In the last 90 days have you given have you given a demo, a full blown quote or proposal or a presentation to a prospect, and then have them tell you they do not have any money or the project has been put on the back burner or they need to “think it over”?
If so, congratulations, you have just been “rolled.”
Yes, you have been rolled, screwed, taken advantage of, out maneuvered, caught off guard and just plain beaten by a better sales person, and the sad fact is that you don’t even have a clue it is happening.
It is incredible how naïve and ignorant most sales people are. They blindly go through the motions of gathering information and making presentations and proposals without a hint of what will happen once they do so. They have been taught by equally ignorant sales managers that the key to success is giving a lot of presentations and proposals, and if they will do so things will work out fine. They blindly and relentlessly do this even though it only results in a sale 20% – 30% of the time.
This is incredibly stupid when you consider that, at best, 70% of their time and effort is wasted giving proposals to prospects who never buy.
Recently, I was talking with my neighbor, a sales person, who works for a local contractor. He was lamenting to me how many bids his company was doing but how few jobs they were actually getting. When I asked him what percentage of bids that he submitted resulted in contracts he said, “No more than 10%”? I then said to him, “you mean 90% of the bids you submit you end up not getting paid for”? His response was, “you know I never thought of it that way because that’s the way it’s done in the construction industry. If you don’t bid you don’t get the job.”
Trying to let him off easy because he is a good neighbor, I then asked him how much did it cost his company to produce a bid, he responded, “I dunno, maybe thousands”.
Thousands!! What a terrible business model. How can a company make money when 90% of their new business acquisition activity results in failure?
Think about that for a moment. They are not being paid for ninety percent of the man hours that they devote to estimating, drawing of prints, meetings with contractors, in-house staff meetings, sales presentations, etc. That sucks like a Hoover.
I then probed deeper, “how much does it cost your company to acquire a new customer”, “I dunno”, he said. Now mind you this is not some rookie sales person. This person has been in sales for over 30 years.
Although it is a stretch, he might be forgiven for not knowing this information, but his boss, the owner of the company, cannot be forgiven for not knowing this information.
How about you do you know how much of your time is wasted and how much you don’t get paid for? Do you know how much it cost to acquire a new customer for you business? If you do email me email@example.com and let me know.