Why 50% of B2B sales end in no sale

PLEASE NOTE: This transcript has been created using fireflies.ai – a transcription service. It has not been edited by a human and therefore may contain mistakes 

 
 
00:03 
Dom Hawes 
Welcome to Unicorny. This is a podcast about the business of marketing, how to create value, and how you can help your business win the future. And I'm your host, Dom Hawes. There's a book we've referred to in several episodes over the last six months. It's a book that explains and offers solutions to one of the biggest issues affecting sales and marketing effectiveness today. That book is the jolt effect, by Matt Dixon and Ted McKenna. It is the answer to this problem. You've got highly qualified leads that look like they fit your ideal customer profile with a very clearly defined need and with a compelling reason to buy. But the lead goes nowhere. Everything's rosy. Until it's not. And then, quicker than anything, it withers on the vine.  

 
00:53 
Dom Hawes 
If you're a regular listener, I hope you took our cue earlier, bought the book, and read it, because its methodology isn't invented. It's observed. Its premise is not retro engineered. It's extracted from giant call logs, analyzed to death, and then shaped by experts. These are real life lessons from real life companies like yours and mine. Today's guest is Matt Dixon. He is one of the world's acknowledged leaders in sales and customer experience, and he is the author or co author of four books, the Challenger sale, the Challenger customer, the effortless experience, and the jolt effect. Now, the challenger sale and the jolt effect in particular have been really big influences on me. They're the kind of book you read and then buy 15 copies of so you can give them to your colleagues. And today we're talking about the jolt effect.  

 
01:42 
Dom Hawes 
Nothing is more important, in my opinion, than is what in its pages. So whatever you're doing today, cancel it until you've listened to this episode. Well, okay, I said everything. But look, if you're getting married, you might want that to happen. It's your call. But just about everything else, I reckon, is less important than this. And here's why. If you're in b two b, sales and marketing, you've got a pipeline right now, today, this minute, that is suffering from the curse of the moment, the no decision sale outcome. No purchase order, no sale, no win. This was already a thing, pre pandemic, but now it's worse. Okay, I'm gonna go out on a limb again. If you're thinking, yeah, but why do I care? This is a sales issue, and you know I'm in marketing. Press pause. Unfollow this podcast and never come back.  

 
02:32 
Dom Hawes 
If the difference between sales and marketing matters, it only does so to people inside your company, because inside your customers, company, they see you as one team, and until you've brought them over the line with your sales colleagues, transitioned them into customer success, and marketed over the duration of their lifetime with your company, your work isn't done. So we're bringing you an episode about a sales fail, because there's a lot you can do about it. If you know what they know, spot the signs we're going to talk about today and act on them. You will create more value for your company. Then you're well on the way to getting your work done. Let's go and meet Matt. Hi Matt. Hopefully I've chased away the tourists and drive by artists in the intro today's show, because honestly, they don't deserve to hear this.  

 
03:19 
Dom Hawes 
If that is the case, we've now got an audience that is keen to hear everything you have to say. Before we get stuck into it, though, let me frame today's subject. When you publish the jolt effect, you identified, explained, and proposed a solution to something many of us were experiencing at the time but really couldn't explain. And I hinted at it in the intro. It's highly qualified leads. They look like they fit our ICP. They've got a clearly find need with a really compelling reason to buy. But those leads don't just go nowhere, they die. And the jolt effect provided, I think, some really good answers to that. And when were chatting before the show, you told me that for sales researchers like you, COVID was a once in a lifetime opportunity.  

 
04:00 
Dom Hawes 
You study sales interactions and highlight, then codify the behaviors, methods, and attitudes of the very best performing salespeople. I get that, but why did COVID help that process?  

 
04:10 
Matt Dixon 
So more of the sales interactions were taking place on Zoom and teams and other platforms like that. But in the blink of an eye, in the spring of 2020, we all went 100% virtual. So there were no more client visits, none of the critical conversations that were always out of view for researchers like ourselves. Now, they were all taking place on virtual platforms, which meant that they could actually be captured and recorded and then studied at scale. So while everyone else is learning to bake sourdough bread, we thought it would be a neat idea to go out and recruit bunch of customers into a study. So went out to several dozen companies. We asked them to send us all of their recorded sales calls tied to specific opportunities, and we ran the data collection effort over about 18 months.  

 
04:51 
Matt Dixon 
So we collected 2.5 million sales calls. We turned that audio into unstructured text and then used a machine learning platform, pre chat GPT unfortunately, because it was end up being pretty manual, that would have been a lot easier. When chat GPT came, I said, let's see how good this thing really is. I'm like, what causes customer indecision? It was actually a remarkably good answer. And I was like, what did I just spend the last two years of my life doing? Anyway, I digress. We collected all this data. We studied it at scale. We built a model that had 8300 variables, and were kind of pointing that model because there's lots of things you could ask of that data set.  

 
05:26 
Matt Dixon 
But the thing we're really interested in, which was the problem that you just articulated, why do deals, especially those deals that are well qualified, the customer says they want to buy from us. We're going through pilots and pocs and demos and so on and so forth. We're having consensus building meetings with the buying committee. We're going through the traps with legal and procurement, all the sales prevention departments, and then things kind of fall apart. And this happens to salespeople actually way more often than they would typically acknowledge. I think over the last two years, the percentage of those no decision losses has gone way up. When we wrote the book, we found that anywhere between 40 and 60% of a salesperson's qualified pipeline will ultimately be a loss to no decision.  

 
06:08 
Matt Dixon 
I'm talking to companies these days that are telling me, especially in the SaaS space, that's upwards of 70, 80% of their opportunities. That is a depressing finding, of course. But the good news is that high performers are not subjected to that, at least not to the extent that most salespeople are. They've actually figured out a way out of this. They kind of zig when everyone else zags, and they run kind of a different playbook to deal with those opportunities where customers get, if you will, cold feet. I will say, just to share a little bit more data here.  

 
06:38 
Matt Dixon 
The standard set of assumptions that people have, I think, in sales and marketing, is that a customer, especially the customer, who says, dom, you know, we're sold, we're in that magical moment in the sale where you can stop selling to me, we're sold, we're in. We love what you're talking about. We are convinced that what we're doing today is no good. We've got to move forward. When those customers start to go sideways on the salesperson, when they start to, if you will, relitigate objections that you thought you'd address long ago, they start dredging up concerns that you thought you'd put to rest. And it feels to the salesperson like the deal is slipping out of their fingers. The conventional wisdom is that is a customer still suffering from status quo bias. They're still content with what they're doing today.  

 
07:23 
Matt Dixon 
They believe what they're doing today is good enough, or what you're talking about is not a compelling enough reason to change, or maybe it's just not a top priority for me or my team or my organization. So they start to talk themselves out of it. It's code for human laziness, because change is hard. We know that in sales, what sales people tend to do in that situation is they. They dial up the fomo, the fear of missing out. So they say, well, dom, let me take you into the demo environment again and talk to you again about all the great reference customers we have and all the proof points. And they pull out all the stuff that marketing equips them with, right? The case studies, the proof points, the success stories, the ROI calculators, you name it.  

 
07:58 
Matt Dixon 
If that doesn't work, they kind of take the customer, try to take the customer to a dark place. They dial up the FuD, the fear, uncertainty, and doubt, make the customer squirm a bit, point out that they're losing ground to competitors, money flowing out of their business. They're exposed to risk that they didn't appreciate all these kinds of things, like turn up the heat a little bit on the customer. And when those two things don't work, the last ditch attempt is almost always the 10% discount. That's only good this quarter.  

 
08:21 
Dom Hawes 
We're closing the quarter. Exactly. Oh, yeah.  

 
08:23 
Matt Dixon 
Nobody wants to pay more later. You definitely rather get it even if you're on the fence. So you try to create that urgency. But those are all kind of fomo techniques. And it was with remarkable consistency that salespeople did that with that customer who starts to hesitate, late stage, they would go back to the status quo, try to put it to bed, and they would dial up the fomo. And the real surprise to us in all this, which taught us that we don't really understand what's going on here in the customer's mind, is that set of fomo tactics actually increases the odds that the deal will be lost to no decision.  

 
08:53 
Dom Hawes 
Wow.  

 
08:53 
Matt Dixon 
That was actually initially quite troubling to me, because in the Challenger sale, as you probably recall, we talk about how challengers are actually quite good at that, and they were able to show the customer the pain of same is worse than the pain of change and break the grip of the status quo. On the customer, which can be quite powerful. And that's one of the things challengers are very good at. And here we found that the people who are best at that, actually, perhaps our initial thought was, like, maybe that's not what they should be doing. So that was a little bit frightening, because we'd spent the past decade telling everyone to go out and do this, and now I was wondering what a global apology tour would feel like.  

 
09:25 
Matt Dixon 
The next thing you do is you accuse your data science team of having made a math error, and then they assured us they had not. Then we loaded more data into the model, and the effect actually got worse, not better. So I think at that point, we just said, hey, there's just something about this customer hesitation that we're not fully appreciating. There's something going on because this standard set of plays that salespeople are running are actually increasing the odds that you'll be lost to no decision. So that led us down this really interesting research path. But that's sort of what got us started on this whole journey.  

 
09:57 
Dom Hawes 
Mind boggling.  

 
09:57 
Matt Dixon 
I just sort of discredited everything we said in the Challenger sale, and it turns out that when we got into the. The call analysis that high performing salespeople are actually quite good at beating the customer status quo bias. I think it's a basic truth of sales, which is if you don't do that, you're never going to have an indecision problem because you won't get that far. Right. You first got to overcome indifference before you overcome indecision. Indecision only sets in once the customer's intellectually bought in that they're okay. I can leave my status quo behind. Now we're moving forward. But moving forward is actually quite scary, and that's where indecision starts to set in. And so the lesson for us, I think, was that salespeople really need to think about sales as a two act play, if you will.  

 
10:43 
Matt Dixon 
We've got to first overcome the customer's indifference, and the thing holding them back is their status quo bias. So you've got to answer the why change? Question. You got to show them that the pain of same is worse than the pain of change. You might even need to use some FOMo tactics to get them to move forward intellectually. Once they've decided to move forward, they start to obsess about all the things that could go wrong. That's the time to actually, figuratively, of course, put your arm around the customer and their shoulders and say, it's going to be okay and instill confidence. So they feel like they're making a great decision. They feel like they've done plenty of research, and they feel like you, as a provider, are committed to their success and you've got their back.  

 
11:18 
Dom Hawes 
I remember reading the first few pages and that kind of moment when the truth is revealed to you, and you understand why the things that should have worked didn't. Didn't. That's the experience I had when I started reading. And I think you identified a difference between procrastination and just simple decision avoidance, didn't you?  

 
11:33 
Matt Dixon 
Yeah. Yeah, that's right. These things can be hard to tell apart from one another, I think, in sales. But one of the things when we step back and we had this kind of like, oh, man, this is not what we expected to find, which almost ends up being a good thing, I think, in research, because it means the problem isn't fully understood and the existing literature or conventional wisdom isn't fully addressing it. So once we dusted ourselves off and we said, let's go back into the data and come at it from a different angle, which is to ask maybe a bigger question, which is, what leads people to make no decision at all.  

 
12:06 
Matt Dixon 
It turns out that salespeople, again, have long existed in this world where they think that every hesitant customer is a nail, and you've got your beat, the status quo hammer, and you just go town. Now, it turns out that preference for the status quo is actually a big driver of no decision losses. A 44% of the no decision losses were actually customers who were committed to their status quo. They were not convinced of the why change. They were indifferent towards the supplier solution, or they didn't think it was a top big priority. They were content, or they thought what they were doing today was good enough. But that was only 44%, 56% of the time.  

 
12:43 
Matt Dixon 
So the bigger of the two reasons which it was a reason that no salesperson, at least none that we'd ever encountered, fully appreciated, or even knew was out there, was customer indecision, which itself stems from the customer's fear of failure. I remember when the book first came out, we had a lot of people asking us, well, isn't a no decision loss a decision? The customer's deciding to stay with the status quo. And the answer is, that is true. 44% of the time, 56% of those no decision losses are with customers who actually do want to buy your solution, but they can't, because they're afraid of what might go wrong. This is confounding. I think to salespeople, especially salespeople who sell to senior folks like your listeners. So they sell to sales or marketing leaders or experienced executives and managers.  

 
13:29 
Matt Dixon 
And I think when they hear that, it's a bit of a head scratcher, because they think immediately, well, these are people who get paid lots of money to make really big decisions, and they get paid to not be afraid. So what's going on? And it turns out that there's a set of even more powerful human biases at work. Even more powerful than our or inertia or laziness or propensity to default to the status quo is something known as the omission bias. And just in simple terms, I'll spare your listeners what went through, which is reading 30 years of dutch psychology journals. What the omission bias holds is that we as human beings, think of loss in two different dimensions. On the one hand, we've got what are called errors of omission. This is when you experience a loss because you decided not to act.  

 
14:12 
Matt Dixon 
You did nothing. You sat on the sidelines, and something bad happened. So you could think about missed investment opportunities, just for instance, or not going to a concert or going to see a football match or something like that, and you missed out. And it could have been a great experience because you decided to stay home. On the other hand are what psychologists call errors of commission. An error of commission is when you experience a loss that is directly tied to an action or decision you took. So it is a loss for which you are personally responsible. So same kind of thing, error of omission. Perhaps you missed out on a great investment opportunity and you didn't capitalize on that gain. But imagine if you made that investment and it actually went sideways on you.  

 
14:52 
Dom Hawes 
And you only get fired for one of these, right?  

 
14:54 
Matt Dixon 
You only get fired for one. It's funny, because in companies, nobody gets fired for perpetuating the status quo. Like people love kicking the can down the road, but people do get fired when they try to change it. And what it tells us is that level of personal responsibility gets in our way. And, in fact, even if the losses are exactly the same, people are much more okay with losses for which they are innocent bystanders versus losses for which they are personally to blame. And this plays out big time when it comes to sales. The shorthand for salespeople, we talked about this when were getting ready to hit record here. But the shorthand for salespeople that is catchy is, look, the FOMO can be very powerful to get the customer off the fence to overcome their indifference.  

 
15:39 
Matt Dixon 
But you've got to understand that in their minds, the FOMO, the fear of missing out, actually matters less than the FOMU. The fomu is the fear of messing up. The fear of messing up in errors of commission are much more powerful human bias that almost all of us suffer from. And what's really vexing for salespeople is that their buyers, especially senior level buyers, they won't talk about this stuff. Like no buyer is going to say, you know what? I got to, I gotta tell you, Dom, I really struggle to make decisions. Don't tell my team or my boss that, but, boy, I go to a restaurant with my friends, and I tell the person to come back, and then I want to order last, and then I hem and haw, and then I tell them to go away again. And then I get what?  

 
16:19 
Matt Dixon 
I make an order, and I don't like what I ordered, and I look longingly at everyone else's dish, so nobody cops to that. And especially the higher you go up in an organization, the more decisive they come off. Right. But deep down, they're very worried about putting their name on a decision. Even if they know it makes perfect rational sense. It's going to make them, their teams, their organization, better off, their customers, better off. People really get worried about putting their name on a decision. And if it doesn't go well, they are the ones to be blamed for that. In this current environment, that's actually not just a bad look, it can get you fired.  

 
16:55 
Dom Hawes 
The current economic environment must make that even worse. It does show me, a senior executive, that at some stage hasn't made a decision or bought something that hasn't worked, particularly B. Two B SaaS. It's interesting seeing your statistics, like, really easy to adopt, really easy to onboard, very difficult to actually get adopted by the teams. And, you know, my own experience, and I have to hold my hand up to this, is that with a well known CRM package, we spent a lot of money trying to get people to use it, and it didn't work. And so now when I get very good salespeople pitching me, and I'm an absolute archetype, I know we need a solution, I know we need something.  

 
17:36 
Dom Hawes 
But I'm not prepared to change my status quo yet, because the downside of getting it wrong is just too big, actually, not just personally, but financially, too. We can use that money so many other ways.  

 
17:47 
Matt Dixon 
You're hitting on something really important. You also mentioned before, that idea of distinguishing between is this customer just procrastinating which unfortunately, everybody does. Are they actually avoiding the decision altogether? And they have no intent to actually make that decision. One of the things we talk about in the book is really that indecision is actually a multi layered thing. You've got personality at work. So again, we all know friends or family or coworkers who are indecisive, and then we know others who are actually quite decisive. And there are different things like that. And so you've got, some people are maximizers, others are satisficers. They're okay with. They can prioritize what's most important. Other people are never content unless the decision they're about to make rings the bell on every single dimension of the decision. Some people are decision avoiders, other people are procrastinators.  

 
18:35 
Matt Dixon 
And so you got to understand your customer and who they are as a person. Then you've got to really understand, what is it about this decision that they're really worried about? And actually, we found in the research, customers get worried about a lot of things when it comes to big decisions, but there are three in particular they get really worried about. One is, even if I know I want to work with this vendor, have I configured the proposal in the solution in the right way? So, have I chosen the right contract length? Have I chosen the right way to deploy it, the right level of support from the vendor, or how much we're going to do ourselves, DIY, etcetera? Have I chosen the right integrations, the right bells and whistles? I mean, there's so many decisions.  

 
19:11 
Matt Dixon 
Even after you decide, I want to work with this company like that CRM vendor, there's still a thousand decisions to make. And when everything looks great, the safest course of action is, don't choose anything right. Just wait. Somebody let somebody else make that call. The second thing they get worried about around decisions is, have I done enough research? Have I left no stone unturned? Or are we going to discover something after I make this decision and sign the agreement that's going to make me look like a fool because I didn't do my homework? And then the third thing is, expectations overload. So are we actually going to get what we're paying for? You're promising this kind of return on investment. Are we actually going to see that?  

 
19:45 
Matt Dixon 
Or are people going to point fingers in my direction saying, well, you said it was going to be a five x improvement in sales productivity, and we only saw three x. And so what happened again? What is it about this decision? And then beyond that, even after we sort those things out. There are contextual things at work. You mentioned a big one, which is the baggage we bring to the decision from prior decisions that didn't go well. So everything you're saying may be wonderful, it may be perfectly right answer for our company, but because we had this bad experience with your predecessor, we got burned and we waste a lot of money in this other CRM platform.  

 
20:18 
Matt Dixon 
Now I'm bringing that baggage to this decision, even though you personally had nothing to do with that, you've got to help me cope with that and manage through it. There are other things, like economic situations or what's going on in the company. Did we just do a rif? You just go through an m and a event. Are we losing market share? Is there more budget scrutiny now than there was before, even? Is the decision large? Or is it an exploding offer, if you will? We all think in sales that urgency or time pressure actually makes people move forward. But actually, in many respects, it makes them more indecisive, whether that's you as a salesperson saying, hey, we're closing our quarter and you can get this discount now, but I can't extend it to you later. That puts pressure on the customer.  

 
21:00 
Matt Dixon 
But oftentimes the customer puts pressure on themselves because I've got to use this budget or I lose it or my boss is looking at me to get this rolling. If we don't get it rolling now, I'm not going to hit my objectives, I'm not going to get paid my bonus, I might get fired. These kinds of contextual factors can amplify indecision, even normally decisive people. So again, it is a multi layered.  

 
21:22 
Dom Hawes 
Kind of phenomenon, an enormously complex as well, because I don't have any evidence to back this up, and I probably shouldn't say it to a researcher who has loads of evidence to back everything up. I just instinctively bet that the baggage people carry crosses categories as well.  

 
21:38 
Matt Dixon 
Oh, yes.  

 
21:38 
Dom Hawes 
It's not CRM to CRM.  

 
21:40 
Matt Dixon 
No.  

 
21:40 
Dom Hawes 
So if you're selling me a SaaS service at the moment because I've been bitten by sass, I'm worried about that. So it doesn't even matter. It could be, I don't know, NHR system. My concerns are the same because it looks and it feels the same, even though it's a totally different use case.  

 
21:57 
Matt Dixon 
It's funny because it makes the customer even less apt to bring it up because it's so disconnected from this decision. You know what? I'm not going to make a decision on the CRM because I didn't like the movie I chose to watch right now with my family. Stuff happens, then it happens.  

 
22:12 
Dom Hawes 
One of the interesting things about reading the book was I went into it thinking, I'm a pretty decisive guy, and you run through a few scenarios in the book of, you know, this is what indecision looks like, and I am the guy that has to read the whole menu. I am terrible at making decisions. I'm really bad at it.  

 
22:28 
Matt Dixon 
We didn't write the book to make you feel bad about yourself. We're all like, we all struggle for this stuff.  

 
22:33 
Dom Hawes 
I know, I know, but it's a useful realization to make, because if you think you're good at making decisions, but you're not, then you look in Congress, to everyone around you just look a bit like an idiot. At least now I can get people around me who can help me make decisions.  

 
22:46 
Matt Dixon 
It is interesting, though, if you were to ask 100 customers if they were decisive, especially we're talking about senior buyers, 100% of them would say yes. All hundred would raise their hand and say, absolutely. They think of themselves as decisive people. The data tells a very different story. We found that only 13% of customers actually are decisive. These are people who are unencumbered by any fear of failure, bring no baggage decision. Very rational, kind of. There's no emotion in these conversations. My guidance to salespeople has often been, if you find one of those people, you should sell them everything immediately, because. But you're just not going to find very many of those. So 87% of the market is either moderately or deeply indecisive. And so it's, you can't hit your numbers just selling to the decisive folks.  

 
23:31 
Matt Dixon 
Unfortunately, you've got to obviously understand and disqualify those who are deeply indecisive. But you also have to have a set of techniques to deal with the vast majority of people who struggle with some form of indecision, which is perfectly normal.  

 
23:50 
Dom Hawes 
In part two of today's show, which is available right now, by the way, on this very platform. You're going to hear Matt talk through the jolt mnemonic. And as he does, it's worth thinking about how you might help your colleagues it in sales, get around the fumu that is killing your pipeline. You know, it's interesting, as I just said now to Matt, we've seen it too, in spades. And the conversation normally goes like this. Hello.  

 
24:16 
Matt Dixon 
Hi.  

 
24:16 
Speaker 3 
Is that Dom?  

 
24:17 
Dom Hawes 
It most certainly is, John. How are you? How can I help?  

 
24:20 
Speaker 3 
Well, I'm afraid I've got some bad news. We're committed to the campaign, but we're just not sure the timing is quite right. Were missing a little stakeholder support internally, and while the budget is set aside and sanctioned, I'm just not sure I want to risk spending it now. So, no, we're just going to let things slip by a quarter, and the.  

 
24:39 
Dom Hawes 
Next quarter never appears. Many marketers will find this familiar. FOMO is the great delayer for our customers. For your customers too. And delays are like business exocets, especially in service businesses. They pierce the deck and blow a hole in your margin. Product companies too often have service wrapped around the whole product, so it can be just as damaging there. Now here's the thing. You know it, I know it, but our colleagues might not. So we need to tell them this now. And if it's easier, please share this pod with them and they can hear it straight from the unicorny's mouth. Marketing's role extends far beyond advertising and promotion. Marketing can directly influence sales outcomes by addressing the psychological barriers to decision making. By providing educational content, personalized experience, social proof, and consultative support, materials marketing can dial down fomu.  

 
25:37 
Dom Hawes 
It can build trust and guide prospects towards making a better decision faster. This is a joined up approach where marketing and sales are deeply interconnected, working together to address customer indecision, not just at the surface level, but by understanding and tackling the underlying fears and biases. The insight here is that overcoming sales delays or stalls or deaths due to no decision requires a blend of emotional intelligence, super smart personalization, and a consultative mindset, all supported by consistent and clear communications. Now this approach makes the need for detailed customer journey planning and reviews very clear because each touch point is an opportunity to address concerns, build confidence and guide towards a decision. And in your colleagues eyes, this transforms marketing from a megaphone into a bridge that leads prospects from hesitation to action.  

 
26:42 
Dom Hawes 
We're going to end part one of today's episode here, but before we go, here is some food for thought. How can you work with your sales team to build anti FOMO and antifo Moo mindsets into your targeting? How would you identify someone who's going to stall or kill your sale process? Because they're afraid of messing up. And that is fomu fear of messing up. That's your homework for today. See you in part two, which is available right now. And in part two, we are going to dig into the jolt effect itself. You've been listening to Unicorny and I am your host, Dom Hawes. Nicola Fairleigh is the series producer. Laura Taylor McAllister is the production assistant. Pete Allen is the editor. Unicorny is a Selby Anderson production.