7 Obstacles to Prospecting
With so many advantages and benefits to outsourcing, why then are salespeople experiencing barriers and objections from prospects at every turn during prospecting?
The seven obstacles listed below are some of the most common reasons your company’s prospecting will require relationship management, empathy, active listening, and strategic, intentional action. If you stay conscientious, you will avoid making the mistakes of your predecessors and develop trust, brand loyalty, and advocate clients.
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1. Previous Providers Let Your Prospects Down
Many small, mid-market and enterprise organizations have previously contracted some level of outsourced solutions within recent years, and many may have already attempted to find a product/service provider but have been disappointed. Often, they have been asked to sign long-term deals based on contract terms and pricing that have little relevance six months down the road.
Sometimes, the agreed deliverables and expectations were simply not met, resulting in frustration, irritation, and communication breakdowns that started with their sales person and continued throughout their failed delivery.
Results: Your prospect may not want to get into long-term contracts anymore, shirk the responsibility of reviewing or renewing contracts, and lead to all stakeholders consuming or wasting valuable resources. Give them a reason to hang in there with you by tying your work to specific outcomes, milestones, and yes, even revenue.
2. They’ve Been Purposefully Under-Quoted, Under-Scoped, and Under-Served
Some potential prospects have been underserved by their prior professional services vendor. The service provider intentionally under-scoped and under-quoted the prospect’s requirements to get the price down and win the account. The supplier later hit them with demands for more money to compensate for change orders that were probably unnecessary had the vendor salesperson understood the prospect’s needs and not been serving their selfish interests.
Results: Based on the prospect’s prior experience, they are likely to be less trusting of future salespersons, even if the new vendor offers real solutions that will meet their unique needs. If you use a value-pricing strategy as our friend Kirk Bowman at artofvalue.com suggests, you can provide the full solution as a top-tier pricing choice along with subsequent tiers that reduce the price along with the services they’ll have to give up by selecting a lower tier solution.
[Tweet “Giving prospects choices up-front is the most honest way to price your services.”]
3. The Prospect’s Win-Lose Strategy Had an Unintended Consequence
Every prospect’s business looks for ways to remain as lean as possible, and if they are to outsource, there may be pressure to beat up the vendor to get the best price, shorten deadlines, and demand more services for less money.
[Tweet “The prospect, turned client, will feel they’ve won, in actuality, neither the client nor supplier in this scenario will end up a winner.”]
Initially and to their own detriment, the professional services supplier may immediately realize they’ve made more concessions than intended in contract negotiations, however, they are likely to move forward regardless. The supplier will pin hopes on the project performing well and use it as a way of getting a phase II project to make up the difference. In effect, they are using the first project as a near-loss or loss-leader. Hidden costs come to light as the relationship/partnership continues and the seeds of animosity, frustration, and negative talk about the each other takes on a life of its own.
Results: These relationships almost never see another project, even if the first one has a positive outcome. Get your leadership team together and review these “loss-leader-type” projects. Assuming no second project opportunity arises, is it worth taking on this client? There may be strategic reasons for taking on a project that is not profitable monetarily. Be alert to the risks posed by a project of this type as well. Be sure everyone understands what those are in advance. Proceed with caution.
4. They’ve Been Bitten Before
Short term fixes or “workarounds” were offered by a prior vendor that initially solved an issue but had an unintended consequence on their business long-term. The relationship with the other supplier(s) who provided the short-sighted solution may be irreparably damaged as complaints about the problems created by the solution become more prevalent within the organization, adding to the solution users’ frustration over time.
Results: This prospect will likely over-analyze and suffer from analysis-paralysis due to fear of making another mistake. Present solutions that have a long-term or, at least, a longer-term positive outcome. A thorough review of existing systems, accounting software, for example, can assist you in submitting the right solution set. Steer clear of implementing a solution that doesn’t incorporate where the client company is growing in the next five, seven, or even ten years.
5. Transparency Is a Major Issue
The more complex the contract, the more ways the prior IT services provider had to hide overall margins.
Results: It’s hard for the client to have any trust if they can’t understand and oversee what the service provider is doing. Create easy-to-understand proposals. Schedule and more importantly, keep regularly update meetings that share relevant information each stakeholder in the meeting needs to know to reinforce their confidence in the project performance and your company.
6. Preparing to Outsource is Hard Work
The prospect probably knows how much work is ahead to prepare for outsourcing to their next managed services provider. They may desperately need a solution to their day-to-day pain-points, but the time to properly address it with a planning session, action plan, RFI, RFQs, or bids is a constraint on already limited resources.
Results: It is daunting to consider outsourcing. Prepare an up-front checklist for steps that can be delegated, taken, and checked off. Bite-sized, achievable steps will demonstrate that they can collaborate with you and also help to facilitate a smooth transition to your solution.
7. They Have Been Duped
Your prospects have found that your predecessors didn’t have solutions for their unique needs, weren’t the innovators they promised, and were inflexible both in their delivery and in their infrastructure. Your predecessors didn’t even really understand the prospect’s business, promising to help manage costs and services but mostly missing their requirements altogether.
Results: Your prospect already suspects that you are not interested in their needs and only want to sell them whatever serves you best. Deploying listening tools, and your good-old-fashioned active listening skills, you can find out more about what the prospect is looking for.
Sometimes obstacles exist because someone before you failed to deliver the promised outcomes. Understandably, prospects will be wary of your solution based on their past negative experiences. They will have a long memory so prospecting them may take a bit longer. You may become impatient with the pace they are willing to go. Never let them hear your impatience. Consistent follow-up and action will speak volumes to these prospects. If they can’t trust you with the little things, they are going to struggle to trust you with the big things they need to resolve. Listen, not to reply, but to understand WHAT pain-point they need to address and more importantly, WHY they need to address it. Communicate back, in writing if you need to, what you heard them say. Remember, a little empathy goes a long way toward developing a trust-based relationship with someone who could become your next advocate client.
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