Knowing
When to Walk Away from a Sale
Over the years,
our company has worked very closely with a well-known enterprise
systems management software company. This company is a formidable
force in its space but often has to compete against the likes of
larger, more powerful
competitors. One of these competitors is known not only for
its acquisitive nature but also for its very aggressive
sales tactics. One of the sales tactics this software competitor
uses when deadlocked in a highly competitive situation is to offer
their software to the client for free. That’s right… free!?
The thinking
of this competitor
is that they are willing to give away their software but will require
a client to sign up for maintenance (customer support and updates)
and professional
services consulting for a specified period of time. They take
the loss on the front end but then rope in the customer by tying
them up with maintenance and having their consulting division “entrench”
their product in the customer site. This makes replacement difficult
and can lock down a customer. It can also lead to bad feelings between
the supplier and the client.
What does all
this mean to a sales professional such as you? Think about it from
the following perspective:
Customer: “I think your product is
exactly what we’re looking for but your competitor offered to provide
us the software at no charge so long as we buy maintenance.”
Salesman: “I understand. Do you feel like their
software will provide you the same functionality and will meet your
team’s requirements?”
Customer: “No. I honestly don’t but they’ve given
me an offer I can’t refuse. The only way I can get our CEO to approve
your product instead is if you can match their price. I can’t accept
anything more. Can you do it?”
Again, what
is their price? They’re giving away the product for free!
Is this the way you run
your business? What kind of effect will this have on your company’s
long-term prospects?
These are all
questions you need to think about when faced with a difficult
sales situation where a customer is looking for a price or terms
that are so unreasonable that sometimes, what makes the most sense
is to simply walk
away. That’s right. You have to be prepared to walk away.
Some deals simply aren’t worth pursuing because the effects of the
sale may be too damaging
to your company – whether you’re having to discount too deeply,
provide a shipping date that is physically impossible or delivering
a specific grade of a product that may not exist.
What is the
best way to walk away from the table? Simply stated, you should
walk away in a manner that does not damage your relationship
with your customer. They may wish to work with you in some other
capacity or may even walk away from the “other” competitor to work
with you. Just because you perceive all is lost does not mean all
is indeed lost. Therefore, the best way to walk away is with respect
and dignity.
Sales Rep: “I wish there was a way we could match
that offer. As much as I want to establish a relationship with
you (or continue to expand our relationship) we just can’t provide
a similar arrangement.
Customer: “I’m sorry to hear that,
Kim.”
Sales Rep: I do want to thank you for all of the
time you have spent with me and I do look forward to working with
you in the future. I am confident that we will eventually be able
to help your team meet your requirements.
Customer: “I can appreciate that. You know, there
is another group who has a need for one of your other products that
you may want to talk to. If you have few moments…”
Walk away in
an amicable manner. If you’ve built up a strong enough relationship,
you may not leave empty-handed. There may be other groups within
the company who can use your products or services. Your client may
not provide you with the business
you had forecasted but may point you in the right direction.
Once you’ve
walked away, send a sincere thank
you note and don’t lose touch. Be professional in every possible
way so that your behavior and your communication reflects well upon
you and your company. No one likes a sore loser.
Now that you’ve walked away from the
business, remember the following:
1.
There are other customers out there. Just because you lost this
particular deal, don’t feel like you’re out of opportunities. Take
your licks and keep fighting.
2.
The customer may still call you back. They may not like the terms
your competitor will dictate in order to get rock-bottom discounts.
3.
Learn from the situation. The extensive proposal you built for the
client may help you in future opportunities. Take time to think
about what else you’ve learned.
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