This is summed up in one word: “Scarcity”.
Scarcity is defined as: The state of being scarce or in short supply; shortage. A lacking, undersupply, insufficiency, scarceness.
If there is one thing that can demoralize a sales force faster than anything else, it is a scarcity of leads. Scarcity puts intense pressure on the entire sales process because it makes every lead precious. The sales person who feels he can’t afford not to close every prospect (there being too few to start with) will start to short-circuit the sales process. You see this with sales people who are constantly trying to get to the “Close” from the moment they meet the prospect. The prospect is resisting and the stressed-out sales person is trying to get to a quick close, which only causes the prospect to resist even more.
Let’s take a look at how scarcity affects each step of the sales process:
Initial Prospect Contact: Scarcity causes the sales person to try to make a “Close” starting with the initial contact. At this point, the prospect does not yet trust the sales person. The pressure the sales person feels is then transferred to the prospect, causing further resistance to the sale. Having an abundance of leads to contact takes the pressure off.
Qualifying the Prospect: Once the prospect trusts the sales person, the qualifying step will be effective. Having an abundance of prospects to qualify allows the sales person to truly complete this step. Pressure to get the sales closed causes the qualifying process to be weak. This results in sales getting stuck and not moving forward, prospects not returning calls or staying engaged, and salespeople hanging onto unqualified prospects. Unqualified prospects clog up the sales process. You can see this by salespeople wasting tons of time on “prospects” who never seem to close, instead of devoting that time to genuinely qualified prospects. Again, this is solved by a consistent, abundant flow of leads and a clear definition of a “qualified prospect” for your company.
Education step: This step is done AFTER qualifying the prospect. If the qualifying step was weak or incomplete, the Education step ends up being a “canned presentation” that does not focus on the individual prospect needs. This should not be underestimated. The idea that “I already know” what the prospect needs is a common mistake. Each prospect is important and has individual needs. Those needs can only be understood by a thorough qualifying process. When this is weak, the prospect loses interest in the education step as they do not see how it applies to them.
Solution: Abundance of prospects that are properly qualified and then educated based on what was found during the qualifying step.
The problem of scarcity can show up in other ways, too:
1. Sales that are supposed to close don’t close on time.
2. Having to give deep discounts that you wouldn’t normally give, just to get a sale
3. Salespeople make mistakes in estimating, leading to unprofitable contracts.
4. Sales people holding on to the few potential deals you have instead of closing them
5. Sales people skipping or rushing through the steps of the sales process, trying (and failing) to close as quickly as possible.
The best solution is to take the unnecessary pressure off the sales force by creating an abundance of leads. That one action can, all by itself, increase closing rates!