The role of business development (BD) and sales professionals is the same across all industries—to win business. The key difference between high performing BD professionals and organizations relative to their peers lies not in their ability to close deals, rather their ability to effectively qualify their pipeline opportunities. Most importantly, high performers know when to kill a low-probability opportunity and they get it out of their pipeline as quickly as possible.
Many larger organizations have designed detailed deal-qualification process flows to achieve more predictable opportunity conversion, win rates, and capture ratios from their BD activities. But, if you work in a small to mid-size organization, your pipeline management and deal qualification is likely ad hoc or, at best, loosely followed. If you are in the latter camp, consider using a very simple framework to achieve the same fundamental benefits of well-defined process. The framework is based on 3 questions:
- What’s the Problem?
- What’s the Solution?
- What’s the Cost?
What’s the Problem?
Rule of thumb: The more complex, difficult to implement, and expensive your solution is, the more acute the customer’s problem must be.
Qualifying the magnitude of the customer’s problem is the critical first step. Understanding an existing problem does not equal qualifying. Explore the customer’s problem in two ways. First, understand how solving the problem ranks compared to other priorities. Pose questions like, “what other planned or ongoing initiatives might take precedence over solving this problem?” If the identified problem is even 3rd or 4th on the list, it’s highly unlikely the customer will buy. Second, understand if solving the problem is critical to the customer’s mission. A great approach is asking them to assign a number. “On a scale of 1-10, how important is it to you (and your organization) that this problem be solved?” If the reply is anything less than an 8 (maybe a 7), strongly consider bowing out.
What’s the Solution?
Rule of Thumb: The customer should never be surprised by the solution described in your proposal. The proposal should contain what they expected.
Buyers want alternatives and will seek them. Individuals, companies, and government agencies choose solutions they believe will best address their problems, needs, and desires. The role of the BD professional is to craft the best solution with the customer’s input. The goal is to define the best-fit solution based on what the customer wants and on your company’s ability to successfully deliver. Qualifying the solution goes deeper. You need to anticipate what solutions your competitors will offer and discuss those alternatives with the customer. Again, buyers want alternatives and the BD person must assume the customer is considering other options. Ask questions like, “our competitors will likely suggest (their solution) in a case like this. Based on what we have discussed (our solution), which do you think is the best approach to solving your problem?” Or, “what other alternatives are you considering and what about those alternatives appeals to you?” If you get the sense your solution isn’t going to stack up, stop wasting the customer’s time, and yours.
Another great qualifying approach is asking the customer for feedback on a draft solution. Send a white paper or a draft statement of work and ask them to mark it up. The goal here is to hone your final solution and avoid missing the mark in your proposal. If the customer is willing to participate, that’s a good sign they are taking your solution seriously.
What’s the cost?
Rule of Thumb: Align what you believe it will cost to solve the problem and what the customer believes it will cost very early in the sales process.
A common misconception of BD people is that price should be the last thing discussed. I hear statements like, “I need to build the value as much as possible before talking price.” Not a good idea. True, the problem and notional solution come first, but once you and the customer are generally in sync, price needs to be put on the table. You are not suggesting a final price at this stage, rather a ballpark estimate. If, for example, you believe it will cost around $100,000 to solve the problem and the customer thinks it should cost $25,000, you have a serious problem. Time to get this deal out of your pipeline.
Qualifying is an iterative process and should be done throughout the BD lifecycle. Successful sales and BD professionals, qualify more, eliminate low probability deals earlier, and propose less. Great news for customers, your proposal development department, and everyone else in your organization.