The Trap of Chasing Bad Business
“This opportunity could be really huge,” says at least one salesperson on every Sales Leader’s team at some point in time. We see it almost every month. Sales people are always looking for that big win that could score them a huge commission. But often times that big opportunity is what we would call “outside the box” of what our ideal client typically looks like. We would have to bend our pricing, systems and processes to win it, deliver it and support it. So is it worth it? Maybe and maybe not.
We find that the highest performing sales organizations have done a great job in defining what their ideal client looks like and they stick to chasing those clients. However, we also see the large majority of sales people are not very good at this. Instead, they chase anything that moves. I once asked a salesperson who the ideal prospect was for him. He responded “if they can fog a mirror or they have a pulse, I am chasing them.” I admired the enthusiasm, but I could almost guarantee that this person was going to chase business that he had little chance of winning. In fact, people like this, even if they are hardworking sales people, will always struggle to hit their numbers because they don’t spend their time wisely. When I ask the top sales people in an organization who they like to chase, they give a much more detailed response. It usually sounds something like “The prospect is between $XM and $YM in revenue, are typically in the ABC vertical, have specific needs around _____ and are currently using XXXX to address their needs. Whenever I find a client like that, I win almost every time.” When I ask these same individuals what they do if a prospect does NOT meet that criteria, I typically here something like “Why would I want to spend my time with them if they are not a good fit?” I love this line of thinking.
Defining your ideal client is not just an exercise. By doing this well, you are giving your sales team focus so they can work on the prospects and opportunities that give them the best chance to win. Close rates almost always go up when you work on clients that fit your ideal client profile. So why don’t all sales people do that? A few reasons:
- They are afraid to walk away from any business. They think they “have a shot” at everything, so why not take it.
- The ideal client has not been defined for them. Basically, the sales leadership has left it up to the salesperson as to who to chase. Without direction, they can go in all kinds of directions.
- It has been defined, but nobody holds them to it. Some sales leaders have defined it well, but when a salesperson brings an opportunity outside the box, they do nothing about. They let them work the deal and waste their time.
So how do you get past this? Spend time with your team to define what a good prospect looks like. Evaluate your past deals to analyze the common characteristics of those clients that were great deals for the company. Those are the deals where your solution fit them well, they valued your solution and didn’t beat you up on price and the company was able to deliver and support them well. Now look at all those customers and see what is similar about them. Look at company size, specific needs they had, what they valued, who their customer was, etc. If you can spot a common trend among those customers, you are onto something. Then focus your team on everybody that looks like that and watch your close rates start climbing. And, don’t be afraid to tell your salesperson to stop chasing bad business. They may squawk, but they will thank you later.