Your competition isn't the main reason for lost deals

In the book The Jolt Effect, authors Matthew Dixon and Ted McKenna provide invaluable insights into why customers often end up not committing to a purchase. These insights are crucial for understanding and mitigating the factors that contribute to lost deals.

Here at Slays! Weekly, we bring you insights from all growth gurus in a 3-mins bit-sized form, so you can learn without wasting time reading the whole book.

Reasons for Lost Deals

Status Quo Preference:

Dixon and McKenna's studies reveal that 44% of deals lost are due to customers preferring to stick with their current situation.

Example: A company may choose to continue using their existing software because they are familiar with it, even if a new solution offers better features.

Indecision Despite Intent:

Interestingly, 56% of the time, customers express a desire to move away from the status quo and adopt the vendor's solution but fail to make a decision.

Example: A customer express a desire to abandon their status quo, but for one reason or another, is unwilling to make a decision and commit.

Commission Bias vs. Omission Bias:

The authors explain that people tend to feel more regret when bad outcomes result from their actions (commission bias) than from inactions (omission bias).

Example: A manager might avoid implementing a new system to prevent the risk of it failing, despite knowing the current system is suboptimal.

Decision-Making in B2B Purchases

Key Roles in Decision-Making:

In complex B2B purchases, there are three distinct roles:

•  Chair of the Buying Committee: Leads discussions and evaluates options.

•  Final Decision Maker: Holds the authority to make the decision.

•  Agreement Signer: Authorises the purchase formally.

Example: In a tech firm, the CTO might chair the buying committee, the CEO makes the final decision, and the CFO signs off on the purchase.

Causes of Customer Indecision

"I Need to Think About It". Dixon and McKenna found that this statement is highly correlated with lost deals and signifies indecision. And there are three main reasons:

• Fear of Choosing the Wrong Option: Customers worry about making a poor choice that could negatively impact their business.

• Concerns Over Inadequate Research: Customers feel they haven't done enough homework or considered all options.

• Doubt About Value for Money: Fear that the solution won't deliver the expected results, leading to wasted resources.

When sellers try to "relitigate" the status quo with customers who have already shown interest in purchasing, it generates a negative impact on sales outcomes 84 percent of the time.

While defeating the status quo focuses on demonstrating how the customer will succeed with your solution, overcoming indecision is about assuring the customer that they won't fail by choosing your solution.

Strategies to Overcome Indecision

Avoid "Relitigating" the Status Quo:

Attempting to reargue the need for change with customers who’ve shown intent to purchase negatively impacts sales outcomes 84% of the time, according to the authors.

Example: Pushing a hesitant client too hard to reconsider their current system often backfires, reinforcing their resistance.

Proving Success and Mitigating Fear:

Overcoming the status quo is about showing potential success with your solution, but overcoming indecision focuses on proving they won’t fail.

Example: Demonstrate case studies and success stories to reassure a prospective client that your solution is reliable and effective. Highlighting similar companies' successful transitions can alleviate fear.

Provide Clear, Comparative Data:

Supply detailed comparisons between your solution and competitors, emphasizing unique benefits.

Example: Use side-by-side charts to show how your product’s features and ROI outperform others in the market.

Leverage Social Proof:

Utilize testimonials, endorsements, and case studies from well-known companies in the same industry.

Example: Share a success story from a reputable client who faced similar challenges and achieved significant improvements using your solution.

Address Concerns Proactively:

Identify common concerns in advance and address them head-on during your sales pitch.

Example: If customers often worry about integration issues, provide a detailed plan and past examples of seamless integration processes.

Offer Risk Mitigation Options:

Provide guarantees, warranties, or money-back offers to reduce perceived risk.

Example: A satisfaction guarantee or a phased implementation plan can reassure customers that they have

Interested in learning more about The JOLT Effect? Stay tuned!