Ask HN: How to close a sale? | Hacker News Reader

Ask HN: How to close a sale?

21 pointsmailarchis13 comments

This is a follow up question to http://news.ycombinator.com/item?id=1698842

We have built a web application for educational institutions and been working on our sales over last 3 months.

There is one school that has shown keen interest in our product. We have had one meeting that went well. They asked for a proposal which we sent to them along with a live demo. Five weeks later we had a phone discussion with their IT team.

Its been now 6 weeks since we had the first meeting. We had been following up with them over phone once every week. While we are confident that they are looking for a solution that we are providing, we are trying to figure out what we can do to close the sale and sign a MOU/Agreement with them.

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Update - Just to add some more context, we are mostly tech folks and newbies to sales

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How to close a sale?

Ask your customer, not us.

I'm not trying to be abrupt, but it sounds like you've already done all the right things and your relationship with your customer should have reached the point where you can ask them exactly this question.

Dealing with institutions can be it's own animal. The best way to learn how their buying process works is to ask them! In a perfect world, you may still be 6 months away from a sale. You wouldn't agonize over it if you knew, and you'd know if you asked.

In dealing with institutional customers, I even take it a step further. Before I invest any time in the sales cycle, I have them teach me what it takes to get a sale, exactly what I have to do, and how long it will take. Real buyers will be happy to tell you all of this; in fact, they may think you're sales amateurs if you don't bother to ask. Lots of times the buyer may be frustrated by their own organization and will coach you to be more successful so that they can get what they want.

There are millions of potential tips: "You have to talk to Joe Smith first." "Never call Fred on Monday." If you filled out Form XG7-B first, you'll save 6 weeks." "Mary only buys from people she meets through Bill or her Business Group." "You have to be a preferred vendor of XYZ.."

I hope you get the picture. Like I said, it sounds like you've done all the right things so far. No one here at hn knows what else you need to do. Your customer does. Ask them. Today.

"In dealing with institutional customers, I even take it a step further. Before I invest any time in the sales cycle, I have them teach me what it takes to get a sale, exactly what I have to do, and how long it will take. Real buyers will be happy to tell you all of this; in fact, they may think you're amateurs if you don't bother to ask. Lots of times the buyer may be frustrated be their own organization and will coach you to be more successful so that they can get what they want."

I think this is extremely important not only with institutional customers, but with the general public as well. Every different market segment is going to have it's own rules about how they buy, who they buy from, how trust is built, how long it will take, what hoops you have to jump through in order to get them to take out their wallets. Then once the wallets are out, there is a whole other aspect to getting them to commit.

Like you said, people won't take you seriously if you don't know how to play the rules of the game.

Great advice; rings true.

Hi -

When you qualify a prospect, you want to think about 4 letters BANT. Budget, Authority, Need, Timing.

1) Budget - does this prospect have enough money to afford my product/service 2) Authority - Am I speaking with the decision maker (the person who holds the purse strings - typically CEO for businesses with less than 50 employees). For an educational institution, you will want to ask, "how does your purchasing process work?" You need to be able to uncover who the final decision maker is. 3) Need - why do they NEED your product. Please note that "need" is far different from "want" your product. For example, is the educational institution behind on the technology curve? What does your product do to give the educational institution a competitive advantage in either making professors more efficient or attracting more talented students? 4) Timing - educational institutions are businesses. They have budgets. It is getting close to the end of 2010. Perhaps purchasing your product is within the budget.... for 2011. They may love your product but are waiting to pull the trigger on Jan 1, 2011. How do you figure this out? Well, you need to ask, What are the next steps on your end?

Every deal is different. One thing that is consistent is BANT qualifying prospects. If you can identify 1) a PROBLEM 2) a PAIN and 3) CONSEQUENCE - the probability of converting leads into customers goes WAY UP.

Hope this helps. :)

Ryan

Ask for the sale.

You may need to create some urgency. It sounds like you're supporting them gratis right now. Ask for the sale nicely, and then, depending on the response, frame the issue in terms of "that's OK, but we have other prospects we need to work with, so before we disengage, can we talk about why you couldn't benefit from our solution?"

Be prepared not to like the answer you get. You're selling to edu's. Edu's aren't fun to sell to; they are the worst of both worlds between enterprise and consumer sales. Part of the discipline of selling to them might be learning when to disqualify prospects. Don't waste your time talking to people who aren't going to buy. They aren't snakes and you can't charm them.

You're in business. You are not an educational IT support charity. Next prospect you open up, don't frame the relationship in terms of 6 weeks of weekly phone chats. Instead:

* Burn a meeting (with your dog&pony deck) to map out the organization and who's going to benefit from your stuff, and who's going to be saddled with using your stuff, and who's going to cut the check.

* Follow up with a meeting (with the right person) to map out the buying process. Be direct. You're there to sell stuff. Don't pretend you aren't, don't sugarcoat it. Ask them about the last thing they bought and what the process looked like. Then get them to confirm the same series of steps for your doohickey. Write notes down. Recite them back.

* Ask for the sale. This is the difference between salespeople and techs. Salespeople are always asking for the sale. The word "sales" is in their job title. They aren't hiding their motivation. A soft "no" is still progress if it gives you information you can use to transition to the next state in the machine; a hard "no" is even more useful if it gets you the hell out of a sand trap and out to another prospect.

I work at a very large K12 district so some feedback:

It's probably not you, it's me (them). Government/schools are notoriously slow and bureaucratic. Even the most simple of purchases takes FOREVER. In my district I can't buy ANYTHING from you unless you are on the "approved vendor list". This means your company would need to fill out some forms, wait, provide more information, wait, wait some more, until you are finally given a number in a database somewhere.

For enterprise, and especially government/schools, a 6+ month sales cycle is not uncommon.

As for what you can do for them:

- Do all the paperwork required, even when it seems mundane, redundant, etc. This isn't the IT dept's fault, but they have to play by the purchasing rules. Again, they probably can't spend a dime until you do the paperwork.

- Don't bug the shit out of the IT people. Stay in regular contact, ask about progress, but don't call daily and ask what's up. If you bug anyone, make sure it's the purchasing, finance, procurement, or other people you're dealing with.

- Make things easy. Whether it's your POs, subscription model, support costs. The accounts receivable people and procurement dept probably don't know anything about technology, and weird-sounding line items will confuse them and stall the process.

One last thing - legal departments are SLOW. If your contract needs to be reviewed by the legal department, and it probably does in most districts, you're going to be in for a long wait. There is nothing you can do about this step but wait.

Comments are my own and do not represent my employer.

The previous comments cover some of the most important points. It seems like you haven't identified who would make a decision to buy. So right now, you are entertaining a bunch of "keenly interested" tire kickers. They might push it up to the decision-making level, but you can't rely on that. Not for this first sale, and definitely not as a sustainable sales process.

You might also want to start reading some sales books; and remember the salesperson's mantra: always be closing. Every time you interact with the customer, try to close. Often this takes the form of the "trial close" (google that) which can be said half in jest, but is nonetheless a serious way of moving forward in the closing process.

Also consider the possibility that this customer actually has no interest in your product, and are just using you as a data point in their plan to either build it themselves or buy something else. As you continue selling, you'll find that this kind of tire-kicking is a frequent occurrence.

> sales books

Suggestions? There's a lot of stuff out there so I'm looking for HN recommendations.

"Customer Centric Selling" is an excellent book. You need to develop a repeatable sales process for your business - this book will teach you how.

Note: I have no affiliation with the above book/authors/publishers....I have been in software/technical sales for over 10 years, and I happen to think this is best place to get started.

Right now you are letting the buyer control the sales process. The other folks here are correct that you need to find out:

1) Do they have funds budgeted for this already? What budget will this come out of? When does their budget year end? 2) How does their buying process work? Who has final approval? Does this decision have to go to a committee if the cost is over $XX,XXX?

3) If your software solves a problem...how are they solving that problem now? What "pain" do they have associated with how they are doing things now? You need to find out what their "critical issue" is.

4) What is the business case for your product? People don't buy "cool features" or "neat software" they buy products that solve business issues. If you are selling something above a certain price point, the decision will eventually be made by someone non-technical....and you need to have a strong ROI case built for that person to get the order.

If you don't know the above information, never do a demo. If a prospect refuses to share this type of information, they are not serious and you should move on to the next one. Sometimes the best sales opportunities are the ones that you lose quickly....don't be afraid to lose the sale quickly. Focus your efforts on serious buyers who are willing to share information on their budget, purchasing process, etc.

3 key components of a sales pitch:

A. Get their attention B. Summarize the key advantages the customer will receive by purchasing your product/service C. Tell them specifically how to make the transaction

Sounds like you have taken care of A and B already. But are you not making it easy for the customer to say yes? Perhaps you need to be more specific on your price & terms. How do they get started? Who do they make the check to? What happens after that?

Finally, to amplify the chances of closing the sale - makes sure you include a risk reversal proposition. Ie- "if you're not completely satisfied within 60 days, we'll refund you with no questions asked." This is really important, since you guys are new to the game, and so you should be expected to accept 100% of the risk in the transaction. Get your prospective customer to understand this, and if they still aren't making a purchase with you it's time to move on to the next one.

It's interesting how in this thread there are several comments that are almost direct lifts from training sales books, and one comment that talks about experience with institutional markets.

It's the difference between reading and doing.

You'll (hopefully) know your prospect better than the people here. There's not much I can add to edw519's comment, other than to try to identify the things that are stopping the sale from going through, you may be surprised what the issue is. Update your view of when you think this is likely to close once you've identified what the hold up is, when to re-establish contact and divert your energy to other sales in the meantime.

Thank You every one for your pointers. I will keep you posted about developments on my side

ABC "Always Be Closing": MOU is a not a sale so go for the purchase order (PO). [Edit] Adding to the great pieces of advice given by edw519 that the answer are with your prospect and all got to do is ask question and listen.

* Present them a copy of the Purchase Order they should sign. Give them a pen and wait don't say anything. If that's too fast here are from start some steps I follow:

* Detect a prospect "with a pain" that your offer can solve. Be like a hunter: do not waste energy after rabits (no meat for too much hastle). http://www.bothsidesofthetable.com/2009/09/16/most-startups-... This can be any type of pain: they have a budget to spend before now and the end of the year. You can help the decision maker look good in front of his bosses. Students have threaten to strike if the pb is not solved by a solution like yours (often pains are human/status related).

* that means detect the non shopping signals (they don't really know their budget? no time frame; they just want info etc... they shop but will not buy). As soon as you feel they are not serious go to the next one.

* Reformulate the framework for PO: "so Mr Prospect if we do this, and that and this, in this time frame you will sign me a Purchase Order?"

* Answer objections one after the other. Be exhaustive so that there can be no objection left and he is forced to sign PO as he accepted he will do.

* Detect Redherring/false objections: the prospect does not want to tell you he will not buy (sometimes the prospect knows this from the start, he just want to justify that he has looked for several offers etc even if he already know the one he wants to buy).

* Often they don't want to tell you the whole thing (and the "real" thing). and you have to know EVERYTHING (because either your competitor will, or the prospect will play with you). So spend time at the water cooler with people around the project and ask "open questions" = they type they can not answer with yes or no but where they have to elaborate. They will tell you for instance that "you loose your time the guy knows that he leaves to another co end of the year, he is just justifying his salary in the meantime". You can also have call with excuses to get into side (but very informative conversations) eg. "Hey I wanted to check if you well receive my email? btw how does Xor Y work at your organization, just curious"... "I see", "really" "what do you mean by XMN process?"

* Make sure that when you give sthg they give you sthg back: a feedback email, a meeting with their boss/decision maker, contact to their contract adminstrator. (bad sign is when you give and give and do not receive nuggets of value back that shows you are in the process of closing.)

* do not put too many intermediary steps (sometimes people are scared to ask for the order while the prospect is already ready to buy that is why from day one you should have a PO in your bag in case the guy says ok. Rare but happens somtimes)

* the key to this is listen more than speak and sometimes play the game "the 1st who speaks has lost".

* Ask the hard questions and wait (=shut up) until the other one is a little bit uncomfortable with the silence and can not help but speak. eg. "Who is the person who will sign the PO", "how much budget do you have?", "why is it so important to you to buy a solution?", "Why would you buy from us and not our competitor?". Hard question are a little bit at the limit of rudeness but at least you are clear and you tried, and by experience many times people answer. You are a busy professional, and that is why you ask clear question to save everybody's time but(!) you respect their procedures and that is fine that if A then they will give you the answer to your question B.

* It is a partnership: "you have appreciated the effort we have put in answering all your questions, in return we ask for a date where, if all conditions (listed) are fulfilled, you think we could come to sign the contract/PO together. Do we agree?" - then send an email telling what prospect agree to do., and regularly check if we can expect that PO will be signed by then? any possibilities it can get postponed? what could be the risk? "ah I see, so should I talk to this person to make sure they will read the contract before (y date)?"

Always be Closing.

Once you have your PO (1 page), you need your legal contract, and then you have 3 other steps:

* reassure the client that he did well to buy form you (don't leave him alone while you celebrate). "Hey, fyi the other institution X bought from us" "see our article in this important publication". They chose the right horse.

* Deliver (and make as many people in their org happy as you can, they will be future sales people for you outside or inside the org).

* Finally go back to the client and say "ok you were happy with our service/produc" "yes", "did you appreciate the reactivity of our team", etc..." yes" "You understand that in order to serve you even better with more ressource I need to grow my business "yes" . "So now do you think we deserved the right to ask you the contact details of people in charge like you at 3 other similar institutions which will benefit from our solution like you did?" write 3 bullet points on your notebook, do not speak wait for the 3 names even 2 is great value.

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