How the Sales Industry Colludes in Failure
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 ‘Success’? 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 hasn’t anyone ever said, “Gee. Maybe a 5% close rate is 95% failure. Maybe it’s a sign something’s wrong? Maybe it’s not a solution-placement/content/
It’s 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 – indeed, all that’s possible with the current Solution-Placement focus! – there’s 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 ‘new new’ sales models, it’s 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 buyer’s decision process, hoping beyond hope to convince buyers they need our great solution, sellers get push back from a buyer’s good-enough-functioning system not equipped for change, and finding only those who have completed their comprehensive decision making – the low hanging fruit (5%). That’s 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
- buyers will be persuaded by ‘good’ content that differentiates/explains/
convinces of benefits;
- buyers will know what to do with our brilliant content;
- with good marketing and sales outreach, and a prospect with a need to match, we just need to find the button that will get them to buy.
It’s never recognized that prospects can’t even hear what we’ve got to say or know how it’s relevant before determining their readiness to change and buying anything; it’s never mentioned that with all the marketing, all the outreach, all the never-ending attempts to ‘get in’, nothing we’ve done for decades has significantly shifted our close rates. It’s because we’re 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: we’ve got nothing to sell if they’ve got nothing to buy, and doing what we’ve been doing hasn’t produced appreciably different results – and we can’t 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 Facilitation® 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 – all with control group studies – 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. Here’s 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 didn’t). 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 ‘Nuts’ and that Jim was just ‘lucky’. 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 ‘Thank You’ call from my client, I asked if we’d be training the entire team. “No, the model is “too controversial.”
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 – the manufacturing, delivery, billing, etc. all maintained a much slower sales cycle. They didn’t 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). They’d 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 ‘good enough’ and the ‘known’. That’s right. Like the sales industry, my clients preferred lower revenues than change.
HERE’S THE REAL DEAL
Here are the underlying ‘givens’ that we ignore using the sales/Solution-Placement approach alone:
- Buyers only buy when all of the idiosyncratic change management and people issues buy in and reach consensus. Buyers MUST do this anyway – with you or without you. It might as well be with you; you just need an additional skill as a sales is inadequate here.
- Buyers don’t want to buy anything; they just want to resolve a problem. They’ll buy something only when all else fails.
- Buyers buy using their own buying patterns, not a seller’s selling patterns. If the sales approach goes against the grain, buyers will choose a different vendor or solution.
- A buying decision is a change management problem: the Current State must shift in unknown ways to adopt something new, or face offending the entire system that will then resist.
- There is no way to ‘gather information’ from one person when it’s not clear that s/he is speaking on behalf of a complete Buying Decision Team who have determined how a solution would need to match their buying criteria (only a small part of which is a solution).
- Conventional information gathering is biased by the needs of the seller to ultimately place their solution and overlooks important data about decision making, buying patterns, group assembly.
- Buying involves a 13-step series of idiosyncratic, sequential, systemic, personal change decisions that an outsider can never be privy to but can facilitate. Selling and buying are confined to steps 10-13 and with that focus, there is no need for buyers to invite us in earlier. I’ve written extensively about this. www.dirtylittlesecretsbook.
- The length of the sales cycle is the time it takes buyers to get buy-in for organizational, job, and personal change and fallout. It’s got nothing to do with a purchase, or a price tag, or even a need. Maintaining systems congruence is sacrosanct.
- When we get to an appointment to gather data and introduce ourselves, and only one or two people are present, we have no idea what stage of decision making they’re at or what they’ll do with our information after we’ve left. And we often pitch something the Buying Decision Team hasn’t agreed they need yet. Not to mention only those in steps 10-13 will see us and by then sellers are in a competitive situation.
- Making Step 1 ‘Getting the appointment’ discards about 40% of buyers who will buy once their change issues have been sorted out.
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 team’s 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, it’s all taking place with a Solution-Placement bias. So long as the intent is to sell, an outsider will get resistance: there’s no way an outsider can ‘understand’ prospects during their change/decision/systems activities as they lie deep within the buyer’s 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 you’re selling matches their buying criteria once they’re ready (much more quickly than if they do this on their own), you’ve made a very quick sale with little competition. Think about it. You don’t buy the way you sell. The sales model is a solution placement model never meant to facilitate consensus, buyer readiness, or systemic change.
It’s fixable once we stop colluding and perpetuating the myth of success; instead of redefining failure to convince ourselves that what we’re doing is optimal, let’s just concede that what we’re 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 has been coding and teaching change and choice in sales, coaching, and leadership for over 30 years. She is the developer of Buying Facilitation®, a generic decision facilitation model used in sales, and is the author of the NYTimes Business Bestseller Selling with Integrity. Sharon Drew’s book What? Did you really say what I think I heard? has been called a ‘game changer’ in the communication field, and is the first book that explains, and solves, the gap between what’s said and what’s heard. Her assessments and learning tools that accompany the book have been used by individuals and teams to learn to enter conversations able to hear without filters.
Sharon Drew is the author of one of the top 10 global sales blogs with 1700+ articles on facilitating buying decisions through enabling buyers to manage their status quo effectively.
She can be reached at email@example.com or 512 771 1117.