That Prospect... Dead End or a Golden Opportunity?
When business owners or salespeople hear prospects say, “I already have a contract for that, thanks anyway” they too often think there is no opportunity. They hang up, cross the prospect off the list, and never contact the prospect again. Big mistake! They are missing valuable opportunities when they do this.
Think of what a contract is: It is a written, legal document that covers specific products/services for a specific block of time. A contract usually exists when there is significant business volume to warrant the creation of a formal document. You want in on that, right? The question is how do you get in on the opportunity if there is ALREADY A CONTRACT?? Here are a few ideas for you.
1. Is there INK? One strategy that many overlook is converting a prospect who has made a decision but hasn’t yet signed the contract. When the prospect says he/she just decided to enter a contract with another vendor ask the question, “Has it already been signed or is it in process?” If you hear that it has not yet been signed there is still opportunity for you. Be prepared with solid reasons why moving forward with anyone else is not in the prospect’s best interest.
2. Opportunities outside the contract boundaries. You can provide ancillary products/services (ones that don’t fall under the terms of the contract) without violating the terms of the contract. Therefore, there is still opportunity here, even though it may not be for your core business offerings. Also, just because a contract exists with one department doesn’t mean that all the departments within your prospect’s company fall under the same constraints. Here are probing questions you can ask:
“What does the contract cover?”
“Who else in your company needs _____________ (fill in with what you sell) and is not part of the contract?”
When the time comes for contract renewal, being a current vendor will put you in a stronger position to compete for the bigger bucks.
3. When is the next contract review? Contracts have a start date and an end date. Many contracts are one year in length. Companies will begin to review the contract for renewal approximately three months ahead of the termination date. If you connect with a prospect even three months after a contract was signed, you may only be six months away from the contract review period. If you want to be considered during the next review you have some work to do. Find out who is on the decision making team. Meet with each of these people to find out what is important to him/her when selecting a new vendor. Continue to stay in touch with relevant, high value communications so when the time comes to review vendors you will be included. Here are a few probing questions you can use:
“When is the contract review period?” (It may be just around the corner; keep track!)
“Who do I need to introduce myself to in order to be considered during the next contract review?”
“What is important to you in selecting a vendor? What is important to your boss?”
4. Taking the current contract over. It happens and you can do it too! Consider this: Most contracts have a termination clause. Depending on whose lawyer wrote the contract, the termination clause can be for cause or for no cause at all. It can be with 90 days’ notice, 30 days’ notice or with no notice at all. Ask how happy the prospect is with the service he/she is receiving. Don’t assume that a signed contract means the prospect is satisfied.
Check this out: Several years ago, three companies competed for a three-year, multi-million dollar contract. One company won. Of the two companies not selected, one just stopped calling the prospect. That was a big mistake and in a few sentences you will see why. The remaining company called the decision maker every month to check in. It took him all of 20 seconds. He said, “How is everything going? How satisfied are you with the service you’re receiving from the vendor you chose?” By the end of the first year of the contract, the decision maker was no longer happy with the service she was receiving from the chosen vendor. She tried to rectify the situation but came to the conclusion that it wasn’t going to improve. She exercised a 30-day termination clause. What do you think happened next? Did she go back out in the marketplace with another RFP (Request for Proposal) to choose the next vendor? No! She just gave the multi-million dollar contract to the guy who called her every month.
What’s my point? When a prospect says there is already a contract it is just the starting point for you. There is STILL opportunity! Roll up your sleeves and get in there so you can find it!! These dollars can be yours.
For other tips on how to revamp sales opportunities, see Caryn's post How to Close a Deal – Flipping a “Not Now” to a “Yes!”, or watch her online course at Growth Institute.
