What's the Cost of Doing Nothing?
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You’re nearing the end of the quarter, and there are too many deals still open. You sit down with one of your sales reps to see what levers you can pull to get their key deal over the finish line by the end of the month. The sales rep will likely assure you that their contact is the right person. Their contact has budget, and they have authority to sign. They even verbally committed to getting it done by the end of the quarter, so we shouldn’t worry.
So, the rep seems to have the B, A and T of BANT in place, but what about need? If the deal is this far along, the rep must have that defined, right?
At this point, you might feel inclined to let your rep off the hook since they seem so confident. You want to believe, but you’re a seasoned sales pro and have one more question.
What if they don’t make a decision? What’s their cost of doing nothing?-Grizzled Sales Leader
Time stands still as the rep stammers out some word salad.
There is a sinking feeling in your stomach.
If a Sales Rep Can’t Articulate Value, the Prospect Can’t
You know how the story ends. The sales rep doesn’t have a grasp of what will happen when (not if) the customer doesn’t sign. Odds are, the worst thing that can happen is what will occur – nothing.
You won’t win the deal. You won’t lose the deal. It will be a zombie that hangs around for a few quarters until you finally close it out with the dreaded “No Decision” status because the prospect wound up going dark.
All of this could have been avoided if the sales rep had done the hard work of really figuring out why the prospect needs what you’re selling. The prospect might want it, but if they don’t feel like they need it, then the deal – and the customer actually adopting what you’re selling – is at risk.
Prospects Value Avoiding Pain
People buy things to avoid pain. Period. Full stop.
You think it’s more complex than that, but it isn’t.
Pain can be defined in any number of ways, but you can normally narrow the definition down to four things:
- Losing money
- Losing time and efficiency because something isn’t working well for them
- Not making money
- Not making enough money
Let me give you a couple of examples (one is mundane, and the other isn’t).
Why I Bought an Apple Airtag
My family and I were going on a long vacation, and we needed to drop our geriatric cat off at the veterinarian for boarding on our way out of town. We couldn’t find the cat. After searching for three hours, he walked out of our bedroom closet well-rested from a long nap.
This three hour delay caused us two days of pain since we planned to drive from Cincinnati to eastern Pennsylvania that day. We only made it to Pittsburgh.
When we returned from our trip, I bought an Airtag and put it on his collar so we would always know where he was. Prior to this, I wanted an Airtag because I thought they were cool, but I didn’t need one. Feeling the pain of a truncated vacation made me buy the Airtag.
This is an example of pain #2 defined above – losing time and efficiency because something wasn’t working well for me.
Why Integrity Express Logistics Bought HubTran
Integrity Express Logistics (IEL) was growing at a rapid pace. They had a large shipper as a prospect, and the shipper was concerned about their ability to scale their operations enough to manage the amount of business that would be sent their way. IEL had built a great company and made tremendous strides to increase their operational efficiency, but they hadn’t done enough to ensure their back-office could scale through automation.
Now they needed to increase their capacity, or they would face the pain of not winning the shipper’s business. In order to help avoid this pain, they chose HubTran’s automation tools to make their back-office more efficient. You can read the case study we wrote together here .
This is an example of pain #3 definted above – not making money.
Switch to Value-Based Selling
Knowing that people value avoiding pain, it’s up to the sales representative to develop a proposition for the customer that shows how they will help them negate that pain.
Back in 2021, I was interviewed on Freightwaves’s excellent podcast “Put That Coffee Down” " and discussed how to sell value in B2B SaaS sales. If I was a smarter man, I wouldn’t have gone into the interview with the “hand-wavey” notion of selling value. I would have been much more direct by saying that sales reps need to sell pain avoidance since that’s what prospects value.
I had built a simple spreadsheet called “The Value Builder.” My reps worked through it with the prospects – allowing prospects to articulate and rationalize their back-office costs. They filled in things like the number of loads prospects managed each year, the average dollar amount per-load, the number of people who worked in their back office, and how much each of those people were compensated. We were, then, able to calculate how many invoices each of their employees could process daily, and how much each invoice cost to process. Once that was done, we projected the efficiency gains they would see through automating their back-office work. If the numbers worked out (which they almost always did), the cost of adding HubTran was much less than what their inefficienct processes were costing them. The prospect was able to clearly see that every month they didn’t have HubTran in place cost them real money.
Because my team had worked through this process with the prospect, it was nearly impossible for them to say we were too expensive – or that we wouldn’t solve their pain. The only problem was that we needed to “back it up” when they went live with the product. We addressed that by creating a “Customer Success Contract” which spelled out what we would do for them, and when they would wind down some of their wasteful back-office spending. If the customer didn’t hold up their end of the contract by changing their processes, they couldn’t say that we didn’t deliver the value we promised.
I encourage all organizations to think through how your products help customers avoid pain by creating your own version of the Value Builder spreadsheet. Don’t overthink it, but ensure that it’s clear enough that the prospect is able to put their numbers into it. The Value Builder needs to speak their language. For example, at HubTran, we clearly articulated the cost their back-office functions had per-load. If you’re selling to real estate companies, you might want to have something like cost per-unit. If you sell to airports, it could be something like cost per-landing.
You get the idea.
Let’s revisit the fictional deal discussed in the introduction where we asked the question “what’s the cost of doing nothing?” and the sales representative didn’t have an answer. Had they been focused on selling value (ie. pain avoidance), they would have clearly been able to say that the customer would feel ABC pain, and it would cost them XYZ. Armed with that, you could develop a strategy to get the customer to sign by the end of the quarter. How? The prospect already told you, in very clear terms, that their pain was costing them money or not allowing them to make money.
Use that to push things forward. Shedule time and state “We all agreed on the metrics when we did the Value Builder exercise. Each month you delay means the pain gets worse. Do you think your boss/board/leadership/owners will be happy if you make the choice to continue losing money/not making money? If you sign now, you’ll be a hero. If you don’t sign, then you’re being negligent because you now know the cost of doing nothing. I really want to help you be a hero.”
If the prospect winds up not signing a contract, you dodged a bullet because they probably wouldn’t be a good customer anyway. Approach the account later – the pain will be worse, and you can sell to whoever replaces them after they’re fired for doing a terrible job at running their business.
If you choose not to decide, you still have made a choice-Neal Peart