When I started in Sales, my boss threw me a call script and a printed sheet of company names to start calling (a few contacts were sprinkled in as a bonus). I remember how excited I got when someone on the other end was interested in what I was selling. Any of you that have ever cold called before, you know the feeling well! Let’s face it; cold calling has a negative reputation in sales and customer circles. “How dare someone I’ve never met call me and try to sell me something!” they say. I got news for you – if it weren’t for the tens of thousands of telesales reps out there plugging away at the phones, the world economy would be but a fragment of what it is today! So pick up the phone for goodness sakes!
Two thoughts before I tackle the topic of working for free. 1) How about we make everybody feel better and change “cold call” to “initial or intro call”? and 2) In today’s world, true cold calling is reserved for commodity sellers (and perhaps the lazy as you move up the value chain!).
So when that connection on the other line was interested, wow what a feeling! You want me to send more information? Yes ma’am, how many copies would you like? You want me to come out and visit? Absolutely, when is the soonest I can be there? You want a demonstration? Perfect, I’ll set it up. You say jump, I say how high…get the picture? For years I built up this practice of serving the customer’s demands – isn’t that what you’re supposed to do in Sales? I helped many customers and met my quota year after year by working my butt off!
This grooming and apparent success resulted in the delivery of a quintessential loss during my time with Newgistics, an Austin Ventures backed start-up that tried to marry technology and logistics to solve problems with managing merchandise returns for catalog and online retailers. There’s a funny story with Newgistics’ go to market strategy around the concept of “tax nexus” – we could have been included in Rick Chapman’s book, In Search of Stupidity (a great read about the technology snafus of legend – IBM, Novell, etc.), but we didn’t get big enough! We had a couple of investors as clients in the Spiegel Group, but we really needed a big win to take the company to the next level. We organized a Marketing campaign to send TV/VCR units to our top 50 targets with an introduction and video overview of our solution. Lots of boxes were returned as we didn’t consider corporate policies limiting the value of gifts received! Even so, we got attention of our executive targets and I credit this push for getting the SVP of Operation with HSN to take my initial call.
From the start, HSN had us in “prove it” mode. We had access to power up to the EVP Operations and did a good job of aligning our leadership teams. In sum, we completed more than 20 onsite visits, dedicated three FTEs (Sales, Engineering and Operations), and funded two consulting engagements where we brought in Thompkins and Andersen Consulting, costing no less than $50,000. We got so far down the path, we thought the deal was eminent…it was money in the bank. So much so, my VP convinced me to hand over my significant pipeline (including Overstock.com, Blair Corporation, Abercrombie and delias) to the Director of Operations who was transitioning to Sales. Side note: don’t ever do that unless you want to get royally screwed! To make a long (and painful) story short, we invested enormous resources over a 22 month timeframe only to lose the business to a combination of Siebel and Optika and no decision. And I was left holding the bag (it’s always our fault – rightly so) with one opportunity that I held on to, Neiman Marcus, which I went on to close.
So you’re probably thinking, how in the hell did you guys lose a logistics solution sale to a CRM and WMS application vendors? It all came down to three words, return on investment. HSN was in the process of a significant IT overhaul. Our system needed to integrate with multiple systems, including the call center (CRM) and the warehouse (WMS). The HSN leadership determined that their IT bandwidth would prohibit them from completing all three projects successfully so they looked at ROI for each. Siebel was projecting over $30 million ROI, Optika was projecting over $8 million ROI and Newgistics…just over $4 million ROI. The difference was ours was actually based on solid, tangible numbers! Try to argue that one against the titans!! A couple years later, I heard that HSN selected another provider to streamline their returns process – something to do with “brown” this or that.
In hindsight, we could have closed the deal much, much earlier. We were so busy chasing the elephant, the account that would solve all cash flow issues with a $20 million annual top line revenue contribution, that we didn’t push the client as hard as we should have. In essence, we worked for free, effectively jumping hurdle after hurdle without gaining commitment. John Costigan, a renowned sales trainer and purveyor of Jack Ryan Associates – www.jackryanassociates.com– helped me figure out how to effectively manage this challenge for all time. When the client asks for “X”, you simply say, “Great, we’d love to do X. Let me ask you if we do X and it’s perfect – a 10 for you, what would happen next?” You’ll be hard pressed to find a better question in your repertoire. If you take the client down the path of “what happens next?” and they cannot eventually say, “we’ll buy your widgets”, then there’s not enough pain or value to spur action or you’re not high enough in the organization. It’s hard to believe that with all the meetings including all my executives and the major dollars we invested in the deal, we never asked that simple question. Quite simply, we didn’t want to hear the word “NO”.
Some Sales gurus say that rule #1 in Sales is that “customers always lie". This is cancelled out by customers believing the same thing about salespeople! I’d like to suggest that we change our rule #1 to “don’t work for free.” Next time you are asked to do “X” for the customer, make sure you know why it’s important and where you’re going to go from there. This will save you AND the client a lot of time and heartache… Do you Grok it?
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