Picking up on the theme of my last article, Five Things to Master in the New Year, there’s another area that most of us would do well to work on at a time when we’re making promises to ourselves: new business meetings. And I don’t mean we should strive to get more of them.
As I was transitioning from my agency career to my consulting practice ten years ago, I was doing contract business development work for a former employer. He wanted to pay me based on the meetings I obtained for him. Like most agency principals, he had confidence in his product and his presentation skills (both were indeed excellent) and he thought that given his strength in these meetings all he needed was more of them. So, he paid me based on the meetings I obtained for him, with an upside for business closed. I didn't think it was a good idea but I went along with it.
Any seasoned salesperson can guess what happened next: meetings went up (as did my pay) and the closing ratio went way down (to zero). After a few months we revisited the compensation plan.
There are a couple of lessons here.
Aligning Incentives with Goals
First, in any endeavor, we want the incentives to be aligned with the proper goals. If we reward someone for meetings obtained, the quantity of the meetings will almost certainly go up and the quality of those meetings is as certain to go down.
Because many of us see a face-to-face meeting as one of the more easily identified steps on the path to securing the business, we jump to it as soon as possible. Indeed, many firms build this into their opportunity scoring within their CRM systems. Have we met with the prospect? Check! (rating: Warm) Have we written a proposal? Check! (rating: Hot) Those who think they are being methodical about their approach in this manner are driving huge unnecessary costs into their sales cycles.
Henry Minztberg proved years ago that performance can be improved just by measuring it, so if we start counting meetings obtained and proposals written, they will increase. This would be wonderful if there was a meaningful correlation between these two activities and the outcome we’re looking for (new business won) but in our profession there isn’t.
When we build the steps of meetings and proposals into our sales process then our people will rush to them as quickly as they can. When we reward this behavior financially it will increase even more, as I proved ten years ago. I knew back then that the quality of the meetings I was getting was poor, and while I didn’t feel great about my behavior, I didn’t lose any sleep over it either. Like a policemen being rewarded for each arrest or a teacher for each A, I was doing what I was being asked and being paid to do, but like the desired outcomes of lower crime or smarter kids, the amount of new business won didn’t change.
Many Meetings Shouldn’t Happen at All
The second lesson from my experience ten years ago is that up to half of all new business meetings shouldn't take place at all. Many of them happen because the meeting is what we are pursuing when we get on the phone, but many times the prospect offers us a meeting before it is in our interest to agree to one, and of course we take it.
Early into that first phone call we start to see reasons why an engagement might not work. The proper thing to do is to lean into these potential objections rather than avoid them and simply hope that we might overcome them through the magic of our presentation.
The typical concerns are budget, the nature of the project and the arduous or even ridiculous selection process. Maybe it is the (in)sanity level of the client. Whatever the objection, we must train ourselves to go after it on the phone as soon as we get a sniff of it. If it’s going to kill the deal, let’s find out before we hop in the car, or book a plane ticket or bump our paying clients.
Who’s The Crazy One?
Back in my agency career I once had an inbound new business enquiry from a man who was clearly insane (okay, exhibiting obvious signs of manic psychosis.) He had a crazy made-up name, a ludicrous idea that was grand, senseless and impossible to pull off. And he had no money. He wanted to meet to pitch me his idea and help him get it off the ground. I politely referred him to a competitor.
It was funny, it was sad, but most poignantly, in spite of all the evidence that this thing was a disaster on all fronts, it was all I could do to say no to the meeting! A small part of me kept trying to convince the rest of me that maybe he wasn’t insane, that maybe I could help him raise the money, that maybe I was taking a pass on a great opportunity. Maybe I should just take the meeting and see, the tiny but compelling voice pleaded. Even funnier (or sadder) is that I wasn’t working for a small firm that couldn’t afford to say no to new business. I was working for one of the largest ad agencies in the world and I was being run off my feet by my client, one of the largest companies on the planet. Yet, I still almost took a meeting that we all know I shouldn’t have. Why?
Let’s Admit It: We’re Winging It
Somebody said to me the other day that you can’t really manage people, only processes. The secret to why we take meetings that we shouldn’t lies within this sage observation.
When it comes to business development, most of us are winging it. We have no processes – no established, written vetting criteria. When we get someone who wants to meet with us, emotions rule and we say yes, when we should, in a more robot-like fashion, simply begin to ask the questions that need to be asked.
The Usual Excuses
We have an obligation to all concerned to determine is the client can afford us before we agree to meet. We have the same obligation to ask about the specifics of his need, his decision-making process and his time frame. But we rarely get answers to the questions we don’t ask, and we don’t ask because we’re not following a prescribed process. This lets our emotions drive our decision making and our primary emotion is fear of killing the deal. So we come up with excuses for why we didn’t ask the proper questions. Excuses like the size of the client (They’re huge!), the economy (It’s bad!) or the financial state of the firm (We’re broke!), but they’re just that – excuses. Asking the proper questions on the phone will not kill a good deal, only a bad one – the ones we have an obligation to kill before we allocate resources against unnecessary meetings and proposals.
What If You Couldn’t Meet?
Business gets closed all the time without buyer and seller meeting – business in your space. I’ve hired designers and PR people without ever having met them and I’m almost always hired without a face-to-face meeting first. (Some of my clients I’ve never met.) An agency principal once told me that he had a client pay his firm over a million dollars in fees before they met anyone at the client company.
Consider handling the next inbound business development enquiry as though you were quarantined with a highly contagious disease (Hypermeetingasia?) and there was no way you could meet with the prospect. Make a list of the questions you would ask of the next person who expressed an interest in your firm if you couldn’t meet with him. Then when you’ve got him on the phone, ask the questions. After that, if it makes sense to meet then do it. If it doesn’t make sense then congratulations – you’ve just saved yourself valuable time and driven down your average cost of sale.
To recap, I’m not saying you shouldn’t meet with the client before he hires you – indeed it is a usual, although by no means mandatory, step in the process. Go ahead and meet, but only once you’ve had a meaningful conversation about the purpose of the meeting, the client’s need, decision-making process, time frame and budget. To agree to a meeting with a new prospect without first having an in-depth conversation about need and budget, at the very least, is a no-no for which there are few valid excuses. Ask your questions on the phone and you'll be left with a smaller number of far better meetings, higher closing ratios and a dramatic reduction in your cost of sale.
Four Keys to Qualifying, from way back in September, 2002, is an article on the questions you want answered with any new prospect.
The Qualification is an in-depth webcast (membership required) from September, 2008 on the same subject.