Sales Courage and the Tin Man

ESCOs (energy services companies) find themselves answering RFP and Qs where they tend to bring 10% to a successful deal. At least this is what a gentlemen from a small Northeast Region ESCO shared with me over lunch about 6 months ago.  As a sales consultant, I began to get the “willies”.  The salesman in me couldn’t imagine 90% of my work being wasted.  We entered into a short term agreement and I analyzed their RFP procedures.

In 30% of the cases, the firm was asked to respond to an RFP where they knew little about the firm requesting, but felt compelled to answer, because “well, we’d have no chance at the business if we didn’t”.  The firm hasn’t shown any “wins” in this category.

In a full 50% of the cases, the firm knew “something” the company and had “some” detail on the players involved in the RFP and “some” detailed information on what was really required to reduce energy consumption within the facility.  In other words, they had a sales call record.

In the remaining 20%, the ESCO was intimately involved with the company and had been working with them diligently.  In half of those cases, they had met with the CEO and CFO of the requesting company to discuss financing options and timing.  In effect, the “deal” should have been already closed.  Why was an RFP even released?

Of course, there are obvious data points here and the analysis took little time and is intuitive to say the least.  The most obvious is that the 10% close ration becomes 50% when you look at the RFP and Q’s they answered when they were intimately involved with their prospect.  The more interesting questions demand answers and a sales manager that can “engineer” higher sales numbers.  Here are a few questions that we will get the answers to and solutions over the next few months:

How do we increase the close ratio from 50% to closer to 100% with the RFPs where the firm is already working?  What can be done right before they answer the request and during the evaluation?  Is the firm answering and just waiting?

With the 90% of RFP’s they answer with no success:  Can that effort be spent doing something more productive?  Does the firm have the courage to alter their procedure?

In general, what does the sales model look like?  Is it a tiered approach?  Is there someone in the firm that can speak with CFO’s of prospects and determine true viability of continuing the sales process?  A bit of tiered sales perhaps?  Spread the responsibility. A glaring initial analysis of their “sales forecasting” is the lead biz dev or salesperson on the account having little knowledge of how a prospect will pay, yet consistently has an optimistic view on the percentage that the prospect will turn into a customer.  

Remember, the prospect’s job is to get the firm to do free services to increase their own knowledge base.  How much “free” consulting is the frm doing?  Why?  Do they have the courage to stop “free” consulting?  If not stop, do have the courage to make oral contracts to increase the close ration on accounts where they feel the need to“free” consult?  Trust me, if the prospect won’t provide at least an open oral “map” to the sale, the firm is far from a sale.  Free consulting is not free for the firm doing it; in fact it is ridiculously expensive and actually increases the margins they need to earn when they do get a project.

I mentioned the word “courage” in this piece twice, prior.  Increasing sales takes courage.  Too many firms and sales types are reluctant to ask themselves the hard questions towards increasing sales. They “present” and hope and keep presenting and keep hoping. Most of their sales activity is like the Wizard of Oz’s Tin Man.  Remember the scenes where the Tin Man would boldly jump in front of Dorothy to protect her, only to shrink away in fear when confronted.  Is your firm allowing the prospect to run the sales process?  Contrary to popular practice,  your firm should be running the sales process, not your prospect.  

This takes courage.

Bob Fiori is a sales consultant who rolls up his sleeves and guides organizations to increased sales and efficiency.  He has increased sales for direct sales forces as well as led companies to increase their sales with value added resellers.  His experience ranges from advertising sales, web sales, data, electronics and has even shown political

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