Conserve POC Calories
Don't waste too much energy on a deal until you've asked the hard questions
Many Founders and early sales teams believe they need to spend a lot of time with a prospect to earn a deal. Time is scarce and closing customers is challenging enough — instead, ask hard questions upfront to avoid expending wasted calories on a prospect not likely ready to buy. Although there is real merit and required effort in doing everything you can to win a deal, strong qualification upfront and a compelling response to the following questions go a long way.
If the prospect doesn’t have a solution yet
You should ask: “If you decide to do nothing, what would happen?”
Why this matters: If the prospect can stick with what they have and your solution is only slightly better, it’s usually easier for the prospect to stick with what their doing. What you need to do next is find out their workflow to uncover the potential root cause of their challenges today.
If the prospect is already using a competitor
You should ask: “It’s always going to be easier to stay with {{competitor}} since you already have an agreement. It sounds like we are uniquely different for X and Y reasons. If we can solve what we discussed, how likely are you to switch to us?”
Follow up question: It’s best practice to ask, “when is the renewal for {{competitor}} and do you plan to replace them before or at the time of your renewal?” We see teams get burned all the time by not asking this question. They run an amazing evaluation only to find out they’ll need to wait 8 months to replace their competitor who now knows you are a threat and have 8 months to fix their product and keep you out of a deal.
Why this matters: Although you may know exactly why a prospect should use you because your competitor has an inferior product, it’s always much easier to stick with whatever solution the prospect already has than to purchase something new. You must get the prospect to identify a set of criteria in which they will evaluate your solution that proves how and why it is better and different than the competition. You as the Founder and/or seller must prove it is better by helping define the success criteria that allows you to stand out in comparison to the previously chosen vendor.
If the prospect is on open-source and wants to purchase your solution
You should ask: “We make open-source easy for you to get value and unless you need {{differentiated Enterprise offering(s)}} why would you purchase from us?”
Why this matters: Your open source offering is there for letting people build. If they haven’t built enough to know the value of your offerings, why would they then move to a commercial solution not having tried open source first? If they are already using open source, do they have any legitimate issues that would cause them to buy from you?
If you have a self-service / free option and a hand raiser requests the Enterprise tier
You should ask: “It sounds like you’re already getting plenty of value from our current tier, which we love to hear. Given this upgrade to Enterprise will require an evaluation and formal process, what prevents you from staying on the current plan?”
Why this matters: You’d be surprised how often customers don’t realize how far they can get and how much they can pay your company without needing to run a formal sales evaluation. You will build immediate trust and eventually drive much larger deals if you get the prospect to value quickly, get a technical win with very few obstacles (ie your sales process), and then build a business case for $100k+.
There are a multitude of other steps required to execute a deal but to prevent expending too many calories and effort on a deal just to find out you lost it can be prevented by asking questions like the ones above.