What do you do to fix this?

11 replies
Recently, our sales rep has lost a number of sales. (Her average lately had been really good - around 75% closed - but now I think that was just a lucky streak.)

Four people in the last week have gotten quotes and mockups for big signs ($10K+) from her, then turned around and used the info to get a better deal from a competitor. And using the mockups as a base for the design, so they get a head start in the process with Company 2.

Basically, she is doing all the work, and the competitor just knocks off some money off the price (which they can do because they aren't doing a lot of the initial work - that's been done by us), and gets the deal.

We have wording in our forms that they can't use the mockups unless they pay for them, but enforcing that is costly.

It's a waste of hours of time for the sales rep.

I suggested a "good faith" deposit to try and ensure she isn't wasting her time, but that idea was soundly shot down.

Any other suggestions?
#fix
  • Profile picture of the author Jason Kanigan
    "Do you (prospect) believe all sign manufacturers are essentially the same, and the only difference is price?"

    "Is price the #1 and only consideration here?"

    She'll find out a lot by asking these two questions and listening to the answers. Maybe asking a couple follow-up questions after each.

    I'm sure you can go through the "What If" yourself--"What if they say Yes, all the signmakers are the same and I just want the cheapest product?" You/She can react to that. But now you know.

    This happened to me in the accounting software field. Then I made sure it didn't happen again...other than me starting to do it to others. It's also why I'm wary of CTOs and such who believe their marketing is going to set the prospect up so well for the order, "If Only" they can get in early enough to their thought process. No. Things have to be done during the education process to ensure the supplier is set up as the one and only right solution. Otherwise this "Swoop In And Win" thing will keep happening.
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    • Profile picture of the author Robscom
      Originally Posted by Jason Kanigan View Post

      "Do you (prospect) believe all sign manufacturers are essentially the same, and the only difference is price?"

      "Is price the #1 and only consideration here?"

      She'll find out a lot by asking these two questions and listening to the answers. Maybe asking a couple follow-up questions after each.

      I'm sure you can go through the "What If" yourself--"What if they say Yes, all the signmakers are the same and I just want the cheapest product?" You/She can react to that. But now you know.

      This happened to me in the accounting software field. Then I made sure it didn't happen again...other than me starting to do it to others. It's also why I'm wary of CTOs and such who believe their marketing is going to set the prospect up so well for the order, "If Only" they can get in early enough to their thought process. No. Things have to be done during the education process to ensure the supplier is set up as the one and only right solution. Otherwise this "Swoop In And Win" thing will keep happening.
      How did you make sure it didn't happen again? Did you qualify better? (Like asking the questions you suggest?) Or did you also put other safeguards into place?

      What is a CTO?
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      "Do. Or do not. There is no 'try.'" -- Yoda
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      • Profile picture of the author Jason Kanigan
        Originally Posted by Robscom View Post

        How did you make sure it didn't happen again? Did you qualify better? (Like asking the questions you suggest?) Or did you also put other safeguards into place?

        What is a CTO?
        I'm not giving all my secrets away for free ha ha. I'm giving you the direction. Yes, qualify better. I pointed you towards how to fill in the blanks.

        CTO stands for Chief Technology Officer.

        In a content marketing strategy, communication is usually all one-way, like television. You don't have the opportunity to ask questions like this. So you have to think it through better.
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        • Profile picture of the author Robscom
          Originally Posted by Jason Kanigan View Post

          I'm not giving all my secrets away for free ha ha. I'm giving you the direction. Yes, qualify better. I pointed you towards how to fill in the blanks.

          CTO stands for Chief Technology Officer.

          In a content marketing strategy, communication is usually all one-way, like television. You don't have the opportunity to ask questions like this. So you have to think it through better.
          I didn't mean to ask too much. I'm sorry.

          Thank you for your help. I appreciate it.
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          "Do. Or do not. There is no 'try.'" -- Yoda
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  • Profile picture of the author Chris Grable
    Robscom,

    What benefit do they gain from going to your competitor? Are they that much cheaper... faster... better? Is this an indication that you should adjust your offerrings in some way?

    If you can figure that out... you may be able to "design it out" of the sales process. If it is just cost... should you adjust yours down?

    Do you present the mockup in person or electronically? If you do it in person.... you do it in person... can't you offer an incentive to commit at that point. "Here's your mockup... sign here and now and I'll knock 10% off the deal."

    There is an appropriate trade to be made between holding to your pricing model and generating volume. Only you are going to be able to see that.... but if nothing else.... assuming you have spare capacity.... generating enough revenue to cover costs keeps you from spending your own money on labor.

    Then again.... this might be an aberration. Is there any link between these customers that would explain them all adapting the same strategy at essentially the same time?

    Good luck!
    Chris
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  • Profile picture of the author RR151
    Pricing is always a difficult process especially if you are first to quote with clients that intend on leveraging your quote to get a better price from the competition. The competition might be using this technique as a tool to get business.

    You said your sales person was closing 75 percent then nothing so something has changed. Maybe the competition is asking the client to get a quote and mock up from you for free and then they will use and beat your quote by X%.

    Another thought…I had a client that was spending a ton of time developing quotes within the fence building niche. Each quote took between 30 to 50 minutes to make then he was closing less than .5% and it was taking all of his time with little success. I think you are in the same boat as the fence guy in the process of building sign mock ups for each perspective client.

    Solution was to create an online calculator that was used to create an estimate not a quote for each fence project. The calculator had 10 different fence types that each client could use as a sample. To use the calculator it required just an email address, which was asked for and used to deliver their estimate.

    This cut down the time needed to find a client that was truly interested in getting the fence built because the estimate price was pre-qualifying the next client. The online calculator was also used to connect to the clients that wanted to be contacted.

    To get the exact quote the prospect was asked for more contact information like name, address and phone number. He was now using a system in getting the client to determine the type of fence they wanted and with that the calculator’s estimate was now price conditioning each new contact.

    He was now advertising a free fence estimate tool as a benefit to working with his fence business…Get your no obligation “Free Fence Estimate Here”…It was his unique selling proposition and he was not just advertising his static website like the competition…RR
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    Tell me and I forget. Teach me and I remember. Involve me and I learn. Benjamin Franklin
    People buy when THEY are ready to buy, NOT when you are ready to sell. Steve Rosenbaum

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  • Profile picture of the author Jason Kanigan
    Way back in my early days right out of business school I had the same problem: churning out expensive-to-produce quotes for people who didn't buy.

    The estimator is a good tool because it pre-qualifies prospects before they ever speak to you. Here's a number. What do they think of it? If it scares them, or they can't afford it, you'll never be bothered by them. If it's in their ballpark, they'll contact you.

    Now this is only a good idea if you already have a steady, numerous stream of inbound leads. If you have a trickle, you'll qualify too many out--this isn't selling, and you need to sell at that point.

    But if you do have more leads than you can handle, and are sick of wasting time with tire-kickers, the estimator is very effective for screening.

    A consulting book I'm reading calls this the "orange juice test." Works for buyers as well as sellers. In the example, the buyer asks something like, "I want a tall, freshly squeezed glass of orange juice for each of the 300 breakfast guests at my convention at 7AM in your facility."

    The first test, this "orange juice test," is for the seller to come back with, "Sure, we can do that. And here's what it will cost."

    Those who are vague or say they can't do it are automatically stricken off the supplier candidates list.

    As for the price...well, it's then up to the buyer to decide what they think about it. That's Test #2. But the supplier has to be able to fulfill the request, and give a rate for doing so.
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  • Profile picture of the author RR151
    To get new leads,

    Unaddressed direct mail in a specific area was used to stir the pot so to speak. My guy used the estimator as his tool with screen captures for the unaddressed post card. Everyone was invited to use and find out what a new fence would cost them. He picked old areas of his city that had ton of fences that needed repair or replacement...RR
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    Tell me and I forget. Teach me and I remember. Involve me and I learn. Benjamin Franklin
    People buy when THEY are ready to buy, NOT when you are ready to sell. Steve Rosenbaum

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  • Profile picture of the author Robscom
    Thank you for all of the feedback. It really gives me some things to look at.

    She closed 3 deals late Friday, so....maybe it was just a dry spell?

    I think it's worth looking at the competition and seeing if something is going on.

    We're talking about hiring someone (fresh out of college student, basically) to do nothing but work on mock-ups. This will free up the sales rep to focus on sales.
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    "Do. Or do not. There is no 'try.'" -- Yoda
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    • Profile picture of the author RR151
      Originally Posted by Robscom View Post

      We're talking about hiring someone (fresh out of college student, basically) to do nothing but work on mock-ups. This will free up the sales rep to focus on sales.
      That is a great idea.

      These mock ups are the sign design for a specific client, right? They are custom designs that are showing what the sign could look like...

      What if you add one step in front...Maybe, sales uses a book of past work and past mock ups as an opening. Use it as a tool used to narrow the scope of work.

      Then if they would like a custom mock up that is specific to their needs you charge a nominal fee used to cover your design time...If they buy from you the nominal fee is applied to the contract.

      This would more often than not pre-qualify the prospective client regardless to the amount of money they pay for the mock up design time...

      Oh also make it clear that the mock up is your property and not to be shown to competitors. It is your content so next be sure to add copyright by your company name and date to all mock ups.

      Just a thought, RR
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      Tell me and I forget. Teach me and I remember. Involve me and I learn. Benjamin Franklin
      People buy when THEY are ready to buy, NOT when you are ready to sell. Steve Rosenbaum

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