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How the Sales Industry Colludes in Failure
Guest articles > How the Sales Industry Colludes in Failure
by: Sharon Drew Morgen
Would you consider a baseball player with a 95% failure rate Successful? Would you choose a surgeon with a 95% failure rate? Can you think of any field but sales, with an industry-standard close rate of 5%, that considers 95% failure âSuccessâ? Using targets, commissions, hiring, and profits based on a 5% close rate, the field of sales colludes in perpetuating the lie that failure is Success. Why hasnât anyone ever said, âGee. Maybe a 5% close rate is 95% failure. Maybe itâs a sign somethingâs wrong? Maybe itâs not a solution-placement/content/pitch/buyer/marketing/technology problem.â
Itâs possible to have much, much higher close rates. But that would demand the industry admit a problem. By colluding that a 5% close is industry standard â indeed, all thatâs possible with the current Solution-Placement focus! â thereâs no need to change.
THE MYTH OF SALES
When I began selling in 1979 the average close rate was 8%. Now, with our new electronic capability, sophisticated on-line marketing software, and ânew newâ sales models, itâs down to 5%. Why? Because our current buying/selling environments are far more complex; consensus and change management are now necessary elements for buyer-readiness; and our Solution-Placement focus is designed to find only the 5% who are ready to buy.
By starting at the end of a buyerâs decision process, hoping beyond hope to convince buyers they need our great solution, sellers get push back from a buyerâs good-enough-functioning system not equipped for change, and finding only those who have completed their comprehensive decision making â the low hanging fruit (5%). Thatâs right: Sales pushes and pitches, presents and proposes, hopes and waits, using activity developed to find the 5% who are ready. Sales has never questioned its assumption that
Itâs never recognized that prospects canât even hear what weâve got to say or know how itâs relevant before determining their readiness to change and buying anything; itâs never mentioned that with all the marketing, all the outreach, all the never-ending attempts to 'get inâ, nothing weâve done for decades has significantly shifted our close rates. Itâs because weâre pushing in from the back end and getting resistance, rather than entering at the beginning. More on this in a moment.
Look at this this way: weâve got nothing to sell if theyâve got nothing to buy, and doing what weâve been doing hasnât produced appreciably different results â and we canât use the problem to fix the problem [Remember Einstein?]. The issue demands new thinking, new biases, new goals, and new skill sets. Let me share what I did to fix the problem with my tech start up in London in the 80s.
Going from a sales person to an international entrepreneur, I recognized the low close rate problem as one of focus: sales focuses on placing solutions; buyers focus on solving (business) problems with minimal fallout. And since buyers can buy only when there is appropriate buy-in for change, management of fallout, and consensus among users (all steps necessary in some form regardless of the size or price of the solution), our efforts to find buyers or prospects is like seeking a needle in a haystack.
I figured out a solution to help my sales teams enter buyer interactions as change facilitators who nurture buyer-readiness first: I developed Buying FacilitationÂŽ as a facilitation/leadership tool to help buyers recognize and achieve their most efficient change processes without biasing them or being purchase/product focused. We ended up with a 35% close rate (up from 9%) from first call, regardless of the size of the sale (all buyers/prospects go through some form of this, even if unconsciously).
In 1987 I began teaching the model to clients, then left my business to teach the model full time to global corporate clients. Yet my results â all with control group studies â were largely ignored by the mainstream: I repeatedly came up against the collusion that perpetuates failure and the status quo, even in the face of obvious success. Hereâs an overview of some of the resistance:
Working with Morgan Stanley in the 1990s, we achieved a 25% increase in one month over the control group. Follow on: the MD sent someone to Chicago to check on a man who purportedly had a similar buying-based model (turns out he didnât). Why not just hire me to train everyone? Because I was a woman. He actually said that to the person he sent to Chicago.
A group at William Blair & Co. (brokerage house) went from a $400 million revenue to $1.3 billion in just under four years. Colleagues wondering how Jim achieved those spectacular numbers got a copy of my book Dirty Little Secrets from a carton he kept under his desk. Invariably they said the book was âNutsâ and that Jim was just âluckyâ. With a near-miraculous success happening before their eyes, this group preferred to devalue the results and continue failing rather than even trying to change.
Working with Boston Scientific, we achieved a 53% increase over the control group. During the âThank Youâ call from my client, I asked if weâd be training the entire team. âNo, the model is âtoo controversial.â
Kaiser Permanente went from 110 visits and 18 closed sales (7% close rate) to 27 visits and 25 closed sales (600% increase). They fired my client, saying that training their 1500 sales folks in the new material would create a major disruption; they disbanded and re-assigned the folks I trained so the new skills would be subsumed.
Proctor and Gamble had a 15% increase in one month (huge in a behemoth company of this size). They said it would cost millions of dollars to change the systems that maintained their status quo â the manufacturing, delivery, billing, etc. all maintained a much slower sales cycle. They didnât do further training.
I could go on and on. Crazy stuff. Incontrovertible proof that adding different skills and shifting the focus closed more sales and wasted a lot less time (in vastly shortened sales cycle, creating more ready buyers, and early dismissal of those who would never buy). Theyâd prefer to maintain failure? Build and compensate sales forces on 4-6% close rates? Lose market share, hire 9x more sales staff with high turnover, pay more in training and travel? Yet the sales industry is doing what all systems do: eschew greater success to maintain âgood enoughâ and the âknownâ. Thatâs right. Like the sales industry, my clients preferred lower revenues than change.
HEREâS THE REAL DEAL
Here are the underlying âgivensâ that we ignore using the sales/Solution-Placement approach alone:
Believe it or not, there is only one issue causing the entire set of problems above. Only one. Sales pushes solution data at the wrong time, starting at the end of the Buying Decision Path, and finds only that group, that person, that shows up at that time, with everyone else ignoring or resisting. You would never buy a computer without doing research, talking to friends to help you gather and recognize all necessary criteria. Lots of personal decisions. As a team member in a company, you would never bring in training without the teamâs input, or an attempt to try to fix the problem on your own first, or talking to current vendors, or getting referrals from colleagues. Lots of group decisions.
Research is showing the deterrent to sales success is our difficulty getting in to The Pre-Sales Process. While sales has attempted to resolve this issue by creating clever ways to get in from the outside (Buyer Personas being one) and is trying new tools to lead customers through to their buy cycle, itâs all taking place with a Solution-Placement bias. So long as the intent is to sell, an outsider will get resistance: thereâs no way an outsider can âunderstandâ prospects during their change/decision/systems activities as they lie deep within the buyerâs culture. Before any purchase, buyers must figure out how to manage the resultant change and disruption congruently and until they do, theyre just not ready to attend to our needs to sell.
But as outsiders, we can still understand how systems change and serve by helping prospects discover their own steps to Excellence; if what youâre selling matches their buying criteria once theyâre ready (much more quickly than if they do this on their own), youâve made a very quick sale with little competition. Think about it. You donât buy the way you sell. The sales model is a solution placement model never meant to facilitate consensus, buyer readiness, or systemic change.
Itâs fixable once we stop colluding and perpetuating the myth of success; instead of redefining failure to convince ourselves that what weâre doing is optimal, let's just concede that what weâre doing is Failure and do something different. Put together a strategy to add some sort of leadership/coaching/consulting practice based on facilitating change (not based on manipulating a sale). Do this consistently in marketing and content, cold calls, prospecting, telemarking, presentation meetings, and your large sales. The question is: Do you want to sell? Or have someone buy? We need both for success; they each demand a different skill set.
Sharon Drew Morgen is the author of 9 books, including NYTimes Business Bestseller Selling with Integrity, and What? Did You Really Say What I Think I Heard? She has developed facilitation material for sales/change management, coaching, and listening. To learn more about her sales, decision making, and change management material, (www.dirtylittlesecretsbook.com) go to www.sharondrewmorgen.com. To learn more about her work on closing the gap between what’s said and what’s heard, go to www.didihearyou.com. Contact Sharon Drew for training, keynotes, or online programs at firstname.lastname@example.org. Sharon Drew is currently designing programs for coaches to Find and Keep the Ideal Client, and Lead Facilitation for Lead Generation.
Contributor: Sharon Drew Morgen
Published here on: 20-Nov-16