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 sclark@newschoolselling.com and let me know.

If you have to ask the question, you are headed down the wrong track. If you give away your knowledge in a written proposal before the prospect has committed to give you a yes or no decision, you are setting yourself up to lose. Failure to do this will almost certainly produce an “I want to think it over” response from the prospect. At that point you have just been “rolled” and have become victim to Free Consulting. After all, when the prospect has all of your information why do they need you?

To avoid this what should you do? Only deal with prospects with which you can quickly develop a relationship of mutual trust and respect. These are people who need, want, and can afford your services and are willing to buy from you. When there is mutual trust and respect, the prospect will share information, and make commitments to do business with you if you can meet his or her conditions of satisfaction.

These conditions are agreed upon before any work is done or any analysis or proposal is generated. Before any proposal is generated the prospect must decide that you are the person they want to work with. Instead of closing at the end of the proposal process you are, in effect, closing up front. Before the prospect buys your product or service they must first buy you. As you work with the prospect to mutually decide on the solution to their problems and the costs associated with the solution, the proposal will verbally evolve by mutual agreement.

Prospects with whom you have a relationship of mutual trust and respect will be honest about this process. Prospects who refuse to be honest and try to make you jump thru hoops, like some trained animal, simply are not worth the effort. The best thing you can do when you encounter them is to disqualify them quickly and move on to prospects that will be real. This is not easy or natural. It requires a lot of courage and training to do this consistently.