Landing your first big customer is a big deal. But before you get too excited, stop and examine how much this new whale of a customer wants to buy from you -- because the size of the first purchase is more important than you think.
Companies make first purchases for lots of reasons, but they don't always go into it aiming to develop a significant relationship with your business. Often their purposes are more short-sighted. Your job is to figure out what exactly this big company wants from you:
- Does the prospect need to fix a problem for the moment, or does the prospect have a problem to fix for a long time?
- Is the problem in need of fixing a true change or just a hedge against the risk of an underperforming current vendor?
- Is this purchase a demonstration of your company's true capability and capacity, or is it just the first tiny step in a very long staircase?
The size of a prospect's first purchase reflects their level of confidence in the promises you have made. The buyer must balance his risk in making you a partner/vendor/supplier. Unless you can mitigate that risk and take his fears off the table, he will be left making little buys to prove your capability to himself and his colleagues.
Here's what you need to do:
1. Help prospects right size their first purchase
Start by asking this question to your prospect in your sales process:
"What is the critical mass of purchase necessary for you to know we can produce the same results in a rollout?"
I work with companies often who have to explain the following:
- The purchase of a few lanes does not in fact mean a declared preference for your 3PL logistics services
- Printing 500 brochures does not demonstrate your capability to handle a multi-insert, variable data mailing.
- A diversity training class does not accomplish the same thing as a diversity initiative leadership implementation contract.
2. Build the roadmap to a relationship, not a purchase
Companies who make an initial purchase from your business may be tempted to take a "let's see how they do" attitude. There is very little risk to them and it puts all of the engagement responsibility on you. The problem is that without strong engagement, you won't grow your relationship with their company quickly. Better to get it early and ask for it up front. Do this by setting up a roadmap to a relationship with clearly established mile-markers to show that you are aligned and making progress:
- Performance success measurements - Get these in both size and timing and make sure they're in writing.
- If/then commitments - Don't get into a situation where your business works hard and your customer takes a "wait-and-see" approach. If you have performance markers established, as soon as you reach them use them to trigger and grow a deeper relationship.
- Investment = Engagement - If you want to secure bigger initial purchases, make sure the prospect is invested in the development of the solution and the bid along the way. they can demonstrate it by the giving you their time, access to the right people at their company, and the information required to maximize your chances of success. If your prospect is not investing, you are just a supplier, not a real potential partner.
If you don't manage the risks of purchasing from you, your prospect will manage it for themselves. They do it by delaying or downsizing the purchase. You manage it by anticipating their risks and showing them how you will mitigate them.
Start with this question in the conversation:
"What could go wrong and who would be most negatively impacted by it?"
The answer to this question holds the key to the bigger deal. Your prospect's fears usually fall into one or more of the following categories:
- Work - Anything that looks like it will take more work, even if that is a short-term issue on the way to less work later.
- Change - Nobody likes it and moving to you is by definition a change.
- Conflict - You can stir up all sorts of internal political problems or issues with your prospect's customers.
- Mistakes - The big one. What if something goes wrong?
If you want to get the bigger first purchase, do not focus on your unique value proposition. That only gets you a purchase, not a big purchase. Focus rather on your customer's need for control and low-risk transitions. Those will dictate the terms of a bigger relationship.
Photo courtesy of Flickr marc falardeau cc