I was in a board meeting yesterday reviewing the sales pipeline for a portfolio company walking through the wins and losses. As I wrote in an earlier post, it is extremely important (to the extent you can), to get good data on your losses. Many times you learn more from your losses than from your wins. We like to know who we lost to and why. We keep a running tab of these losses so we can figure out some key trends, how our competitors are selling against us, and determine what sales tactics we need to employ to reverse the losses. Interestingly enough, over the last year a trend I have been seeing is the "do nothing" trend from enterprise customers. We find out that the potential customer has budget, we are selected as the winner, and then they do nothing. Obviously, the earlier you can identify a potential for spinning your wheels the better off you will be. Mike Nevens has a great post on SandHill.com outlining this new reality and ways to determine if you are spinning your wheels early in the sales process or methods to make your project one of the 5 out of 30 projects that actually get implemented rather than just approved.
The CIO of one of the largest retail banks in the US recently told me that he has about 60 new projects under evaluation. About half of them will pass technical, functional and investment hurdles. He will then fund 4 to 6 over the next two years.
That means that 25 or so projects that meet all objective criteria will not go forward.
Software vendors and investors need to understand and deal with this reality.
This is the new reality in selling to enterprises – doing nothing may be a bigger inhibitor to sales growth than your competition!