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Do You Start Prospecting At A level Lower Than Your Decision-maker and Work Up? Or Go Right To The Top Dog?

If your economic buyer is an Executive Vice President, what is the pro and con of targeting a Director or Manager and working up?

What if the CEO is the only one that can approve your check? Are you better off to get the ear of a VP and work your way up or go directly for the top dog?

Getting this strategic question right is often the difference between sales success and failure.

The danger to avoid: Being lulled by activity volume in the short term but seeing conversion rates, the average size of sale and renewal rates on the low side.

Particularly in a long sales cycle sales process. Those sales conversations and discovery calls with lower levels of authority give you warm fuzzies, but it could take you six or nine months of effort before you realize that those great opportunities are just not converting and your efforts have been mostly a waste of time and resources.

Let me share a rule of thumb for the relationship between sales prospecting authority level and relationship to closed deals.

If you start your sales process one level below your economic buyer, you will sell six times less than if you started your sales process with that ultimate decision-maker.

So if the CEO needs to make the decision and you start at the Executive VP level, you will six times less.

If a VP has to OK your check and you start at the Director level, it means six times the effort for the same level of sales.

And if your economic buyer is a VP and you start two levels below, at the manager level maybe, you are selling in lottery ticket land. If you sell anything, it is due more to randomness than solid strategy and skills.

You are six times less probable to make a sale if you start your sales process one level below your economic buyer. How can you be so sure Scott?

Many many years ago when I was starting out, I did a project for a national management consulting firm. The model was to book an appointment in the C-Suite and sell a first stage pilot project. One in six meetings converted to a $25,000 pilot project. One in three of those pilot projects converted to a much larger longer-term project worth between $500k to $1.5 million.

Over many years, thousands of meetings and hundreds of projects, this management consulting firm studied their sales process. The data proved that they were six times more likely to make a sale when they started at the CEO level. Drop down even one level, start the process at the executive VP level, and sales results were six times less.

So for the appointment setters, the rule was very simple. Book a meeting with the CEO (or the person with ultimate profit and loss responsibility of a distinct business unit with at least $500 million in sales) or don’t get paid. No exceptions.

Over the years that six times the sales rule continues to ring true

I have never had a company that studied this as thoroughly as that management consulting firm. But over the years and many many projects, that rule rings true to me.

When salespeople or companies start their sales process too low, conversion rates, the average size of the sale, renewal rates and lifetime customer value suffer.

Don’t let a lot of meetings with lower level people lull you into thinking you are in good shape

Over and over again I have seen companies “get meetings and have a lot of discovery calls,” yet sales closing percentages are awful. Many times the core of the issue is that they started their sales process at too low a level.

In my world, I deal mostly with clients that sell in the C-suite or with top VP’s. I would never, never, recommend or suggest to a client that they prospect Director level decision-makers.

The “Rule of six” continues to ring true

If CEO’s are your economic buyer, learn how to get to them.

If VP’s are your ultimate decision-maker, learn how to get a meeting or discovery call with them.

Ya, it’s not easy. But cracking that code is easier than starting one level below and selling six times less for the efforts made.

Your Economic Buyer Thinks Differently: Prospect Directly to Them

Your economic buyer thinks different than the rest. They are responsible for the strategic direction of the firm and overall profit and loss. They are thinking strategically, short-term and long-term. They are not working within budgets and doing what they are told. Economic buyers are setting the budgets and allocating funds for best results.

Even if you are perfect for a firm and introduced by a lower authority person, it is my personal opinion that in the majority of cases you get discounted. Why? Because the economic buyer “knows better” and will favor a vendor they know. I believe that.

If an economic buyer sneezes in your direction, lower levels of authority will fall over themselves to agree with what they think their boss favors. You are helped tremendously when top dogs even hint in your direction.

The messaging that wins over the economic buyer is not what moves lower authority levels. In fact, change is scary at lower levels. They are entrenched in current practices. If you are successful, they have to learn new things. Their relationships with current vendors and service providers would be at risk. They might “check you out” to justify their salaries, fill up their calendars and maybe learn something from you that benefits them,  but you never really have a shot at serious consideration. At lower levels, they are implementing the strategies, not setting them. They are more focused on the short-term. Plus, lower levels of authority fear rejection.

Is it ever advisable for you to prospect lower levels of authority?

Sometimes, it makes sense to start at lower levels. But they are true exceptions.

– You are learning. It’s OK to spend a little time practicing at a lower level.

– Sometimes, if you are selling major projects and your margins are sufficient, after your efforts to reach the top dog have failed,  you can go low knowing that your odds have lessened but the effort can still be very profitable.

Start your sales process with your economic buyer for best sales results

Work the system that will get you the best results over the long haul. Don’t let a lack of patience or lack of confidence in your system derail you.

You need to have the confidence and ability to stick with a winning process during the slow spots.

You might have fewer meetings or discovery calls, but your conversion rates, the size of the average sale and volume of net new business booked will be much higher with less effort.

Message to Management: Know What Converts

At times, callers will book lower level meetings to meet quota. It’s easier. Management has to set standards for what level of authority the sales process is to start and what meetings will be compensated.

If management lets the team call too low too often, a ton of prospecting money will be spent now with little or nothing to show for it.

Ya, but

You want your team to know and use the behaviors that are most likely to move them toward their goal in every situation. You need your team to work in the high-probability zone. Top performers are knowledgeable about and talk about behaviors, actions, words, scripts, which are the best to use in typical circumstances. That is what they think about — the best way to do things.

The mediocre and the wanna be’s that never will be’s are at a loss to articulate how to handle common sales scenarios yet are masters at knowing the exceptions to the rules. They are quick to express a “Ya, but” when the most successful behaviors are discussed. Ask them how they handle very common scenarios, and you will hear “Well, everything is so different, it depends on the situation, you never know….” Lower performers are experts on all the exceptions to the rules. Every time you mention a high probability behavior, a tried and true practice of the top sales high earning superstars, the first thing you hear from a never to be is “Ya, but….”

We are in sales, deal with people and crazy things happen around the edges. So what?
Keep your team focused on the highest probability sales behaviors, not the exceptions to the rules.

Interested

A more meaningless, nebulous, tell us nothing, divert from the real issues, ridiculous sales word has never been invented. “Let’s find out if they are interested.” “They are interested in the gizmo.” Does that tell us anything of substance that can be used to make better decisions to close a deal? NO!! It typically just masks ignorance of what is really going on and leads to wasted time.

As a manager, do those words do anything to help you determine whether a deal is real or fantasy or how to help your rep? No.

Do they fit your profile or not?
Did they express certain needs or not?
Did they describe a goal?
Did they relate specifics about what the status quo is costing them?
Were they specific about what they hoped to gain with a new vendor?
Did they share their buying criteria?
Did they relate their decision-making process?
Did they commit to moving to the next sales step?

There are a lot of things that give you clues as to whether a sale is on the right path. Whether they are “interested” tells you nothing of value.

As a manager, you need specifics. You need to know specifics to determine whether an opportunity is real and if your rep is prepared and doing the things that give you the best shot at realizing that opportunity.

You are doing your reps a favor when you ask specific questions as to matters that impact the sale. They know you will be inspecting, not assuming. Your reps will sharpen their questions and presentation skills knowing that you will be asking questions of substance and expecting real answers.

I’m different

We are different. This industry, this area, this side of the street are all different.

What they are really saying is “I don’t have to change, listen to facts, learn anything or be held accountable.”

Many with average talent and drive get/stay very congruent with the behaviors of the top producers and make a lot of money. Many others, with superior talent and drive shoot themselves in the foot immediately with the “I’m different” rationale for not having to listen or do what works. It is a very common self-sabotaging behavior.

Just step up to the plate and admit that you don’t want to change, you don’t want to learn, you’re lazy, or you don’t really care about making more money, but don’t let your team use the “I’m different” excuse.

Demand Knowledge

There might be 20, 30 or 50 reasons why someone might buy from you, yet most salespeople would be hard pressed to name five or six.

Are your reps fluent with the names of your top accounts in general? Your top accounts in each industry or vertical?

Do your reps have stories, examples or statistics as to how your service or offering has improved business conditions at other companies?

Are your reps prepared and fluent discussing specifics, before and after examples of how your solution has helped others?

Are your reps prepared with the depth of knowledge necessary to remove the last elements of doubt in the way of a buy decision?

The sad fact is the too often reps knowledge is not very deep. They might be great order-takers and able to skim the cream off the top and close what is easy, but not able to remove doubt, educate or demonstrate your offering to move those that would benefit greatly from your offering into the win column.

I believe strongly in what I call the “pile of words.” Very simply it is all the top verbiage, examples, names drops, specifics, stories, benefits, credibility factors that reps need to know to represent you in the marketplace. That document could be anywhere from seven to thirty pages long. I don’t care whether it is setting an appointment or discovery call, conducting the first meeting or managing an account deeper in the pipeline, there are facts, words, and phrases that best represent your offering and help prospective accounts fully appreciate how you might help them.

Without fluency in those basics, reps are left with superficial knowledge and the company is losing opportunities they otherwise could have had.

If it is not written down, it is far less likely to be used.

If it is not written down, I can guarantee you that only a small fraction of your credibility, experience and how you have helped others is being communicated to your prospects.

Write down all the top verbiage and specifics that best enable your reps to communicate your credibility, benefits, and proofs of what you can deliver.

Check under the covers. Ask them how they handle opening a meeting, their top questions, handle or cut off at the pass common objections, illustrate your strengths, on and on.

It is management’s responsibility to make sure that reps have all the top verbiage to properly represent your offering.

It is managements responsibility to make sure that reps are fluent and using that information to maximize sales.

Would you rather be the casino or the gambler?

Do you win more sales by focusing on the overall process? Or, the result of individual calls and pitches?

In poker, there is a theory that when you make a bet with the odds in your favor, you have won something regardless as to whether you win or lose that specific bet. And, when you make a bet with the odds against you, something is lost, regardless as to whether you win or lose with that specific choice.

Can you be using good sales techniques if someone says “no?” Yup. Big time. 

When you do the right things, you are going to be successful. It doesn’t matter whether, on an individual play your script works, people agree, or you close a deal. When you are working a true system, and you have the big picture in mind, your bottom line results will be multiples of trying to beat the odds pitch by pitch, proposal by proposal. You are not going to win every play, but you are guaranteed to win overall. You are the casino, you are selling with a system, and you are playing with house money.

On the flip side, if you are not selling with a system, you are much like a gambler. You think way too much about the outcome of each call, each meeting, each proposal. You are focused on the outcomes of individual plays rather than focusing on executing on an overall winning system. You tend to change direction and strategies frequently. Your plan has far more exceptions than rules.

If your sales methodology resembles a gambler, you don’t stand a chance. You are going to win some; you may even win some big ones, but overall you will never be better than mediocre.

You can break the rules of your system at times, but break them too often, and you don’t have a system.

Having a winning system doesn’t mean that you are a robot. At times, it is strategically wise to vary from your system. Let me relate an extreme example. In my early days, I was working for a client that sold employee relocation services. I called very big companies that moved employees all over the world. The white whale of the industry was GE at the time. They made more than 2,000 moves a year, and it was “impossible” to get a meeting with them I heard again and again. Bottom line, I booked that meeting with GE. I did it by varying significantly from my winning process. I actually, purposely said swear words on the phone. I made a bet, and I won.

However far more results have been earned by sticking with the system when times are tough. I could relate many more examples of reps getting consistent results by sticking with their system even though there were stretches of failure. For a personal example, I had a client a few years ago who targeted very large oil companies for a very specialized environmental service. The top 30-50 oil companies were by far the best targets. We had tried a few callers, and things weren’t working so, even though my calling days had long been over, I offered to jump in. Bottom line, Troy got about eight meetings within top levels of the largest oil companies in the US for projects worth many millions. In that case, what got results was sticking with the system. When I was bored, didn’t want to make the next call, heard “no” multiple times, believed it useless to keep going, I just kept saying to myself “Scott, work the system.” I did, and the results came in.

In the oil company example, it would not have been a winning system to swear at the decision-makers when they picked up the phone, as I did to get the GE meeting. And if I had succumbed to boredom, frustration or panic and varied my process I would not have booked eight meetings for Troy; I would have been lucky to book two or three.

In the GE example, I gambled and won taking a chance on strategies for that one target that would have been disastrous if used consistently on others.

Remember, if your “sales system” has too many exceptions, you don’t have a sales system.

Do what this guy says, or you can’t work here

Having your team working a system, having a company culture ingrained with the right way to prospect, handle a discovery call, move a prospect through a sales pipeline and ultimately close the deal means that your team is working in the high probability zone. It is your duty as a company owner, VP sales or manager to know the difference between a system that works best overall versus gambling, guessing and winging it.

I had a client that flew me into company headquarters every month for three years to train new hires. They went from $30 million to $100 million in sales during that period, not necessarily because I was so special, but because they were working a system.

Every month before I started the training session for the new hires, the VP of sales would start the meeting by giving a speech about how well the company was doing, how quickly they were growing and that there was a method to their success. It always made me uncomfortable, but he would end by saying “If you don’t do what Scott is going to teach you, you can’t work here. Do things your way, and you won’t be working here long.”

He didn’t say that because I was so special. They were growing rapidly long before I came into the picture. But their system, their beliefs about how to sell their products, their beliefs about what to do at each step of the sale to get the best results from their efforts, was remarkably similar to what I teach. What that VP of sales was saying is “we have a system and ways of doing things that are working for us.  If you are not willing to learn and work our system, you can’t work here.” They hired good people and paid them very well. They plugged their reps into a system and provided support for those that needed help in learning it. If the reps wanted to play outside the system, if they wanted to gamble, the company wasn’t going to let them gamble with their money.

How to tell if you are too focused on sales outcomes, and doomed to mediocrity as a result

You over-react to individual calls or meetings.

My favorite extreme examples: Trainee does all the prep work and is ready to start working the system first thing in the morning and promises to let me know how it goes. Get a call, and the trainee says “Scott, it just isn’t working, most people aren’t picking up and the two people I  spoke to cut me off. It just isn’t going to work.” Hmm, this call came in at 10 am on the first day. They had been calling for less than an hour and were ready to abandon all that they had prepared.

Another example which happens a lot when people try new things and exasperates me. “Scott, I had a call, and they shut me right down. It won’t work. It is _______________. “ Pick any of these to complete the statement. “Too long,” Too much info” “too salesy” “Isn’t conversational enough.”This one exasperates me as it is a pretty clear indicator that someone that takes the result of one call as indicative of what will work overall does not have things in perspective and is doomed to overreact to individual outcomes.

You focus on “one thing” that will turn everything around

It is human nature to want to hit the easy button. And often sales reps will believe that if only they had the right script, got better at objections, had a better story, could improve their elevator pitch (shoot me) or had a better list, all would be different. But the reality is that the answer is never “one thing.” Never. It is always a combination of things that create a system that delivers superior results over time.

If you are bopping from one new idea or strategy to another, thinking it will make the difference,  you are not tweaking a system; you are placing losing bets. You are selling like a gambler.

You believe the “everything has changed” crap 

Please excuse me if I go into rant mode for a moment. Whenever I hear someone say “Everything in sales has changed.” I sigh. I sigh because that person has stacked the odds against them. Those who believe that are typically shutting themselves off from learning something that will help them right now. Rather than learn from sales success, and that success might have occurred last year, last decade, they shut off opening their minds to examples that might help them by saying “everything has changed.”

Now certainly some things have changed; Technology, our prospects access to information, competitive environments, and more. But the drivers of sales success have not changed. You still have to target the right prospects, interact with them effectively, have good messaging, yada yada yada.

Don’t let someone sell you the wonder strategy of the month by trying to convince you that “everything has changed” and you can’t learn something from prior successful producers or even other industries. Be willing to learn from all sources and tweak the component parts of your system to win.

You think making more calls will save you

First, let me say this. If you are a salesperson and work for a sales manager whose direction and coaching starts and stops with “make more calls,” leave that job. You will never make any real money. If you or your manager are “activity focused” and really believe that more dials, more doors knocked on, more pitches or more proposals will turn things around, you are in denial and deluding yourselves. Assuming you are making a reasonable effort, “more” will never save you. You are not only selling like a gambler but you are making really poor bets.

Your results and income hasn’t changed much recently

This one is a tough one. Bottom line. You might think you are doing the right things and working hard enough in the right places, but if your results, your income hasn’t changed much recently, it is a big fat clue that you are not working a winning system. If you think you are working a system, it’s a pretty poor one.

Certainly, if you can look back two or three years and you are getting average results or less, you need to step up to the plate and acknowledge that what you have been doing isn’t working. If the needle isn’t moving, put aside your rationalizations and excuses as to why. Admit that you are not working a winning system and have been selling in the gamblers zone. Be willing, be determined, to change.

The probability and payoff of the wins delivered also matter

When you focus on implementing an overall effective process your probability of sales success goes way up.

But the success of a sales process is not just about the probability of wins and losses. It is also about the payoff of the wins delivered.

Everybody is familiar with the law of the vital few, aka the Pareto Principle. 80% of success comes from 20% of our effort. The 80/20 rule. 80% of outcomes come from 20% of the causes. 80% of the revenue & profit comes from 20% of the clients. 80% of sales are closed by the top 20% of the salespeople.

The 80/20 rule is a rough guide to the common distribution of cause and effect. Your number may not be “20” and “80.” Your number might be 90/10 or 95/5. The point is that for most things in life, and in sales, not all efforts and inputs affect results equally.

When you work a winning system, you put more emphasis on the things that matter most to outcomes as a matter of process and habit.

The 80/20 Rule Also Applies to Screwing Up

You should also be thinking about the 80/20 rule regarding what actions/mistakes have a disproportionate impact on achieving a bad sales result. What things can you stop doing or saying that is heavily contributing to your bad results? Rip those things out of your process.

If you stop doing stupid stuff, you can have an 80/20 impact on sales

Sometimes it is not what you do, but what you stop doing, that contributes disproportionately to achieving superior results. If 80% of sales come from a small segment of your list, stop calling the low-return no-return parts of the list to get a big boost. Ex: I do a lot of work in an industry where 50% of what is considered a “great” account comes from just 3% of target lists. If you don’t know the profile of that 3%, you spend the vast majority of your time in knucklehead land. Just stop doing that, and you will immediately see a big impact on results. Very common.

You greatly improve your sales process when you make a habit of identifying and not doing stupid stuff as a matter of habit and process.

Why does a casino – “the house” always make money over time? Probabilities.

If you are a casino, you are working a system with the odds stacked in your favor. Overall, a casino has created a process that delivers good outcomes for them again and again and again. They do the things that most impact results as a matter of habit and have ripped out the stupid stuff that drags down results.

If you are a casino, you will have some bad results. Gamblers are going to win some bets. Some gamblers will “beat” the superior casino process fighting against them on individual bets.

Individual decisions can be based upon bad thinking and wrong assumptions yet be successful.

Decisions based upon sound reasoning can be complete failures.

But over time actions based on more thorough and reasoned decision-making, a winning process, will lead to overall better results.

Sales leaders make a strategic mistake by assuming that a “good outcome” must be the result of solid thinking and doing the right things. Not even close to being true.

Those that rack up the most wins and do so consistently all emphasize implementation of a superior process over prioritizing outcomes.

Gamble, and you will win here and there.

Work an effective overall system and you will win consistently. Ka-ching, Ka-ching. You will be piling fat stacks.

Even basic sales systems can beat the competition soundly

Everybody wants the quantum leap in sales results. I have seen far more quantum leaps in sales productivity from companies or individuals that get their basics in order. Getting the basics organized and implemented consistently is far more likely to vault your sales productivity forward than embracing again the latest strategy of the month cure-all or new technical innovation. And once you get your basics in order, you have a strong foundation upon which to layer all the more advanced strategies that will help you.

Even basic systems, implemented consistently, are usually good enough to run circles around 90% of the competition. Not kidding.

If you are a sales leader would you rather be “the house,” working a system that will deliver a consistently superior result over time? Or would you rather be the gambler trying to win a bet?

When you are in sales, the only certainty is that there is no certainty. We deal in risk. We take a chance with every effort not knowing what the outcome will be. But when we are working a well thought out sales process, we can have a high degree of confidence in what the distribution of outcomes will be. We can have a high degree of confidence knowing what the overall probability of winning will be but also the payoff of those wins.

So if you are a company owner, VP of sales or account executive, are you playing with house money or are you a gambler?

” Faced with the choice between changing one’s mind and proving there is no need to do so, almost everyone gets busy on the proof.” Charlie Munger

Let you in on a dirty little secret in sales training. Most people don’t implement.

Yup, people are human. Change is hard. Most people, sales reps included, will resist altering habits, no matter how poorly the present practice is performing or how obviously beneficial a new method would be.

That’s why the best performing teams I have seen have sales management that checks under the covers. Are the scripts being used? Are meetings conducted in accordance to plan? Or, do reps drift away from well planned solid practices because 1) they can rationalize why they should, and 2) they can get away with it.

People are far less likely to steal from you if they know systems are in place and they know they will get caught. And guess what? Reps are far less likely to resort to lowest common denominator, what’s easy at the moment, skim the cream off the top sales practices if they know their manager is going to peek under the covers to make sure they are adhering to the plan. If they go off plan they know they must be able to articulate a damn good reason why they did.

Received a call recently from a sales VP that told me a new rep wasn’t opening up the first meeting with a well structured “commercial” but had developed some top notch questions, seeking advice on how to get that rep to open up meetings correctly.

I was surprised to get a call like that because they are too rare. Once companies invest to reach conclusions about how best to close more sales and teach reps those methods, most of the time, they are not implemented. Only the top-performing organizations regularly check under the covers to make sure that reps are implementing according to plan.

There should be no hiding in sales.

“If you don’t do what Scott says you can’t work here.” Yikes. That is how an EVP of sales opened my training sessions for new reps. It wasn’t because I was super special. He said that because they had a way of doing business, prospecting for new opportunities, how to conduct initial sales meetings, that worked for them. Either the reps were willing to execute the sales strategies and behaviors that this company felt gave them the best chance for new business, or they could not work there anymore.

And guess what? Management checked under the covers to make sure reps were doing things correctly. They gave reps plenty of support and guidance to be great salespeople, but at some point, if they weren’t willing to follow company practices, it was buh-bye.

Guess it worked as the company went from $15m to 100M in about six years.

There is not a more powerful force on this planet greater than people’s ability to rationalize why they don’t have to do what they don’t want to do.

Reps will do mental gymnastics worthy of Olympic champions to rationalize why they don’t have to do something they are not comfortable doing. Even “you would have to be an idiot not to do this” type change is resisted.

So you have to check under the covers.