Peter Cohan on Doing Discovery

The bulk of his experience is in complex enterprise software and strategic systems sold to varied audiences in a range of vertical markets. He has enjoyed roles in technical and product marketing, marketing management, pre-sales and pre-sales management, sales and sales management, senior management, and the C-Suite. He has also served on boards of directors.

In this session, Peter will share his insights and learnings from his latest book, Doing Discovery, which focuses on the single most important element of software sales and buyer enablement process.

Welcome to the PitchLink Sales and Marketing Lit Fest, Peter.

Peter Cohan  

Well, good morning, good afternoon, and good evening. Many thanks for inviting me. That guy sounds terrific. I want to meet him. Let’s dive in. The only thing between everyone who’s watching this and the end of this session or the end of day one is me. So I apologize for that. Alright, we’re going to talk a little bit about doing Discovery, but we’re also going to discuss a series of outcomes that the lack of discovery or insufficient discovery can result in—a sort of dangling preposition. We’ll talk about increasing sales productivity and avoiding the dreaded “no decision” outcomes. So with that, I want to introduce this slide to you.

What you’re looking at here is the technology adoption curve, and my prediction is that approximately 16% of you who are listening to this will take action based on what you have learned and seen. 34% of you will give it some serious thought but probably not take immediate action. Another 34% of you will likely try to avoid taking action because you’re very comfortable where things are. And, of course, the final 16% of you are not even here right now. That’s just the nature of the population.

Many sales organizations, CROs, and heads of sales are seeking to improve sales productivity. I don’t think there’s anybody in the world who is not seeking to improve sales productivity. And what people do or what people look at, spans a broad range of tools, skills, and technologies to try to enhance sales productivity. For example, people look at training, software incentives, playbooks, reorganization, tracking, measuring, communication, lead generation, administrative task reduction, better tools, hacks, and methods. And I’m not going to disagree with any of these approaches. In fact, the Doing Discovery book, Great Demo, and our business are all about, if you will, methodologies to improve sales and presales productivity.

However, each of the things most organizations look at yields small incremental improvements, which are all good. But what if there was a way to move from small incremental improvements to really embracing some step changes, some larger knobs, if you will, that one could turn to really impact the organization and outcomes fairly rapidly? Well, there are, or I should say there is.

All of you have probably encountered the dreaded “no decision” outcome. This is where you have a sales opportunity that’s been placed on the forecast, you expected it to close, but it doesn’t. These are known as no decisions or no outcome. You don’t win, you don’t lose to a competitor. The prospect chooses to do nothing.

It turns out that for B2B software, Enterprise Software, Gartner estimates that on average, 45% of all sales opportunities that are placed on the forecast as closable end up as a no decision outcome. In other words, they go nowhere. That means that nearly half of the team’s opportunities end up as wasted time and energy. In fact, when you look at the rate of change, what Gartner said is that in the best cases, companies operate around a 20% no decision rate. In my experience, that’s pretty rare, and in some of the worst cases, 80% of their opportunities end up as no decision. That is really frightening.

So I invite you to ask yourself or ask your company, what is your current no decision rate? Because based on that, you can do some simple math. In fact, if we use 45% or average close to 50%, what it means is that if you have a team of 10 people, what you are really operating at in terms of true effectiveness is a team of 4-5 people. If you have 100 salespeople, that’s like throwing away 45 of them because the opportunities that are represented are going nowhere. So that’s a huge knob. Would you like some of that time back in your lives? And more importantly, would you like a way to improve your productivity with a huge lever or huge knob?

So, for example, what would it mean if you could improve and reduce your no decision rates by 10%, 15%, 20%, 25%, or 30%? Well, that would be like getting back a large portion of your sales force. Or perhaps a better way to phrase this is the time you spent working on opportunities is much more likely to yield fruitful results, independent of any other attributes. So now the question becomes, how? How can we do that?

Well, three simple ideas. There are typically three reasons that a sales opportunity ends up as a no decision outcome. These are opportunities that are placed in the forecast, they should close, we hope they’ll close, we think they should close, but there are typically three reasons why they might not. Number one, no critical business issue. Number two, insufficient perception of value. And number three, no critical date.

So let’s take a look at all three of these briefly. This is a phrase we often hear: “Your product looks good, but we feel we can continue to live with our current situation.” So what’s going on here? Well, the symptoms that we hear from our prospect is they’re saying yes, yes, yes, yes, yes, but it never seems to close. The solution? Look at discovery skills, and in particular, explore. Does this prospect have a critical business issue that is at risk?

Let’s take an example of this. What you’re looking at here is a Great Demo or Doing Discovery situation slide. It is a simple construct used to capture and recommunicate.

The key elements of discovery are information that will yield a productive sales opportunity and buying process. So from the top, you’ll see that we start with the job title and industry. In this example, we have a VP of Sales in a midsize software organization. The critical business issue for this person is to achieve or exceed quarterly and annual quotas. The problem reasons are the pain points. This is what’s making it hard to achieve the desired objectives of the numbers for the quarter or year.

Now, what’s intriguing about no decision outcomes is that people are often willing to live with the hell that they know forever. If that hell, if the pain is not attached to a goal or objective that is at risk, if it’s not attached to an annual, quarterly, or project-based goal that is at risk. So what you’re looking at here is exactly one of the outcomes that will yield a no decision result. Our head of sales here is whining and complaining about all these problems and reasons, but if he or she has not attached this to the need to achieve the numbers, nothing will happen.

In fact, I had this conversation with a gentleman yesterday. I asked him, “What’s the biggest challenge you face in your job?” He said, “I need more and better leads.” Curiosity question, I asked, “Are you currently on target to make your quarterly and annual numbers?” He said, “Yeah.” I then asked, “What effort are you going to put into generating better leads?” After thinking for a moment, he said, “None.”

So, number one, critical business issue. Number two, have you ever heard prospects say, “We just didn’t see the value?” That is the number two reason why sales opportunities end up as no decision. And if we look at the analysis, it’s exactly the same. The solution? Improve discovery skills to uncover and be able to recommunicate tangible expressions of value, not from you, not from a third party, but from the prospect’s lips themselves.

On this situation slide, you’re looking at the lack, probably can’t see that mouse under the phrase, delta is the lack of a tangible set of numbers that would enable this person to take this project to management and say, “Hey, I’m looking to increase incremental revenues by two million. I’m looking to redeploy 2.5 full-time equivalents to other more valuable tasks.” That’s the value associated with the solution. Without a sufficient delta or value, you’re looking at a no decision outcome.

So, what do you think is number three? Let’s take a look. How many of you have ever heard phrases like, “Well, we’re not really in a hurry,” or even worse, “We need this yesterday”? Well, this is an example of situations where there’s no critical date or critical event. And by the way, a salesperson’s critical date is typically the end of the quarter, but that’s not your prospect’s critical date or critical event. It is something that is the driving force with a date that says, “I need to have a solution in place by this date because…”

For example, in the situation slide that I showed earlier, the example under critical date was a new field office opening in November, and this head of sales needs to have the solution in place before that office opens up because there will be many more salespeople in regions to deal with.

So, three reasons why a sales opportunity may end up as a no decision outcome: Number one, prospects in pain but not attached that pain to a top-level goal or objective that is at risk, a critical business issue. Reason number two, insufficient perception of value, specific tangible numbers coming from that prospect. Reason number three, no critical date. And if you want proof, how many of us would have ever written those papers in college or university if we didn’t have a due date?

Think about it, by the way, the phrase “we need it yesterday.” Why is this an awful phrase? Salespeople have happy hearts when they hear this. They hear this and think, “This is great. This guy’s going to close immediately.” But “we need this yesterday” means, “Well, I’ve lived with it yesterday and I lived with it the day before, and I lived with it the day before that. And therefore, I can continue living with this forever.”

Alright, ladies and gentlemen, that’s part of the crux of this. I want to talk now about doing discovery. Insufficient discovery is one of the primary reasons for sales opportunities to go overdue, to go to no decision, to fail. And what you see here are some of the outcomes of insufficient discovery to paint the picture. In the other direction, sufficient discovery yields some rather sustainable competitive advantages, which you can also see here on these slides. And by the way, if anybody would like the slides, I’ll show you my email at the end. I’m more than happy to ship these to you.

So, what about doing discovery? Well, I wrote the book because what I realized is that most organizations don’t know what they don’t know about doing discovery. Most sales teams, most presales teams, most customer success folks, in many cases, feel that if I can just uncover a few statements of pain, well, that’s all we need to know to pursue a sales cycle, when in fact there are many, many other factors that are involved.

Doing discovery lays out a complete methodology that takes you from simple statements of uncovering pain to exploring pain more deeply within an organization, to understanding the impact, who else is involved, what happens when this goes wrong, to the next level of quantifying the pain and what the change might actually involve.

That’s one of the three elements of avoiding no decision. Reengineering vision is level five, and what is meant by this is prospects often don’t know what they don’t know. They’re not really certain. Well, let me rephrase. The public domain does not simply tell them everything they need to know about what’s possible. It is only through conversations with a vendor that they can actually get clarity on that.

Level six here is applying this methodology to a range of different real-life situations, and level seven is where you’re actually practicing this as a methodology. So, doing discovery explains and serves as the manual, the guidebook for what you need to do and how to do it, how to execute the steps and generate the skills.

I do want to let you know that doing discovery is available on Amazon in paperback, Kindle, and audiobook formats. But wait, there’s more! The third edition of Great Demo, that’s the book on the right here, should be coming out in just within the next couple of weeks, and you’ll notice they really are a match set.

So, I hope you found this useful. There are resources on our website at greatdemo.com, including books, articles, blogs, webinars, podcasts, and more. You are more than welcome to access these things and take advantage of them. If you want to reach me, you can see the email down here in the bottom right: PCohan@GreatDemo.com.

I really enjoyed this opportunity. I hope people found this useful, and I’ll turn things back over to our fabulous host.

Subhanjan Sarkar     

Peter, thank you so much. So just so that you know, in the resources tab, which is right next to the chat, there is a resources tab. If you go there, you can download this deck right there. And of course, head over to Peter’s website where a lot of very relevant stuff is available, and you will find it very useful.

I will just wait for some questions.

So, that is one piece I need to figure out, Peter, you know, I mean when we are doing these 20-minute sessions, how do you have the question bit playing well? I mean, I think we are anyway. We’re sort of running a little late today because of a snuffle in the morning, but mostly I’m trying to see how meaningful questions and discussions can be had.

Peter Cohan    16:36

I think that using chat is terrific. Nil, for example, has made a beautiful comment. He said, “Spin, bat, MEDDIC, gap sewing. Do any of these ring any bells?” And the answer is yes. However, most sales methodologies don’t go deep enough. They just dip into the surface and they don’t explore things like the culture of the customer. For example, they talk about specific pains. They don’t look at related pains. They don’t look at the environment. They don’t look at the culture. They don’t look at a range of different factors that all contribute to making a decision. And that’s really what I’m urging people to do, to take a broader look at how to do Discovery. So MEDDIC, bet. Well, let’s take BET for a moment. BET is not a discovery methodology. It’s not. It’s a qualification mnemonic: budget, authority, needs, and timeline. A prospect can say yes to all those and yet the sales project won’t continue forward necessarily. Why? Hundreds of reasons. One is they’ve learned from prior experience that if they say no to any of those, they get qualified out and never see a demo, for example. They lie. For example, “Are you the person in charge?” “Absolutely.” Well, no. I’m actually part of a buying committee. Okay, so MEDIC, SPIN, etcetera, etcetera. These are all good. And what I’m urging people to do is to go one step further. So I hope that helps.

Subhanjan Sarkar 

Yeah, there is another one.

Peter Cohan  

And let’s see, at what level, yeah, what level in the buyer organization should the discovery meetings begin? Can discovery at different levels lead to very different answers? You betcha. If you are starting with somebody who’s an executive, discovery will be very short. Basically, they just want to articulate they have a critical business issue they want addressed, and they will delegate you down in many cases to their team members to actually do the real discovery. Conversely, if you’re working from the bottom and trying to move upwards for an organization, you’re dealing with somebody whose objectives and authorities are very, very limited, and you may need to actually use them to sponsor you as a champion, for example, upwards. So the book outlines this, that when you’re looking at different levels of an organization, you need to understand what their scope and their experiences are, what their influences are, and related, so that you can actually navigate through an organization. So I hope that helps. Partial answer since we only have limited time here. Any others?

Subhanjan Sarkar 

Well, if you want to elaborate a bit more, it’s not that we have to end right at this moment. So you’re welcome to explain a little more if you feel like Peter.

Peter Cohan  

Sure. There’s a four-box quadrant one could contemplate or a graph, I should say, that is a really useful thing to look at. You’ve got people who are experienced buyers and people who are inexperienced buyers. You have people who are champions and people who are not champions, and each of those four quadrants represents different approaches. So, for example, if you have someone who’s an experienced buyer, your job is to understand what their buying process is and to enable them. They’ve got a process, they know how to follow it. Your job is to anticipate and provide solutions that they need and map to what they are looking for to get the job done. They know what to do and how to do it. On the other hand, inexperienced buyers who’ve never bought enterprise software before, they’re going to need guidance. Again, it’s buyer enablement, and you need to proactively and gently but firmly help them out. For example, you could suggest, “Before we organize the discovery conversation, we should probably execute a mutual NDA, and let’s use your paper to make it easier.” That’s an example of enabling the process to move forward before they need to think about or ask for it. The same goes for champions. You’ve got experienced champions who know how to navigate their organization and the steps they need to take. And you’ve got inexperienced champions who are excited about your offering but have never been a champion before. Champion enablement is another dimension of this. And then you’ve got people who are not champions, who are neither experienced nor inexperienced. They’re just players, and you need to understand their issues, their involvement level, and their impact. Those four quadrants on a graph like that can help you understand how to approach individuals and work with organizations. So how’s that?

Subhanjan Sarkar    

That’s great. I have a quick follow-up question. This is from my session time, so I have to wrap up. My question is, how do you identify the champion? Is it the end user who is actually going to be directly benefited from your service or product?

Peter Cohan 

So, a champion is a squishy concept. Michael Bosworth in Solution Selling and Customer Centric Selling actually identified two different types of champions. He said there are sponsors, those are people who like you, they like your product, they like your company, and they will help you with the process. They will introduce you to people, they’ll give you insights as to what’s going on. But they tend to be staff members or lower levels. They might be power users, for example. On the other hand, Bosworth identified power sponsors, and these are people who are in positions of power and authority. They actually have the authority to make the purchase, or they are senior members of the buying committee or the buying team. They are able to sponsor you, delegate their authority through you, meet with other people, and gather information that would otherwise be difficult to gather. Understanding what a champion is is slightly multithreaded, and doing discovery helps to unwind this for you as well. Who am I working with? What can I expect from them? What can I expect from a staff member or power user versus a VP, for example? And how do I interact with these people? Thoughts on that?

Subhanjan Sarkar   

No, I mean, this is what I was trying to figure out. Obviously, it’s not the same thing, and depending on what you are doing and the organization and what you know about them, identifying a champion could become a tricky thing. Because I know one thing, unless somebody’s helping you navigate inside the organization, it’s very difficult unless you’re already familiar with the organization. It’s never easy, and you know there’s…

Peter Cohan

There’s a subtlety there, and that is if you are meeting resistance in an organization and nobody is resonating with the solution that you’re talking about, or even worse, nobody is resonating with the problem that you’ve identified or they have identified as sufficiently important, I would move on. You’re pushing rope. That’s a great example of a no decision outcome. And by the way, this is why I use this for this session. This is what sales and presales people face all the time. They uncover a problem, and they often whine and moan about things that we just encounter all the time, and yet do we do anything about them? Rarely. It’s the things that really impact our lives that we find the need to get done. I need to file my taxes. If I don’t file my taxes, I’m going to get fined. Well, okay, it’s a critical business issue. There’s value associated with that, and there’s a date by when I need to get it done. So it’s going to happen. On the other hand, you know, I really should clean the garage. How many times have we said that, and when does it get done? Oh, soon.

Subhanjan Sarkar 

Yeah, absolutely. That’s why Discovery really fits in, right? I mean, that’s where you need to be able to do that. Yeah, I think this is great, Peter. Thank you so much. I really appreciate your taking time to do this. I’m a big fan of this book, and I hope that a lot of people read it and, as you said, change those numbers, those statistics that you shared in the beginning. We need to move some of those numbers up.

Peter Cohan

Absolutely. Thanks very much for having us and for putting on the event.

Subhanjan Sarkar

Thank you. Guys, this is the end of day one. I will come back in a moment to do a quick wrap-up, and then you can network. I mean, there are a few of you still here, so just get to say hi to each other. Back in a minute.

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