Here’s one of my favorite year end sales stories… READ BRIAN'S STORY BELOW …”
Brian was presenting his forecast in front of his teammates and explaining why a deal that he had originally forecasted to close in the quarter came in three months later. Here’s his story.
Brian was excited that the account he had worked on for months had selected his software solution. After several weeks of ensuing price negotiations, a $300,000 purchase order was submitted into the customer’s capital expenditure software system (referred to by the customer internally as the “CES system”). Since several weeks were left in the quarter, Brian expected that he would receive the purchase order well before the year end cutoff.
In Brian’s mind the deal was done. The purchase order would be printed and signed and he forecasted the deal accordingly. However, Brian was quite surprised to learn that the rules-based CES system required that a purchase of that magnitude be approved by twenty-one different people. The purchase order had entered the cesspool of order approval.
Because of this elaborate sign off procedure, it would take another three months before all twenty-one signatures were gathered. In the meantime, Brian embarrassingly had to explain to his manager why a deal he had positively guaranteed would close wouldn’t.
His assumption about the purchase order turnaround time was dead wrong. If only he’d had the foresight to ask about the details of the procurement process before he committed the deal on his forecast. During a recession you should expect every purchase approval to take three to four times longer than normal. Because every organization exercises another excruciating level of diligence to ascertain whether or not the purchase is absolutely necessary.
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A very relevant and unfortunately more common occurrence in the world of sales. One of reasons I like asking about the procurement process is that it shifts the discussion to a conversation where the sales is assumed to be something that will happen.
On a side note Steve, I want to thank you for the most unique educational experience in my career. Your MBA class at Haas was like nothing I've experienced. We look forward to having you back. I know the buzz around your teaching style and innovative ideas continue to have far reaching impact. I hope it will seep into the sometimes outdated style of conventional academia. It has already significantly influenced my training regiments for my salespeople.
Posted by: James | January 01, 2010 at 12:49 PM