Carrots or Sticks… Which One Is Your Sales Team Using?
There are any number of reasons to be glad that 2020 is finally over. I won’t list them individually (you’re welcome), but I think I speak for a large part of America, if not humanity, when I say that I am happy to have turned the calendar page.
One thing that I am particularly thankful for in this regard is the end (at least for now) of holiday shopping. Every year, it’s more or less the same thing: find the perfect gift and have it in hand for Christmas morning. This year, since so much shopping has necessarily moved online, there was an additional wrinkle: order early enough to ensure that everything arrived on time.
Christmas deadlines are “real” deadlines. Every gift I ordered — a fly rod for my son Luke; a gift box of Rancho Gordo hierloom beans for my vegetarian daughter, Katie; a ski coat and pants for my wife, Brigid — had a prominently displayed “order by” date next to it. Miss the date and you’re out of luck.
Compare that to the ubiquitous and never ending Toyotathon deadlines. These promotional zombies are always “ending in a few days,” only to come back to life a month or two later. While they may fit the strict definition of “deadline,” they bring little motivational juice, since we know there is always another one around the corner.
In the world of tech sales, deadlines play a role, too. Every sales team strives to meet its monthly, quarterly and year-end goals. Accordingly, towards the end of each of these periods, additional discounts appear on the table, always with the stipulation that the transaction must be completed by a certain date.
Do deadlines like these work? Somewhat.
I’ve represented dozens of clients over the years, on both the selling (licensor) side and buying/procurement (licensee) side, and I’ve gotten a pretty good feel for which mechanisms are most effective at motivating buyers to close transactions in a timely way. The problem is that while these time-based offers rarely rise to the “Toyotathon” level, buyers are well aware that there’s always another deadline and, therefore, always another deal to be had down the road.
Time Isn’t the Only — or Necessarily Best — Motivator
Rather than adjust pricing based on an arbitrary date, my clients have had more success closing deals by determining their customers’ true needs and figuring out how its products and services can have an immediate and lasting impact upon their business.
Said another way, rather than relying on “sticks” (you’ll miss out if you don’t sign soon), they attempt to highlight “carrots” (there are benefits to crossing the goal line in a timely way). Granted, it usually requires a deeper understanding of a given customer’s business and needs, but if your sales team intends to develop long lasting relationships that lead to repeat sales, it’s time and effort well spent.
Some “carrot” examples include…
- The company CEO (or other senior executive) has been promised project completion by a certain date. The sooner the deal is closed and your service is up and running, the more likely that is to occur.
- Budget money for the project has already been allocated. If it’s not spent by a certain date (e.g., end of the customer’s fiscal quarter or year), it’s gone forever.
- Significant ROI savings are available. Every day that passes without having your service up and running costs the customer money.
- A competitive advantage will be gained. Your product or service will help the customer stand out in a crowded market or enable it to keep from falling behind.
- Sales opportunities loom. Your product will allow the customer to increase sales efficiency by bringing more and better prospects into its sales pipeline.
- New or ever-increasing regulatory requirements have come into play. Your service will help the customer comply, reducing the likelihood of fines, penalties, or lawsuits.
Like I said, carrots, not sticks.
A couple of things worth noting…
First, none of these “carrots” are flashy or particularly innovative.They simply speak to customer business realities which, the sooner they are solved and/or put in place, will benefit your customer.
Second, while these contain time-related elements, they are not based on an offer that will disappear soon (only to reemerge down the road). Rather than the customer feeling pressured to make a decision based on your deadline-based internal goals, the customer is motivated to act for its own benefit.
Now, instead of being a high pressure salesperson, you are a trusted business partner.