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June 13, 2005

Morph of a Nerd CEO – The Close

My father was a writer who could make prose sing – but he didn’t like talking about money so he was a lousy salesman.  Thomas Wolfe wrote a novelette about publishers taking advantage of writers’ reluctance to say “show me the money”.   So, in this case, I learned from my father’s negative example: I’ve always liked asking for money which is what closing is all about.

Selling is one of the most important jobs a CEO does.  If you are a sole practitioner, then you are the sales force as well as the product.  Even after you grow your company and hire professional sales people, you have to keep selling.    If you don’t go on sales calls, you won’t know what customers are thinking. There are some strategic sales that only a CEO can make.  You may even want to sell your company some day.

I blogged previously about prospecting and qualifying leads so now let’s suppose you’re one-on-one with a very qualified prospect to whom you want to sell something big.  Hopefully you’re not doing lunch so you don’t have to be distracted by worrying about not spilling or slurping.  Other people don’t like the way nerds eat.  Besides, if you’re like me, a whiteboard’ll help you sell and most restaurants don’t have them for some inexplicable reason.

Before you ever got face-to-face with this prospect, you did some research, right?  Listening is a good thing but you must have an idea what your prospect’s needs are before you make a sales call or you are wasting her time.  The worst ways for a salesperson to start a sales call on me was to say “now what exactly does your company do?” or “if you tell me how your business works, I’ll sell you a solution”.  It’s easy for us nerds to think that a customer will buy because we have made a breakthrough or because what we have to sell is the latest and greatest.  Not true for business-to-business sales as I blogged Friday: your revolutionary breakthrough may well sell because it reduces your customer’s costs by a mundane $.001 per unit or may not sell because it doesn’t.  Live with it.

Your customer also isn’t going to buy because it would be a good thing for your company if she did.  Sounds obvious but check your PowerPoint presentations to make sure that you sell the benefits to the customer only – not the benefits to you.  A smart customer will use the benefits to you of making a sale – customer would be a great reference, for example – to drive down the price.

If you are calling on a customer with one of your salespeople, be sure that the salesperson tells you what you’re selling to that customer.  Some people think courtesy calls are a good thing; I’d rather sell something if I’m seeing a customer.  I don’t want to learn about the customer’s golf game or last vacation; I want to learn how our product does or doesn’t meet the customer’s needs and you find that out by selling.

I’ll blog later on selling benefits rather than features but now on to the close.

You have to know what you’re selling.  Sounds obvious but lots of b2b sales calls are wasted because the seller doesn’t have a clearly defined proposition to sell.  You can’t close unless you know what you’re selling.

You have to know what you are proposing to charge the customer.  In fact, you need to get into price pretty early in the call or you’re likely to both be wasting your time.  You need to know how you are proposing to charge. Per use? One year license?  Some unit of service?  Some percentage of what your customer saves?  Creativity here is great but the customer has to be able to understand what you’re proposing and how the metering will be done.  A charging algorithm so complex that only a fellow nerd can understand it and which takes grid computing to calculate is impossible to sell even if brilliant (believe me, I’ve tried).  Knowing that the customer can afford what you are proposing to charge is part of the qualification that should have been done before the call.

OK.  Take a deep breath.  Sit up straight.  Ask your customer to pay you in a well-defined way for your well-defined product.  Remember that it is in the customer’s best interest to buy from you because your product or service will help her business in a way that no competitor can.  Not making a quick decision will be bad for her business as well as yours.  I know you believe this; that’s why you invented the better mousetrap in the first place.  But you also have to act like you believe it by asking the customer to commit to paying real money for the very real benefits you are going to deliver.

You won’t close every sale on the first sales call, even if you do everything I say and do it much better than I would have.  You will, perhaps to your surprise, close some.  As CEO you get to call on decision makers a level above the buyers your salespeople usually call on.  As CEO you can decide to modify the price or terms on the fly; you don’t have to check with anyone.  As nerd CEO you may even decide to modify the product (“sure, it can do that”) but this is dangerous to both schedule and sleep.  In general you want to sell what you’ve got.

You gain respect for you and your product by trying to close, by believing you can close on every sales call.  If you are on a call with one of your sales people, it should be you and not the salesperson who asks for the order.  In the many cases where the close doesn’t really happen, you should draw out the things that have to happen before the sale can close:  higher authorization at the customer?  Site visits?  References?  More information (shame on you if you can’t provide it instantly)? Legal review of the contract (you did bring a signable copy with you, didn’t you?)?  Make sure that the after-meeting action items include a followup between you and the customer executive.  If everything gets delegated, you won’t have a chance to build on your new relationship and to keep pushing for the close.

At best a close in a meeting like this will be a handshake. There will be legal review.  Things can fall apart.  But asking for the money is the best way to actually sell your product.  Anything less isn’t really selling.

But I still wish I could make prose sing.

Previous confessions of a nerd turned CEO are:

How to tell if you’re an entrepreneur; or podcast;

Starting as a sole practitioner; or podcast;

The first employees;

The power of silence in negotiation;

Sales 101;

selling innovation;

and when free is good.

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