I am always amazed at salespeople who allow their frustration over losing an order impact their good business judgment. After spending months developing a relationship with a prospect, they just walk away and let the connection languish after they find out their prospect has selected another vendor.
This emotional and immature response compounds the loss by:
Failing to Gain Honest Feedback
When a prospect selects another vendor, they generally have specific reasons for their decision. If you have developed a solid relationship with the decision maker, you need to take full advantage of this relationship and ask for honest feedback as to why they went in a different direction. Gaining an understanding of why the bid was lost provides essential knowledge to avoid similar mistakes in the future. If an important customer need was overlooked, or you didn’t understand the selection process and ignored a key influencer, this information can be used to improve future performance. In addition, you may gain vital data about your competitor, such as a new feature they have developed or a change in their pricing structure. This would be important information to share with your marketing and management teams.
Not Being in Position to Exploit a Problem if the Incumbent Fails to Deliver
Some companies win business by overstating their capabilities. If you’ve lost business to such a company, the most important thing you can do is keep in touch with your prospect. When the selected vendor fails to perform at an acceptable level, your prospect will likely be looking for an alternative. At one of the businesses where I am the Outsourced VP of Sales, we gained one of our largest orders of the year from such a scenario. After losing a bid, the prospect invited us to keep in touch. Later, in response to one of our follow-up emails asking about how the project was developing, our prospect requested a meeting with us on an urgent basis. It turned out that the vendor they initially selected was unable to deliver on some of their promises and the prospect was about to miss several important deadlines. My client was able to secure an order of about the size of the initial lost opportunity. Our performance during this phase immediately led to a second contract that was five times as large and represented one of the biggest contracts of the year for my client. The account continues to develop, and we recently submitted additional proposals. If we had walked away in frustration and not stayed in touch, they probably would have found another vendor. Follow-up was the key to our being in position when the opportunity presented itself.
Missing Out on an Opportunity to Display Professionalism and Gain Referrals
How you handle losing an order affects the prospect’s perception of you, your company, and their willingness to do business with you in the future. This fact was highlighted recently when I was sitting in on a series of account reviews with the sales team for another client. A business development manager (BDM) was going over the ways she increased both her sales results and her funnel. She attributed a significant portion of the year-over-year improvement to the fact that she kept in regular contact with all of her prospects – including the accounts that she lost. Due to her persistence, she ended up getting a referral from one of the contacts at such an account. Her contact was aware of a bid that was being released at a sister company, and she alerted the BDM. The BDM submitted the winning proposal for that business. She also earned business with an account that was lost several years earlier. By keeping in contact during the term of the contract and following the prospect’s strategic initiatives, the BDM was well-positioned when it came time for the prospect to rebid the business. The BDM used the knowledge she gained during the two years since losing the initial order to formulate a better solution for the prospect and earned the business the second time around.
Whether you win or lose the business, by taking a long-term view of every prospect, you can overcome short-term losses – but only if you take the time and put in the effort to fully develop every relationship.