When is a sale truly DISCRETIONARY? How is it different from other B2B sales?

When interviewing for new sales hires, the question I always ask when looking for someone who has experience of closing discretionary deals is:

“What happens if someone doesn’t buy from you?”

A few candidates will reply - "They don't buy at all"....

When you dig deeper into their answer, even in some of these cases, you can find that the customer buys either from a competitor, or if not, then purchases a substitute product or service instead. For a sale to be truly discretionary, if the prospect doesn’t buy from you, they won’t buy from anybody. That is to say, they carry on doing their line of business as before, quite happily. Whilst you may have convinced them that by taking your product or service, their business would have been more efficient or more profitable in the long-term, you have either failed to adequately quantify those benefits (or they may not seem real to the customer) or you have failed to identify a suitable to trigger. Of course, as they are not buying from anyone else, the sale is not lost in the normal sense. However, for many businesses, the timing of revenue is critical to their survival. It is the sales team’s job to bring that revenue forward as much as possible.

Another way to look at it, is to examine how the discretionary sales process itself tends to differ from a more convention sale (e.g. buying an engine):

Discretionary sales also require a different mind-set to traditional sales. Traditional sales are often more competitive, as it is a clear that a sale will be made, the only question is by whom. Discretionary sales tend to be less competitive, as the customer may chose not to spend money at this point (particularly if there is a relatively long pay-back time). It is sales' imperative, to close the deal sooner rather than later. In that sense, the value the discretionary sales person brings is as much in how far can they bring the sale forward, as it is in the revenue value itself. For example, if a service is likely to become accepted by the mass market and therefore move from “discretionary” to “required” in 2 years’ time, if the sales person can sell to a customer in 3 months’ time, they have brought the sale “forward” by 21 months. This generates 21 months’ more revenue (if it is a service) or, for many start-ups, it can mean the difference between success and failure as they may run out of funding before their service becomes “required”. Any business which ascribes its failure to the “being ahead of its time”, probably should have spent even more time examining the discretionary sales process.

MINDset

Traditional sale 

“I know that this customer will buy something now.”

“How do I ensure that they buy it from me?”

Discretionary sale

“I know that this customer may buy something at some point.”

 “How do I ensure that they buy it now” (because if I can, they will almost certainly buy it from me).

Discretionary selling is neither easier nor harder than traditional selling, but it does take a very different type of approach. It requirements a much more consultative attitude. Unless the sales person can clearly explain the problem being solved for the customer and, most importantly, why that problem needs to be solved now, any discretionary sale is going to come out a poor second to everything that “has to be done”. A clear symptom of this is a sales team reporting positive feedback from many prospect meetings, but those opportunities not progressing through the sales funnel. The danger in this is that it can lead to over-optimistic sales forecasts. Whilst it may be true that the chances of each prospect buying is high (given the positive feedback) and therefore deserves a good weighting in the sales forecast, without taking into consideration the likely time-frame (and with a discretionary sale, the time-frame can be open ended as no decision needs to be made), then the short-term forecasts are likely to be inflated.

Discretionary sales are challenging. However, they can also be immensely satisfying as they can bring customers and vendors together to drive change. This is not a business relationship driven by necessity but rather by a mutual desire to improve the way business is done and drive value for all concerned.