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December 29, 2005

Competing against Mr. Do Nothing

by Sridhar Ramanathan

So often my clients find their #1 competitor is actually the customer doing nothing. That’s right. It’s not the direct competitor or a substitute option or even a homegrown solution that cinches the deal but rather inertia or doing nothing that wins. This can be especially frustrating and expensive when a sales team has invested a lot of resources to pursue a deal in good faith. And there are real opportunity costs for resources such as demo equipment, sale rep and SE time, travel, and executive relationship credibility. So the question is: how can you compete more effectively against Mr. Do Nothing? Here are some tips that have proven effective.

Clayton Christensen talks about the “overserved market” in his bestseller the The Innovators Dilemma. Basically the logic is that for some customers an 80% solution meets 100% of the need. The 80% solution may be doing things the way they are done today even if it’s manual, error prone, inconvenient, painful, inefficient, costly, etc. This is home territory for Mr. Do Nothing since the pain isn’t perceived as great enough to justify change and to buy a new solution. Competing against Mr. Do Nothing starts with a different sales approach from the outset.

Qualification: Ask qualifying questions of prospective customers with as many stakeholders as possible. And be sure to get the opinions of likely dissenters early on such as the CFO.

  • Why not keep doing what you’re doing?

  • Why is this a must-have priority versus nice-to-have?

  • What was the impetus to launch this project?

  • Why not wait another month, quarter, year?

The answers to these questions will uncover some of the reasons that the prospect may later choose to do nothing. Knowing this ahead of time can tell you whether it’s worth your time addressing these objections or better just to qualify out early on.

Advocacy: Every change represents both a threat and an opportunity. Identify the potential winners and losers when a new solution is adopted. The biggest resisters of change are those who feel they will lose out somehow. Find out who they are and create a win for them if at all possible. Then there are executives who might reject the purchase late in the cycle. Map out the organization from the perspective of doing nothing and see how you can make sure each player can be a winner and an advocate for change:

  • Decision maker
  • Economic Buyer (e.g. CFO)
  • User
  • Managers (e.g. IT organization that will manage/support the solution)
  • Evaluator/Influencer
  • Legal
  • Purchasing
Business Case: Confirm that there is a budget for this solution purchase. How was it justified and what assumptions went into it? Build a business case relative to doing nothing. Help the prospect see all the hard costs, missed opportunities, and business consequences of business as usual. Quantify, quantify, quantify. Your solution ROI must be relative to doing nothing not relative to your competitors. Here are some ROI elements that you might explicitly define relative to doing nothing:
  • Revenue expansion (e.g. incremental sales)
  • Faster time to market
  • Reduced capital and operating expenses (e.g. facility, equipment, personnel, etc.)
  • Risk reduction (e.g. security threats, financial risk, compliance)
  • Improved customer satisfaction (e.g. increased customer retention and upsells)
  • Productivity gains

In conclusion, the key to beating Mr. Do Nothing is to do something very proactive which is to treat this option as the #1 competitor. And that means starting the sales process with smart qualification questions and criteria, building a ground swell of support as well as air cover from executive sponsors for the new solution, and to help craft a solid business case that makes doing nothing seem irresponsible...and the new solution seem irresistable.

Sridhar Ramanathan is founder of the Pacifica Group, a management consultancy specializing in strategies and tactics to drive revenue growth. We can be reached at (925) 371-8400 or sridhar@pacifica-group.com. Copyright © 2005


Posted December 29, 2005 |
Posted to Sales Effectiveness

Comments

Sridhar,

Great information. You are right, effectively dealing with Mr. Do Nothing starts with asking smart qualification questions.

Many years ago, I sold Help Desk software and I often competed against "home grown" systems. I quickly realized that by asking the right questions, I was able to assess a company's need for a solution. This helped me determine my approach.

You made another great point; many decision-makers don't realize that there are costs associated with doing nothing. And, there are psychological costs, too. Losing face, stress, low morale, are also costs associated with doing nothing.

Again, great info.

Posted by: Wayne E. Pollard | January 2, 2006 4:35 PM

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