a bad connotation, but for purposes of analyzing the \u201cBig Deal\u201d, let\u2019s agree that confrontation simply means getting to the reality of it in a respectful, yet determined, way.<\/p>\n

Some managers find it difficult to confront a sales person about the reality of a \u201cBig Deal\u201d, particularly when others are in the room. Presumably this is out of respect, to avoid the embarrassment of seeming confrontational, or to avoid appearing not to trust an employee. One way or another, these emotional barriers to assessing reality need to be overcome.<\/p>\n

A highly respected local CEO was participating in panel on Performance Management recently. He was asked how he avoided hesitating and how he handled the discomfort associated with confronting these and other kinds of important issues. His response, \u201cI was always more afraid of the consequences of not confronting the issues.\u201d<\/p>\n

There\u2019s typically a lot riding on a \u201cBig Deal\u201d. The six areas of inquiry listed above will help you and your organization stay focused, concentrate where the opportunity is truly best and allocate scarce resources appropriately.<\/p>\n

*****<\/p>\n

Learn more<\/a>\u00a0about the QMP sales process for accurately qualifying and closing sales opportunities.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

When hearing about a \u201cBig Deal\u201d, managers must confront the challenge of what to do about it \u2013 ignore it, or prepare. Preparation may comprise some or all of capacity planning, inventory commitment, equipment capacity increases, cash planning and workforce planning. Failure to anticipate these factors can result in an inability to deliver to the customer what they want, on time, should the deal actually break. On the other hand, a knee-jerk financial commitment based on the potential of the deal, can leave the firm with a lot of unusable inventory should the deal fail to materialize. So, how does a manager judge the reality of the \u201cBig Deal\u201d?<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,12,105,21,13,9,10,95,99],"tags":[25,26,16,106,14],"yoast_head":"\n