Top Reasons Sales Proposals Are Rejected

Author: John Honovich, Published on Apr 22, 2015

A survey of 100 security sales professionals named 3 top reasons sales proposals are rejected:

  • Price
  • Larger integrators
  • Existing relationships

In this note, we break down each of these 3 reasons, sharing color commentary from the sales professionals surveyed.

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Comments (31)

In a somewhat related study, we surveyed single men at nightclubs to find out why they are being rejected, and were shocked to find out that 73% of adult women in the United States are lesbians.

That's a clever comeback.

The question then becomes how do you unpack the price rejection. Is everyone lying to themselves about price being the reason or?

Not intended as a "comeback", so much as a satirical look at the way that salespeople in this industry evaluate their own performance. They're typically poorly trained, and don't sell so much as they just take orders and do moves / adds / changes work.

Not sure the lesbian thing holds here since that would imply that the prospect is deceiving the salesperson of their real reason for refusing, by falsely claiming price.

Even though one could fault a salesperson for not convincing the prospect of the value of the sale, it is still true that the prospect believes price is the reason.

IMHO, people are more embarrassed about price being the real issue and are more likely to cover it with some other reason.

"IMHO, people are more embarrassed about price being the real issue and are more likely to cover it with some other reason."

My experience is the opposite. It's easier to say it's price, because it implies the fault is with them, i.e., the customer is cheap or the fault is with the product, i.e., the company has mispriced the offerings.

To that end, it's easier for a guy to say a woman is a lesbian than admit some deficiency in their own character, looks, charm, etc.

Ok, got it now. I agree when left with no feedback from the prospect the easiest thing is to call the customer cheap.

"IMHO, people are more embarrassed about price being the real issue and are more likely to cover it with some other reason."

Here I was talking about the prospect being embarrassed not the salesperson, just to clarify.

Conveying the value of the solution, the features and future-proofing benefits of the design and the superior performance characteristics of quality equipment just falls on its face when they have only a Costco budget. We frequently lose to lower bidders and that's okay in my view. Those who choose on lowest cost often come back to us for damage control.

No one wants to hire their kidnap & ransom consultant based on the lowest bid. It is puzzling they go that route on life safety & security systems.

"No one wants to hire their kidnap & ransom consultant based on the lowest bid. It is puzzling they go that route on life safety & security systems."

In fairness, a kidnap and ransom consultant, in the very rare event it is needed, is far more important than your typical camera system, yes/no?

John,

Is K&R planning more important than video? One helps you identify and counteract threat-indicative activity e.g. site surveillance, personnel tagging, early perimeter penetration tests and other indicators your expat's are being surveilled. The other contributes in successfully recovering from an obvious failure of the threat identification practices and procedures, including the contributions of video, intrusion and training in spotting and countering preattack activities.

In 30 years of dealing with a multitude of threats I learned early to buy or select on quality & suitability for intended purpose, THEN negotiate a fair price. That policy never failed us.

When I saw this

"Most of our customers want to do project, but many of them are schools and just don't have the money to do the project the way it should be done."

My first through was why wasn't a lease offered?

Just a through or two...

Some of my concerns with leasing are the risk involved. It's one thing to lease a car, but installed product seems to have much more risk.

If the customer defaults on the lease, do you dispatch technicians to rip out the security system and infrastructure? How much does that cost and how likely is it that the customer will cooperate when the techs arrive to reclaim the product?

Use a leasing company. You get paid on completion and it's up to them to collect so it's not your concern. If you can get them to lease and pay the points..do it.

Thank you, that may have just changed my mind!

When I saw that remark

"Price, is the obvious answer, although I feel I have failed as a salesman when I get this answer as it means I did not sell the value of my solution."

I see a professional sales person who is also an honest salesperson and I see someone who will grow over time and learn to overcome such an objection.

Suggestion:

Do not thank of yourself as a sales person but rather as a professional consultant who their to solve your client's problem with, in the end — a true solution not a fix.

Do not think of the customer as a customer but rather as a "client" looking for a solution to a real need.

Educate the client to this fact and you will win!

Then when the client plays the price card one can do one of two things get up and walk out (you will not make it past the door) or better yet simply say.

"I designed this solution to solve your issue, buy this solutions and I'll willing to spend the night in you're building, force me to take short cuts and I simply will not spend the night in this building".

Remember your the expert and the client is seek a real solution from an expert!

If your able to set up this client/consultant mood your also likely to not have to deal with third-party bids!

O'yes, never bid a "same/same" solutions".

You must make your solutions standout from the hoard of bids the client may have all ready gotten or plan on get.

You do so by looking outside of the box, in other words, stop following the mob when it comes to hardware, The mega-companies out there ( and we all know who we're speaking of) do not always have the best offering but rather more often there offering a "plan jane" solution and not the cutting-edge solution.

A really low bid is most likely to include last years hardware which the provider is seeking to dump.

Lastly, and this one is directed more to a company owner, if you see your company as a dealer/provider then play with the dealer/providers and live with the outcome. However, if you see your company as a "true" systems integrator" than do so but be willing to staff your company with the right people including engineering folk, drafting folk and professional sale people and drive professionalism throughout your company. Sell a solution not a like minded hardware choose — dare to be different and you will be rewarded and the price issue will come up a lot less!

Sorry for the rant, just a through or two...

I think that some clients have no idea of even the order of magnitude of what a professionally installed surveillance system can cost. Unless he or she has purchased something like this before, the client may be thinking hundreds of dollars when the actual cost is thousands of dollars.

I always give my prospective clients a ballpark range of costs verbally: "This security assessment will cost you in the $10,000 to $12,000 range. If this is along the lines of what you think you want to spend, I will be glad to prepare a written proposal". Usually the client that thought that the project would cost $500 will say something like "let me talk to my boss and I will call you back", while someone comfortable with that price will go ahead and ask for a proposal.

Learned this one the hard way and it has saved me countless hours of fruitless proposal writing over the years.

A lost deal can be because the products proposed are too expensive or the margins the integrator applies are not competitive with the competition (or both). The survey responses don't make it clear where the biggest problem lies. There is a lot of ground between a high end solution using Axis, Sony, etc. and a Costco kit. A big part of the market has realized you can get a high quality camera for a third of the cost of the big names. It would be wise for integrators to have both a high end and a budget solution to propose and try to have a good understanding of the customer's budget going in. But if the customer has a Costco budget then it is a waste of time in the first place.

A lost deal due to TCO is a lost deal but it is well worth the effort anyway. I have had executives call us in saying something like "orginally we couldn't spend what a quality solution would cost, but your company's competencies impressed the heck out of us. Now, this project needs an integrator of that caliber and we are calling you".

We need to remember to seize every opportunity and not dismiss anything out of hand on the premise the low price guys will get it. Making potential clients aware we are recognized experts in our fields of practice and available in the future pays unforseen dividends in the long term.

John, thanks for posting this. This is a topic string that everyone can benefit from regardless of where you work or what industry you are in.

At Chesapeake & Midlantic Marketing, my primary role is to create and leverage digital materials that our sales team can use to properly assist clients wherever they are in the buying cycle or "Buyer's Journey". By directing prospects carefully to specific digital material a sales person can properly qualify a client while simultaneously providing an educational experience that will save EVERYONE time, including the client. And if these digital materials are included in an inbound marketing system there are ways to verify through automated reporting which materials a specific client downloaded. This information can then be plugged into a CRM system for a bird's eye view of the opportunity. Then you can ma out where the customer is in the buying cycle and apply the proper amount of man-hours to the opportunity.

The types of digital material we produce include sample system pricing, technology education, informative videos, brochures, 3rd party reports, white papers, PowerPoint presentations, webinars, online demos, etc. In this case, sample pricing for different system types/capabilities would have prevented so much wasted time as described in your article.

There was one specific video that put our team on this path and it is a perfect fit for this topic. It comes from an event I attended in Boston and I think most sales peope will appreciate the message. It's about 30 minutes long and well worth the watch. These 30 minutes could easily save someone hours or days this month alone.

https://www.youtube.com/watch?v=qLQRtHuDyZs

Best of luck prospecting!

Matt

I watched that video. I watched a few others from the series, but that one does resonate. Good mention Matt, thanks.

I love it when large companies say stuff like this:

"Our pricing, we are a big corporation and we can not compete with "Mom and Pop" shops that have no overhead."

Doesn't that really tell you that your "overhead" either hasn't been explained as a benefit, or, worse yet, that the customer doesn't see it as a benefit.

What does this "overhead" consist of? A big fancy office? How does that help a client?

Phone support. Administrative support. Training. Inventory. Accountability.

Every client has my number. They can call me anytime.

Administrative support? Is that cliche?

Training is included with every system. We use easy to use products so this is a simple thing to provide.

Inventory is over rated. I can have just about any item needed in a day or two. If someone needs something sooner than that, I have yet to meet them.

Accountability is something I find harder to achieve with larger businesses. I would rather speak with someone who has skin in the game (ownership, partner), than an underpaid lemming that couldn't care less about me or my account.

They can call me anytime. Administrative support?

When you're up on a ladder or under a subfloor and your client needs a copy of the June thru August invoices, or that FedEx tracking number, etc., it can provide a faster response to the customer to talk to a well trained lemming.

Accountability is something I find harder to achieve with larger businesses. I would rather speak with someone who has skin in the game (ownership, partner), than an underpaid lemming that couldn't care less about me or my account.

In this case the Accountability comes not from the lemming, but from the perceived permanence of the structure itself. Knowing only what a contractors cell phone is and what his rig looks like is not reassuring when his cell phone mailbox is 'full'.

Inventory is over rated. I can have just about any item needed in a day or two. If someone needs something sooner than that, I have yet to meet them.

I think we all know the guy who needs everything 'yesterday', right? ;)

When you're up on a ladder or under a subfloor and your client needs a copy of the June thru August invoices, or that FedEx tracking number, etc., it can provide a faster response to the customer to talk to a well trained lemming.

I don't think invoice copies are going to stop the world. But, even so, I would make sure to have them in PDF format in email or on my Google Drive, where they could be accessed and sent from my phone. One minute quick fix. I don't need an administrative assistant 40 hours a week to forward an invoice. That would be a minimum of a $40,000/yr unnecessary investment.

In this case the Accountability comes not from the lemming, but from the perceived permanence of the structure itself. Knowing only what a contractors cell phone is and what his rig looks like is not reassuring when his cell phone mailbox is 'full'.

We are back to perception and the presumption that you assume it adds value. That may be what you'd like it to be, but a client may think otherwise.

And my voicemails have never gone a full day without a call back. My inbox is never full. In fact, clients can usually reach me the first try with a direct number, not call an office and speak to an auto attendent that only offers a voicemail box, or worse yet, a human who answers and only offers the same voicemail box. At least the auto attendent isn't snarky or costing me more by inflating overhead even more.

I think we all know the guy who needs everything 'yesterday', right? ;)

I also have the ability to reason with unreasonable people and show them what reality dictates. If they won't listen to reason, they can then pay your overpriced, overhead inflated prices, for service today, instead of saving real money by waiting a day or two. And that same client is going to be the biggest PITA down the road, so I thank you for taking him off my hands anyways.

Bottom line is that we both have different perspectives and will likely not agree on the subject. We aren't likely to convince each other, so this will be my last post on the subject.

I think we can both agree with two basic statements.

A) Many smaller clients may not see a brick and mortar presence as a benefit worth paying for.

B) Many larger ones may.

You personal conviction and integrity may extend the bounds of A into B more than most, but to get more of B, you need to hang the shingle.

I tend to find that a lot can be handled with more qualifying. More consultation and open conversations with the potential client usually get me an idea of their price/budget before I ever even begin to talk price with them. What is there risk and potential dollar value of that risk? What do they currently spend on security measures etc... If it becomes apparent that we are not on the same page I find a polite way to punt and let the potential know that we are not the right partner. Saves me a lot of time not writing proposals for unqualified potentials. The more I learn up front, sometimes to the slight annoyance of the potential (everyone wants to know cost), the more time I save to spend on real potentials. And designing a good camera deployment takes a lot of time and attention to detail...as you all know...so the more time we can save on unqualified customers the better.

THEN, I can build value in our solution and propose a system that fits the end user and both parties walk away happy...usually.

Every sales guy has a style and I learned from one of the best to adapt anything to your own style. I know I can't knock doors and ask for business. It's not me and others can do it so very well.

I have a simple method I teach new sales people and it works for some and not for others.

First, sell yourself. You don't have to be amazing. Just explain how you add value to the person you are with.

Second, sell your company. You might not be there as long as the prospect will. Even if you have complete name brand recognition or no name at all. What do you do well.

Third, sell your solution, which is a combination of step one and two along with what you are offering and what it will do for the prospect. They are looking for a solution, even if a simple widget is all that is needed.

If there are objections, answer them and sometimes you need to refer back to step one.....

i rememeber having a total dislike for sales when I was in operations. LOL!

I'm a facility manager and I can tell you why I reject proposals:

1. I really dislike the sales person - and no I'm not lesbian. Especially the over confident know-it-all type that wants to chat about my last vacation drives me up the wall.

2. They think they know what solution is good for me before they even come in the building and they make no effort to understand what I want. Maybe they do know better (though I doubt it) but at least listen to what issues we have and address them.

3. The quote does not reflect at all what was discussed. E.g. we wanted access control and security and the quote only contains one. If you don't have attention to detail you're not going to get the job done properly.

Cost - yes I can see that a lot of time people will reject for that reason. Though I believe as a customer I also have a responsibility to be somehwat edcucated before I start a project and not be totally oblivious to the options and the cost of those options. It makes me look dumb if I have to go back to my boss and triple the budget we agreed on beforehand.

A past mentor implanted the message of "set price aside, establish the mission operational pain and create a defined solution". This mindset carrries for both buyer and seller.

Sadly the sales channels are clogged with preached solution scripts with value not understood by the presenter or purchaser. Leaving a "medicine man" pitch with an "at that price it just might relieve my pain" purchase.

Many times I have the job before i even set foot on the site.

I always listen to the customer or client as they always tell me that the others dont listen. Be the Best Listener.

I always sell value, quality, price in that order ( good relationships )

and most of all i aways watch out for arragance as that set s me up to fail.

Good Impressions, Good discriptions, Good Presentations, and

most of all Know what your talking about. Research, Read, Find out details

No one hates it worse than a arragant know it all who does not even know what thier talking about. Just blowing wind to sell products

That fact is you will never get 100% of your sales attempts. Just face up to it.

Be Yourself and dont try to be it all for everyone. some people will have you pegged for failure right from the start .

Be the Professional, in Dress, Presantanton, Attitude, Character, and leave a good impression.

If price is the objection you have not established need or desire. Establsish need early in the sales cycle. For the prospect, price and value are intertwined.

Thank you Jeffrey Gottomer ;)

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