In the business-to-business sales process, there are six to eight moments of truth where you need to execute important agreements and tradeoffs — both inside your company and with your prospects — that will determine the size and profitability of the sale.
Identify the pivotal agreements that you need to get from your customer and prepare yourself to ask for each at the right time in the buying cycle. Studying pivotal agreements from a cross-section of companies and industries, Corporate Visions found they consistently fit into one of five types:
Access to power pivotal agreements
Most sales processes have a step that involves getting executive buy-in. This can obviously tie into the “access to power” type of pivotal agreement, but an actual pivotal agreement is significantly more than that. An example of an access to power pivotal agreement would be getting a 30-minute meeting with just the CXO early in the sales process to understand and confirm her objectives for the project.
Access to information pivotal agreements
Customers often resist sharing information with you because they prefer driving the conversation and sharing only what is in their best interest, not yours. They have no desire to give you information that will increase your leverage in the negotiation. A pivotal agreement would be one in which you get access to information that your customer isn’t naturally inclined to give you.
Imagine you’re selling a product that can help improve your customer’s margins. A pivotal agreement would be getting access to the customer’s margin trends for the last three years so you can run “what-if” scenarios and ROI calculations.
Proof opportunity pivotal agreements
Proving the efficacy of your solution can solidify many sales opportunities. Proof opportunities can literally create the tipping point in your favor. However, ensuring that you structure the proof opportunity in a specific and measurable way is critical for its success.
The proof opportunity is a pivotal agreement only if you gain a commitment to implement a pilot according to your best practices. This includes a defined framework for participation and results that will be tracked, along with an agreement that providing the pilot proof is accepted as a commitment to do a broader rollout against a preset timeline.
Deal structure pivotal agreement
Customers will tell you they want better terms or pricing or service level commitments because they are “special.” They ask for special things without wanting to put any skin in the game themselves, giving you visions of a potentially lucrative deal without making any true commitments. In these situations, getting a contractual agreement that pricing is contingent upon the customer’s hitting specific volumes, combined with clearly defined consequences if the customer drops below those volumes, is an example of a pivotal agreement.
Expansion opportunity pivotal agreements
For most B2B selling situations, you practice a “land and expand” strategy, knowing that once you get your foot in the door, you will then look to create opportunities that expand the relationship over time. One way to negotiate expansion opportunities is to do quarterly business reviews with your customers. If you gain agreement that you will do a quarterly business review with key executives to share the impact of what the partnership has accomplished in the last quarter, including agreed-upon metrics, this becomes a pivotal agreement because it elevates the opportunity for expansion.
Pivotal agreements are not the typical “check the box” activities associated with so many selling methodologies where you are trying to show deal progress. They are well-planned commitments that you know will improve your ability to differentiate yourself from your competition, expand the deal size and protect your margins.
Excerpted from “The Three Value Conversations: How To Create, Elevate and Capture Customer Value at Every Stage of the Long-Lead Sale,” (2015 Corporate Visions) by Corporate Visions executives Erik Peterson, Tim Riesterer, Conrad Smith and Cheryl Geoffrion.