One of my sales coaching clients competed for a very large order last month. She didn’t win it and she was pretty discouraged. “I put so much time into this,” she said. “This one job alone would have put me ahead of all of last year. Now I don’t know what to do.”
“You need to do three things,” I told her. “One, you need to stop feeling sorry for yourself. You can do that tomorrow if you want. That gives you the rest of today to have your pity party. Two, you need to get back to prospecting, which you weren’t doing enough of when you were spending so much time on this project. And three, I think you need to understand why you didn’t win this order, which was really never anything more than a longshot.”
Three key factors
Here’s why this whole situation was a longshot. First, it was a prospect, not a customer. Second, it was outside of her company’s strike zone. And third, it was outside of her personal comfort zone. Let’s start with the latter two factors to make sure you understand.
This project involved multiple lots of short and medium-run quantities. All told, it was close to 120,000 8½” x 11” page equivalents. And while any individual 4,000, 6,000 or 8,000-piece lot would have fit perfectly and competitively on the company’s small format, four-colour press, in the aggregate, it was a project that would run far more economically on a larger press. The owner of the print shop recognized that, so he had her get pricing from a number of trade printers, and eventually he decided to run the job in-house, but to price it based on a 15% mark-up of the average of the trade printers’ collective pricing. “I know I wouldn’t have made any money on the job,” he told me, “but it would have covered a lot of overhead for the month.”
Ok, that’s semi-flawed logic, but let me come back to that in a moment. Before that, let’s talk about the situation being outside of the salesperson’s personal comfort zone. She is a small-town person – and I don’t mean that to be demeaning, but it’s an accurate description of her personality. The “buyer” was a group of people spanning several departments in a Fortune 500 company. Her initial contact in this company was a Marketing Coordinator, another young woman that she bonded with pretty quickly. But the “battleground” of the sale soon escalated to the Director and V.P. level, with some significant infighting going on between two of the principals as to exactly what they were going to order. The bottom line is that she wasn’t yet ready to compete at that level.
Now let’s consider the third factor. This was a prospect, not a customer. It turned out that my client’s price was competitive – “just a little bit higher” she told me. But it was not competitive enough to overcome the lack of any value-based relationship. To put it simply, it was a competitive offer from a relative stranger versus a competitive offer from a known quantity who has performed well in the past. If her price had been a little bit lower instead of a little bit higher, there might have been more of an incentive to give her a chance. But the combination of a price disadvantage and a relationship disadvantage is almost always a killer.
Losing battles, winning wars
Now, what I have to say next might surprise you. It certainly surprised this young lady. But I think this whole story contains a lot of positives. There are lessons that salespeople need to learn, and this situation was full of them. Lesson 1: Don’t focus on one opportunity at the total expense of your pipeline. Lesson 2: You’ll always have better success when you stick to your strike zone. Lesson 2A: You’ll make more money when you stick to your strike zone.
As noted, the owner’s logic was semi-flawed. Yes, a large job at low margins can make a large contribution to overhead, but it only contributes to profit if you’re well above your breakeven point. As it happened, this job would have turned a good month into a great month, but that’s not automatic. Remember, it’s not top-line volume that really determines your breakeven point; it’s gross profit dollars.
Lesson 3 may have been the most important lesson for this particular salesperson. If you’ll permit me a baseball analogy, she went from Double A to the Major Leagues pretty much overnight, and she wasn’t equipped to compete at that level. But she got a good look at what it’s like up there. Now she knows how far she has to go, and she also knows for sure that she wants to get there. I’ve been very impressed with her “new attitude and approach” to her job.
It’s been said that you can win the battle but lose the war. Fortunately, the reverse is also true. The key, I think, is what you learn in battle. The ultimate winner is the one who learns the most, from every individual victory and defeat.