The Top 4 Reasons Why Sellers Lose Deals and How to Avoid Them Blog Feature
Steve Bookbinder

By: Steve Bookbinder on April 27th, 2017

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The Top 4 Reasons Why Sellers Lose Deals and How to Avoid Them

Sales Tips | Sales Management

If you’re part of a sales organization, then you’ve probably either asked or answered: “Why did we lose the deal?”

Sales organizations around the world are commonly plagued with this question. And while there’s a broad range of reasons for losing a deal, which we will look at below, these reasons and challenges are not completely out of your control as a salesperson.  

Being successful in sales means making every effort to understand why you won or lost a deal by trying to learn something from each experience. You can use this information and the lesson that you’ve learned to create a strategy that will allow you to proactively address questions, comments, and concerns before it’s too late.

Now, let’s dive into the top 4 reasons sellers lose deals, and how to address these challenges by looking at ways to improve our own sales messaging and process.

Top Reasons Why Sellers Lose Deals and How to Avoid Them

Reason #1: No Contact Made Prior to RFP Submission

Customers want to reduce the stress of buying.

Oftentimes, this means creating a lengthy RFP process and document that lists all of their requirements and needs in an effort to eliminate uncertainty when making their decision.

However, to you as the salesperson, this can be a disadvantage if you aren’t involved from the beginning of the process.

Why? Let’s consider how an RFP is created.

First, do we know who wrote the RFP? Was it a Consultant, a Committee, or a Competitor? Knowing this will help you understand the associated implications of each role.

If a consultant wrote the RFP, you need to ask yourself the following:

  • Who hired that consultant?
  • Why that consultant?
  • Are they paid a flat fee, a percentage of the upside they produce, or a percentage of the budget they’re working with?

If it’s a committee that wrote the RFP, you’ll need to consider the following:

  • Who decided there should be a committee?
  • Who selected those committee members?
  • Has this committee ever worked together before?
  • If not, this could complicate the process due to committee members disagreeing or having difficulty voting on a single choice.

If a competitor wrote the RFP, which is not an ideal scenario, you’ll need to look at a few points to consider in this situation:

This is one of the worst positions to be in because a competitor, who already has a better relationship with the prospect, has already influenced the selection criteria.

But regardless of how the RFP was created, you can gain a competitive advantage and avoid losing the deal by “shaking up the process” and being the one who is able to influence the customer in advance, before that RFP is issued.

If you’re on the sidelines, patiently waiting to be invited to play, you’re probably too late. So, stop waiting around and get in front of the RFP process by making contact in advance of submitting your response.

Reason #2: Lack of Understanding about the Company’s Decision Making Process

Ignoring previous buying patterns or decision making behavior is risky business.

It’s simply not enough to ask your prospect, “Who did you buy from the last time?”

Why? Because you need to dive deeper into the conversation by exploring what changed in their organization in order to learn how that prospect thinks, how they gain information, what are their decision making preferences, and who have they deemed responsible for finding and vetting vendors that can provide a valuable solution?

The critical pieces of information you’re really trying to learn are:

  • Has this company bought this kind of solution before?
  • Has my contact personally bought this type of solution before?
  • How was the solution bought last time?
  • Was there a reason why it was done this way?

You want to learn your contact’s part in past buying decisions as well as who else was involved. If you go down that conversational path, you will learn the considerations and criteria that went into making that decision.

On the flip side, let’s say you’re working with a potential customer who has no past history of investing in a solution like the one you’re offering.

If this is the case, then they will need a path to follow…and you can provide that ROI+ path, but only if you take control of the sale by educating the prospect and then listening to their comments, questions, and concerns.

Even though they haven’t bought a solution like yours before, it’s still important to explore how they’ve purchased similar types of products or services in the past. While it won’t be exactly the same process, understanding their general buying behavior will help you gain further insights into their thinking.

Reason #3: Lack of Understanding about Your Contact’s Role and where they are in the Buyer’s Journey

Most sellers agree that the key to success is beginning the sales process with the right person or people.

But let’s face it, that’s easier said than done. As the decision making process becomes more complex with multiple influencers and decision makers, it can be challenging to ensure you’re communicating with the right people.

A common occurrence is when your initial contact says, “Yes, I’m the decision maker,” but then later in the process you find out that this very same contact now needs to talk to “their boss” or the person who is really in charge of making this decision.

Now, wouldn’t this have been helpful to know at the beginning of the sales process?

So...what went wrong?

Most likely the seller never really asked the right questions or took the time to understand their contact’s role in the decision making process or where they are on their path to purchase.

This is why it’s helpful to think about where your prospects are in terms of the marketing funnel: the top of the funnel is qualified but not yet looking because they are still framing their problem, the middle has put a name to their problem and is now educating themselves about their choices while the bottom of the funnel prospects are just about ready to buy and are actively seeking solutions.

Let’s start at the top. Generally speaking, the higher up in the funnel the buyer is, the higher up in the organizational chart you will need to begin.

Typically, members of senior management will start the process by sharing their big picture goals, timetables, and budget parameters and then designate a lower-rung person to find a solution that fits.

So you may have initiated the sales process with a member of the senior management team, but you’re likely to be working closely with the person designated to vet the options.

The person doing the vetting will most likely present the options they’ve found by either providing a spreadsheet of all possible solutions or one recommended solution.

You will want to ask about how this is handled so that you can develop your approach accordingly. Because if you’re 1 of 50 possible solutions presented in a spreadsheet, then you’ll want to make every effort to personalize the information to your prospect’s business in order to stand out. If your contact will be recommending one solution, then you’ve just found your new best friend and should begin developing a solid partnership with this person. The key here is to position yourself as a subject matter expert and confidant.

Now, if we are looking at a company or prospect at the middle or bottom of the funnel, then they will have slightly more urgency to get a solution in place. If this is the case, then they may look to someone in the organization who has experience purchasing this type of solution. Perhaps this person came from another company who is very familiar with this type of buying process and have worked with a company in the past who can provide a valuable solution.

Relationships can be the gateway to new business. If you’ve worked with someone in the past and they’ve moved on to another company, but in a more authoritative position, then this is a great opportunity for you as the salesperson because people like working with people they already know and trust.

So, depending on where a company is in the funnel, the influencer changes and so does the recommender, the budget holder, and the timetable setter.

Customers are more cautious than ever and your job of moving clients through the path to purchase can be a challenging endeavor. The lesson? You must have an understanding of the customer’s buying process, decision-making, influence structure and competing business priorities.

Reason #4: Failure to Provide a Compelling Picture of How Your Solution Fits

The greatest proof that your product and/or service really works is that others are buying from you and are more successful as a result of utilizing your solution.

To do this effectively, you can create a compelling picture through telling a story.

Sellers should craft a variety of customer success stories in order to explain how and why similar customers have bought from them as well as what a successful outcome and return-on-investment looks like.

That story works best if you can provide a “drill-down” of details such as:

  • What was the customer’s real goal?
  • How did you learn the customer’s real goal?
  • Explain how you used research data to help the customer better understand their challenges as well as their options for a solution.
  • Explain how you and the customer worked together to define benchmarks and key performance indicators in order to measure success.
  • Describe how you achieved results for the customer.
  • Explain why your customers look at you like a trust partner.

These are just starting points to consider, but you should develop about 10-12 of these types of stories to have in your back pocket for the right prospect.  Here are a few ideas of the types of stories you should have:

  • Why a large company bought your solution, how they utilized it, and what the results were
  • Why a small company bought your solution, how they utilized it, and what the results were
  • Why a company who was already buying from a competitor now buys from you and how you’ve complemented the other product/service from the competitor
  • Why a company who had previously solved their problem internally now buys from you and how you’ve complemented their internal solution
  • Why a company with a very similar challenge bought your solution, how they utilized, and what the results were

Sellers can make their stories more engaging and impactful by personalizing them. Show the prospect that you/your team have personal experience and measurable success working with clients with similar urgency…who shared the same challenges and frustrations in looking for a viable and affordable solution. Your story should build credibility.

This is particularly important since the number one reason customers don’t buy is lack of reassurance.

Sellers can enhance their story with details of how their own company was born out of a desire to solve these problems. Specifically, the story should include details of how your contact’s counterparts – that is, people in similar roles with similar responsibilities at your other clients, have felt before and after they bought from you.

The better the story demonstrates empathy with the prospect, the better the customers begin to visualize how you and your offering may really be what they’ve been searching for.

Also, if your contact has to tell others – and win them over – you must teach your contact the story so that they have a way to effectively communicate your story to the influencers that you may never personally meet.

Make sure you don’t assume what you did for your last sale will automatically work for your next. Every meeting and RFP are different so make sure you customize your approach and your pitch to meet their specific needs.

Now that you understand what can go wrong during the sales process, and how to avoid these common sales mistakes, you’re one step closer to landing your next deal.

Ready to take it further? Download our free guide to help you master your competitive sales skills:

4 Ways to Master Your Competitive Sales Skills


About Steve Bookbinder

Steve Bookbinder is the CEO and sales expert at DMTraining. He has delivered more than 5,000 workshops and speeches to clients all over the world and has trained, coached, and managed more than 50,000 salespeople and managers. Steve continuously refreshes his training content to reflect his latest first-hand observations of salespeople across industries and regions. Through him, participants in his workshops and coaching sessions learn the best practices of today’s most successful sellers and managers across industries. Steve understands that sales is a competitive game. To outperform competitors and our own personal best results, we need to out-prospect, out-qualify, out-present and out-negotiate everyone else, not merely know how to sell. Through his specialty programs in Pipeline Management, Personal Marketing, Great First Meetings, 2nd-level Questioning, Sales Negotiating, and Sales Coaching, Steve trains sales teams to master the skills they need to overcome the challenges they face in today’s world… and keep improving results year over year.

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