About a month ago I started working with a really hot prospect. They were knowledgeable about my products and the industry. They knew exactly what they were looking for, had money and seemed in a real hurry to make a decision. I quickly put them on my sales forecast.
I should have known it was too good to be true. They seemed so taken with my product and company, I almost felt flattered. The prospect asked me a bunch of really good questions about how my product compared to others in the industry, they appreciated our value and were impressed with our customer service and even more importantly, they really seemed to like me.
That’s why I really felt betrayed the other day when they told me what I would have asked about a month ago. I wish I could have seen my face when they told me they had another vendor they really liked. In fact, they had done some business together before and the project went really well. In fact they felt obligated to give this other vendor a “last look” before they made any final buying decision. They really liked the company, our product and my price quote, but they felt obligated to give the competition one last chance to win the business. I went from feeling great to sick about this opportunity.
The point of this article is to share two things with you. One, how I should have avoided this situation altogether and two, to tell you what I can do now to improve my pitiful selling position. From time to time we all make mistakes in managing a prospect through the sales process and knowing how to recover from a mistake is almost as important to know as avoiding the problem in the first place.
The Last Look Provision
So first off, why am I so far in the sales ditch? Well, let’s review what a last look provision is. A last look provision is a tool your competitor uses to make sure that you will only win from them the most unprofitable sales opportunities. Here’s how it works.
The salesperson has a customer they have a good relationship with and the customer is back in the market. But something is wrong. Maybe the last price they were given seemed a little high, or a product performance problem issue might have occurred. The customer has some small amount of dissatisfaction with their current vendor.
We know the customer is unhappy because the salesperson can’t convince them not to look at the competition. Happy customers don’t shop. Really unhappy customers leave. And kind of dissatisfied customers tell you they are going to shop, hoping the vendor will do something extra to keep their business. So, out of desperation, the salesperson asks for a favor.
The conversation goes a little like this, “Hey Mr. Customer, I can understand that you were disappointed in the way we responded to your last service call. I feel like we resolved your issues, but you shouldn’t of had to deal with it to begin with. I apologize.” After much conversation the prospects say, “Well based on that experience I feel I must look around, but I do appreciate what you’ve done for us and this sale is yours to lose.”
Then the same salesperson says, “I understand, but could you do me one small favor.” After the prospect says yes, the salesperson continues, “Shop all you want, but after you shop everywhere you want and before you sign with anyone else, please give me an opportunity to earn your business.”
When the prospect answers yes, the last look provision is in place. When you are competing in a sales where the other vendor has a last look provision you have a high probability of spending a lot of selling time with the prospect and a low probability of making a profitable sale.
So what should you do? First, you should get a little suspicious when things seem to go a little too smoothly. This is a time when great salespeople start to ask a few questions about the competition. During the early discovery stages of the sales campaign the salesperson should ask if the prospect is shopping elsewhere.
When the response is yes, probe more! Find out if there are any existing relationships. What was good about doing business with them? What are the areas of disappointment? Why are you shopping this opportunity? If you were really happy with your current vendor, why are you looking?
This is how you will discover if the last look provision exists. Now you are faced with a dilemma. Do you have a compelling reason why they should do business with you rather than the incumbent vendor-even if you cost more?
If your answer is no, as it sometimes will be, you need to get ready to get down and dirty on price. You should also accept that you will only win about 10% of the time. If business is good, I would suggest walking away from the sales opportunity. If business is bad; you need to assume your price will have to be really low to bring the business home.
Now, if it’s late in the game and you’ve just discovered the last look provision. What do you do now? Ask a lot of questions. You only hope for making a profitable sale is raising fear, uncertainty, and doubt. You need to keep in mind if the prospect was really happy with the incumbent vendor they wouldn’t be shopping.
Your mission is to get the prospect to confess their fears to you. This is difficult to accomplish, but an easy process. When the prospect begins to tell you about their issues with the current vendor – get curious. What problems occurred? Why did they occur? What was the impact of the challenges? How will they avoid them in the future? Do you believe they’ll be different this time? Why?
Then it will come time to ask for the business. You’ll review the price, terms and delivery schedule. You’ll confirm everything is just the way they want it. Then, when they say they have to give the incumbent vendor the last look, ask them why?
Ask them if they want to do business with you? Is your price fair? Do they feel confident you will deliver what was promised? Then you close by asking them why then, do they want to give the incumbent a second chance? What will be different after they speak with them? Nothing? Then why don’t we just take care of this right now.
It’s pushy. But it is the only way you stand a chance of winning the business. No risk-no reward. So there’s your strategy for dealing with a last look provision. Oh, and another thing, when you have a customer who is unhappy and wants to shop around, make sure you ask for a last look provision too. You stand a 90 % chance of retaining the business.