I regularly quiz my customers on fractions. Specifically I want to know about 'the win rate.'
Your sales organization answers dozens - if not hundreds - of RFPs every year. You turn on the proposal machine, engage your creative and/or marketing people, and generally draw down company resources and good will in order to do battle with a fixed set of competitors.
And for what? If you're like others in our industry, the answer is 17 percent. Go to market a hundred times and you'll win 17 deals. Be twice as good as everybody else, you'll win 34. So if you are awesome... you still lose two of every three times your organization competes. If you're OK with this - and you think your organization can live with these fractions - then stop reading now and get back to your day. If not, read on.
This week's Drift is proudly underwritten by AppNexus. The AppNexus Publisher Suite helps maximize monetization for Publishers today with tomorrow's technology through integrated, intelligent, and open ad serving and programmatic selling solutions.
There are two ways to fix the broken fraction that is your win rate. You can continue to try to make the top of the fraction -- the numerator -- bigger. "Let's not be satisfied winning 34 percent of the deals! We won't settle for anything less than 40 percent!" Good luck with that. Buyers today are armed with tons of information before they ever engage with you. And it costs them less than nothing to invite way too many companies into the competition for their business. A buyer sending out an RFP in 2016 doesn't even have to buy a stamp: 'Control/V' puts the RFP in to your inbox.
The other way to fix your fraction is to make the denominator- the bottom number - smaller. Simply being more selective about where, when and on what basis you are going to compete can have an outsize impact on your win rate. Ask yourself these questions: how many deals did we pursue last year that we now wish we'd never gone after? What did those customers or deals have in common? Had we screened and qualified them better, how many could we have walked away from with zero financial impact on our bottom line? What rules can we write to fix our denominator, which is almost certainly much bigger than it needs to be?
Sellers and sales leaders may reject this thinking for one of two reasons. First there's the belief that it's really a volume game and the more you compete for, the more you win. In my experience, that's a load of crap. Chasing flawed business just taxes your organization while adding nothing to the top line. Then there's the irrational fear among sellers that they'll be somehow blackballed by buyers if they don't dutifully submit best efforts on every single RFP. Like most behaviors rooted in fear, this one simply doesn't stand up either.
Swinging at every pitch does not raise your batting average. Quite the contrary. Bring some sanity and judgement to your process and start qualifying prospects. The P&L you save may be your own.