Force Concentration – Get your first customer first

“Force Concentration is the practice of concentrating a military force, so as to bring to bear such overwhelming force against a portion of an enemy force that the disparity between the two forces alone acts as a force multiplier, in favor of the concentrated forces.”

Whether you’re a startup or an establish company, when you’re selling to your prospects remember that at any one moment, you’re not looking for 1000 customers to pay you $50,000 each. You need to find the next (or first!) customer. Then the next. Then the next. Ash Maurya refers to a similar concept in his “10x Product Launch” post.

battleship

For startups…
It’s vital to establish a sales model framework to understand how and why you are gaining each customer. Then you can begin looking for trends in how you acquired each customer. A few questions to ask yourself:

  • How did I find this client? Was this a warm introduction, a conference lead, at a Meetup Group?
  • What is the actual contract amount compared to my initial estimate? Did I sell 2 licenses instead of 10? Is the annual subscription set at $25,000/year instead of the $50,000 I projected?
  • How long did we spend in each stage of the sale (i.e. Needs Analysis, Evaluation of Option, Resolution of Concerns, and Implementation)? Were there any stalls in the process? How did I recover from them?
  • Who was the main driver at the client that pushed the sale through?

Each of these questions (and many, many more) will help you local trends that you can use to your advantage for the next client.

Related Post: Is your “Differentiator” critical to the decision?
Related Post: Plan Your Sales Strategy

For established companies…

Look for signals that your the purchasing process in your target markets is changing.

  • Why was the CTO more involved with this sale that other existing clients?
  • What budgetary constraints emerged?
  • Which competitors were in the mix during the decision process? Who did we unseat?
  • How long did we spend in each stage of the sale (i.e. Needs Analysis, Evaluation of Option, Resolution of Concerns, and Implementation)? Were there any stalls in the process? How did I recover from them?
  • Who was the main driver at the client that pushed the sale through?

Validating your sales model

…is crucial to proving your company’s survivability. And it starts with the next customer.

(“Force concentration” definition sourced from Wikipedia)

Systems Thinking for Enterprise Selling

Think of your target companies as complex systems…

… not just a group of individuals choosing to buy your product or not. Various players (your contacts) in the purchasing decision are non-constant, that is, they are individually fluctuating in their states. These fluctuations result in variance in their decisions and criteria throughout the sales process.Yes, I know what you’re thinking right now:

Scott, what the %$#CK are you talking about?

Trust me – keep with this line of thinking…

complex-systems-Large“Systems thinking” is the process of understanding how things, regarded as systems, influence one another within a whole. “System dynamics” studies the behavior of complex systems over time. In organizations, systems consist of people, structures, and processes that work together to make an organization “healthy” or “unhealthy”. As a result, they exhibit Bounded Rationality, and thus companies predictably make suboptimal decisions because of imperfect information, personal motivations, and individual incentives. These drivers can be intentional or unintentional. (I discussed “Satisficing” a couple weeks ago.)

How do you use risk-aversion and Bounded Rationality to your advantage in enterprise selling?

bounded rationalityIn a structured sales process such as an RFP response, position your product as the second-best option to the purchasing committee – the option that everyone can agree/settle on. Of course push for the top spot with each committee member. But if there are a few that have their own favorite vendor, ask them to commit to you as a second choice.

Say there is a 10-person purchasing committee. 5 people place Competitor A as their top choice and 5 people place Competitor B as their top choice. A stalemate exists. But… If all 10 of the deciders can agree that your product is the best alternate to either A or B, the committee may very well choose your product as the winner because it is the option that everyone can agree on.

I learned this long ago when selling textbooks to universities. For the largest courses on campus such as Principles of Chemistry and College Algebra, the academic departments had formal textbook committees. These ranged from 2-10 professors (or more!). As we reached the apex of the sales process, my manager would always stress that I should visit every committee member one last time and ask them to commit to my product as their next best choice (assuming it wasn’t already their personal top choice…). When a stalemate existed between option A and B, our option C was the place to settle.

Winner winner chicken dinner!

So what about noncompetitive situations where inertia is the competition?

In places where you are competing with an internal process or legacy system, remember that customers frequently choose to do nothing (see the HBR article below.) even if your product is better-faster-cheaper. Why do companies do nothing? Companies, just like people, are naturally risk-averse.

Your job is to flip the perception of risk upside down – show your target prospect that it is more risky to remain in their current state than to migrate to your product or service. This means that you must overwhelm them with confidence, proof, and an implementation strategy that shows that the sales process is only the start of your relationship.

Ask yourself – “How aim I positioning my product as a way to reduce risk for my prospects?” This may not be the only reason they choose to buy or not buy, but having this as part of your process will certainly help.

Additional Reading

HBR articles about the risk-aversion in companies:

Why businesses don’t experiment

Why customers don’t buy

More about Bounded Rationality and Satisficing on SalesQualia.com:

Sales Tip of the Day: A new old sales term: “Satisficing”

Sales Tip of the Day: Rationality & Decision-Making

More about Systems Thinking & Systems Dynamics

In 1975, Gerald Weinberg wrote “An Introduction to General Systems Thinking

System Dynamics and Systems Thinking on Wikipedia.

Sales Tip of the Day: A new old sales term: “Satisficing”

What is it?

Organizations eschew the “optimal” decision for an “acceptable” decision. (Think “satisfying + sacrificing.”)

How does it relate to sales?

Just because your product is better or will provide financially favorable outcome for your prospect, it may not be selected. Get used to it. But you can affect this process. Read this recent post -”Rationality & Decision-Making.”

Why is it new, but old?

Because Herbert Simon coined the concept in his 1947 book – “Administrative Behavior.”

And here are a few related posts detailing the role of Economics and Psychology in the sales process:

The Principle of Independent Judgements

The Scarcity Effects & Daas/SaaS Sales

And more Posts about Economic Theory & Sales…

And more Posts about Psychology & Sales…