Even When You Win, You May Learn Something Critical to your Sales Process

In an recent sales post-mortem review, we found a case of a company that successfully sold additional product into an existing account. The sales opportunity was competitive, but the incumbent won, which was not unexpected. In fact, the client had very good things to say about the incumbent vendor:

What were the primary reasons you selected FlashNet*?
“We selected FlashNet for their New/Existing Account program, the return on investment over a five-year period, their long-standing relationship with our organization, and their commitment to service.

We’ve been working with FlashNet for four years. We’ve had a lot of success with FlashNet taking care of us as a customer, making sure were happy and that the account works smoothly. It’s very easy to work with FlashNet.”

Now, the client spoke well of the competitor. The situation was a close win for the incumbent, and the losing vendor should probably keep its eyes open for opportunities to get its foot back in the door.

But, let’s look at some feedback that the winning vendor discovered about the way its prospects and clients perceive the purchase process. I think that this feedback needs to be understood at the highest levels before it turns into too much friction for incoming clients:

Additional comments (FlashNet):
Overall cost: “The cost per unit that we currently have with FlashNet is fairly low from a market perspective. When we purchased in bulk, we found that in one case it almost increased in cost per unit, which shouldn’t happen. When you see a sticker price on a car, you know that’s for retail. When you say you’re going to buy 40 cars, you shouldn’t be paying more than retail for each one, so I was dissatisfied with that.

“That’s how their sales management works. The salesperson that is assigned to me can only offer us up to a certain level himself. Then that has to go to his sales manager who can only authorize up to, say, $100,000. That means they have to take it to their vice president of sales who can authorize anything at that point. The problem is, when you make a single purchase order of over $500,000 worth of equipment, the salesperson you’ve already negotiated with over a long period of time to give margin to has their hands tied. They can’t make recommendations for the decision and neither can the sales manager.

“So the vice presidents get involved and look at the margins, and because the margins have already been so shrunk, they hold the line. Unfortunately, not only does that represent them poorly, it increases the time for decision making and it doesn’t really help—especially when you’re looking to place a fair and reasonable order for half a million dollar’s worth of equipment. I don’t want to argue about half a percent; give me $5,000. That’s kind of how things work. You expect to see a discount from mark-and-base orders, and that doesn’t happen with FlashNet.”

If the prospects can’t purchase in a way that makes sense to them, some will leave. Fortunately, there was a bunch of goodwill built up in the existing relationship that carried the sale through. But, if loyal clients feel this way, what are the new prospects going to do when they can’t find a satisfactory way to deal with FlashNet?

This is the kind of competitive intelligence that a company should perform on itself to make sure that processes, policies, guidelines, message and all that stuff are up to snuff.

If you need a little help getting these kinds of feedback mechanisms in place or if you want to bounce some ideas off of me, let’s chat. (cdalley@primary-intel.com, 801-838-9600)


*Names changed to maintain confidentiality.