“We need to create environments where losing is OK and doing it sooner is even better and leading with transparency.” – Todd Caponi in today’s Tip 837
What do you think and how it goes?
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Transcript
Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip comes from Todd Caponi. Todd is the author of the 3x award-winning & best-selling book, “The Transparency Sale” and a top-rated keynote speaker & trainer as Principal of Sales Melon LLC. Here he is:
Todd Caponi: Have you ever heard anybody in the history of humankind in the sales profession say, “That they like to lose slowly.” You know, they like to get into an opportunity that they know they’re going to lose, that they probably could have qualified out because losing builds character. That’s never been said. We all know it. We all know that the second-best option behind winning is losing fast so that we can spend our time on opportunities that we’re more likely to win. Then why don’t we do it?
Well, I’ve seen three reasons why this happens, and it goes a lot further than you think. The first one is systemic and it comes from leaders, leaders like me. One of the things that I used to do wrong is that I used to measure my team not only by their outcomes, but by their pipeline loads. I mean, you’ve heard funnels since the beginning of time, right? Throw a bunch of stuff in the top and the more you throw on the top, the better flow you’re going to have coming out the bottom.
Well, that’s a systemic cause of why we don’t qualify deals out faster. You know the other one, as a leader, I used to look at my reps and say, Hey, you know what? Any time you need to have four times your quota in pipeline because we only closed twenty-five percent of our business. So we need more pipeline to assure that we’re going to have enough coming out the bottom end. Those two things together. What it causes is your reps to load their pipeline with 4X the quota with crap.
So the first thing we need to do is make sure that we don’t have unintended consequences from the way that we measure and the ways that we look at our sales pipelines. I mean, wouldn’t it be better to have a 2X pipeline load to quota? And those are all deals that we should win to that we’re spending our time more efficiently on the opportunities we should win. That would be ideal. So step one, rethink the things that you measure and the things that you look at, because often they could have unintended consequences.
The second one is the Sunk Cost Fallacy. I mean, we all remember “Tommy boy.” Tommy Callahan, sitting there with that little biscuit talking about that. He gets an opportunity and he’s so excited and he pets it and he loves it. You know, the sunk cost fallacy is this idea that when we’ve invested time and resources into something or we’ve even gotten the endorphin rush from uncovering a new opportunity and putting it in the CRM like, woohoo, we feel good about that one. It becomes a lot harder for us as individuals to let it go. Like if you love it, let it go if it’s not the right thing. Right? And so we need to look inward and as leaders, as sales leaders. We should be looking at how do we actually reward or celebrate sellers for their losses? I know that sounds counterintuitive, but when we can celebrate the losses for the effort put in and the learnings that come from it around, why wasn’t this field situation? What is it about the firmographics and the demographics in the environment that they’re in that would better inform us faster to be able to qualify out of other opportunities like it sooner? So that’s number two is look for ways to combat the sunk cost fallacy.
And then number three just comes down to sales enablement and training. We spent so much time on prospecting and negotiating and those types of things, but do we spend enough time on the skills of truly qualifying opportunities and doing it without putting the customer on the witness stand, right? Where we pound them with questions and then try to put together a formula to see if they’re right? I think we can do a better job of qualifying through the language we use of our own positioning. And you guessed it, it starts with transparency. It starts with embracing the things that maybe aren’t going to be a great fit for that customer and addressing those early so that if those things are showstoppers, you and your customer can part ways as friends earlier rather than pushing that can down the road and hoping that they don’t find out or they do find out later in the sales cycle. Or worse yet, if there’s a flaw, there’s something about your solution that’s not a fit. Would you rather that come from you or come from your competitors and you lose control of that message.
So embrace transparency and these ideas around what might not be a good fit. Your job is to sherpa the customer through their buying journey so that they make the best decision not only for themselves and their company, but for you, so that you have customers that not only buy, but they stay, they buy more and they advocate on your behalf.
So look at all three of those elements. When you think about this idea of, gosh, if we’re going to lose, let’s lose fast. There are some pressures that are unintended from the way that we measure the way that we monitor sales activity, the sunk cost fallacy, we need to create environments where losing is okay and doing it sooner is even better and leading with transparency, it not only sells better than perfection, but it also qualifies in and out more effectively and a lot faster.
So give those things a try. Would love to hear what you think and how it goes. And as always, you can reach out any time you want. All right. Thank you.
Scott Ingram: For more from Todd including the video version of this tip and a link to his book: The Transparency Sale. Just click over to DailySales.Tips/837.
Once you’ve done that. Be sure to come back tomorrow for another great sales tip. Thanks for listening!