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March 22, 2017

Why Most Sales Reps Keep Giving It Away

WhyRepsKeepGivingItAway_Compressed Just listen and you’ll hear it.  Towards the latter end of most calls the sales reps starts saying things like, “OK, I’ll send you this”.  Or, “sure, I’m happy to set up that demo”.  Or, maybe, “no problem setting up the next meeting and I’ll be sure to bring along our technical expert to talk with you”.  It happens a lot.

You might be thinking big deal; or so, what – isn’t that how sales people are supposed to advance the sale?  But what you may not realize is the cost of their commitments.

In many ways, sales people are unique in that organizations bestow upon them great discretion over company resources.  They have tremendous latitude in determining how to allocate your company’s scarce (e.g. expensive) resources.

In my experiences most sales individuals simply agree to whatever the prospect asks for; effectively giving away company resources; spending company money.  They do so for a variety of reasons including…

  • Responsiveness: Most sales reps want to be perceived as responsive; meeting prospects/customer needs.  To do so, they agree to do things/give things away.
  • Feeling inferior: Many reps feel the prospect/customer has all the power in the buyer/seller relationship.  If they don’t “jump through the hoops”, someone else will and then they’ll have lost that opportunity.

For many companies (especially technology companies) there comes a stage in the sales cycle where a demonstration of the system/software is totally appropriate.  But, do you know what it costs to conduct a really good demo; a demo that’ll win you the business?  And I’m not talking just the direct costs such as travel expenses. I’m talking the fully-burdened cost when you factor in labor rates, overhead, travel, prep time, etc.?   For many of my clients who employ top flight talent (and compensate them accordingly) these demos can run $10,000+.

Giving away company resources was something that I did too when I worked at large organizations.  That’s what most of my fellow reps did.  After an initial conversation with a prospect (sometimes even during the initial meeting) I’d agree to set up a demonstration or bring in our technical experts as a way to advance the sales cycle.  I too was “giving it away”.

"A person that does not value your time will not value your advice."
― Orrin Woodward

But the key point is that I never asked for anything in return.  I never really thought about the cost or value of those resources – well, because, I never bore the cost of providing them.  They were “company” resources that were there for the taking.

When I began running my own business, the cost of giving away resources really hit me.  Now, it’s not “the company” who bears that cost, it’s me.  Those costs, both direct and indirect, come from my wallet.  This was a major wake-up call as before I never really thought about it.

So now, when a prospect asks me to travel to their location and give a presentation, I temper the inherent joy that I feel (oh boy, the sale is advancing!) with a dose of cost accounting; the fully burdened cost of the trip including both hard costs (flight, car rental, hotel, etc.) combined with the soft costs (my time, lost opportunity cost, etc.).  When it’s your money (or think of it as your money), you look at it differently.

Then, I think and ask myself, “if I’m going to make this commitment, what do I want in return”?   Maybe it’s a discovery call with the other stakeholders.  Maybe more insight on my competition.  Maybe confirmation that all the key individuals will be at the presentation.  Whatever it is, the key point is that I ask for something in return whenever I’m asked to give something.

Asking for something in return changes the rules of engagement in a very subtle yet important way.  No longer am I the lowly sales rep willing to give away resources; one who’ll jump at every request being made of me.  Rather, I’m an empowered individual who values his resources and won’t just give it away.  Prospects sense this business-like approach and, in my experiences, give greater respect to you and your company.

Now, I’m not saying you should negotiate everything.  If they ask for something that is easy to provide, like a white paper or spec sheet, give it.  However, if they ask for something that is valuable to you or your company (detailed demonstrations, reference visit, etc.), be sure to ask for something of commensurate value in return.   Doing so will place you in that upper echelon of sales professionals;  one who thinks, and acts, like a business owner.

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