Megadeals (Book Summary)

Megadeals by Christopher Engman and Johan Aberg

Introduction

• Pursuing a megadeal is not a process of qualifying leads so much as disqualifying them.

PART I Megadeal Cornerstones

CHAPTER 1: Key Initiatives

• Many sales organizations fail to understand the importance of key initiatives, and deals are lost because of the lack of understanding of how this works internally in the buying organization.
• The pursuit of a megadeal should start with disqualification rather than qualification.
• Key initiatives are often cross-functional and focus on the major drivers in large businesses, such as:
  • Growth
  • Profitability
  • Quality
  • Sustainability
  • Innovation
  • People
• Some organizations’ key initiatives are easier to identify than others. Many listed companies have their key initiatives clearly described in their annual reports, mentioned in quarterly reports, and sometimes even referenced in press releases.
• When CEOs or other high-profile leaders are interviewed, key initiatives are often mentioned – not least because they are top of mind for those individuals.
• Sometimes an entire industry can share a specific key initiative. Often, this will be due to compliance, such as new laws and regulations (emissions levels, chip and pin, etc.), but it could also be related to a new technical trend (as a service vs. on-premise, smartphones overtaking traditional mobile phones, 5G, etc.).
• Most megadeals involve dependencies on many organizations beyond the buying organization. We call this the megadeal ecosystem. It might include local, state or international authorities, related suppliers and distributors, interfacing systems, local communities, customers, consultants, etc.

CHAPTER 2: Ecosystems and Ecosystem Architects

• A mega deal typically includes more than 100 stakeholders both inside the target organization and in the surrounding ecosystem.
• As megadealer Walt Parmer told us, “It’s not just about finding the ‘pro’ stakeholders, you have to identify the ‘cons’ as well. Too many people are trying to identify the champions and the check-writers and not paying attention to who might have a vested interest in blocking the deal.”

CHAPTER 3: Consensus

• “Big deals are 30% technical and 70% political.
• Leaders in the democratic world need the support of the crowd before and after a decision, whereas countries with weak democracies tend to see more top-down decision-making.
• Because a megadeal creates major change in the buying organization, it often requires that you sell in the change, and that you sell it at scale (i.e., consensus-wide).
• Consensus is a function of three key decision psychographics: awareness, confidence and trust.
• Almost all megadealers talk a lot about the need for internal consensus within their own companies.
• Keep parallel discussions alive and keep them apart as long as you can. It is often unclear who is the real lead in an initiative. Don’t encourage the client to get many people in the room at the same time. Even if it might seem advantageous to connect people who are not normally close to each other (from different countries, different departments, etc.), doing this too early on is likely to backfire.
• Before group meetings, do precalls with the individuals to make sure you have handled their potential objections before the meeting and have understood their objectives and perspectives. If you can align the individuals’ goals with your own, you have a great advantage.

Chapter 4: Trojan horses

• Identifying a Trojan horse: [JD note: aka, a “coach” or a NINA = no influence, no authority]
  • A Trojan horse is one or several people inside the buying organization that are “pro” you. They want you to win.
  • They won’t usually express their support for you openly, but can make a major difference behind the scenes.
  • Trojan horses work as your GPS – the ongoing navigation that helps you understand what is going on. Where are you winning? Where are you losing?
  • These individuals often share inside information with you because they believe that doing so is in the best interests of their organization.
• A Trojan horse should not be mistaken for a champion. A champion is typically a person of higher rank, or at least the power and influence to openly fight on your behalf. In order for somebody to be a champion, they need to have both influence (in order to persuade others to take action) and “authority” to either make the decision or to get someone with budgetary oversight to make the decision. In contrast, a Trojan horse often does not have power, and often has little control over decisions or the ability to drive change. It could be a technician, a personal assistant, or a lower-level manager.
• In a megadeal, you will need many champions, but you also need as many Trojan horses as you can find.
• When making research calls, you will come across people who tell you much more than you asked for and who express a strong will to change the area your offering addresses. A few of these individuals can be nurtured into Trojan horses.
• Large organizations will almost always choose Alternative A since the risk is so much lower, even though the potential ROI is much less than with Alter native B and the price tag significantly higher.

CHAPTER 5: Risk Mitigation

• Risk management involves identifying, evaluating, and prioritizing risks in order to minimize, monitor, and control those risks that might materialize as real problems.
• If you don’t speak about risks in the open with your client, you can guarantee they will speak about it without you present.
• You can also split risk mitigation into four steps:
  • 1. Risk mitigation identification is the process of identifying real and perceived risks first with your own colleagues and later with the client. Many companies who are great at making megadeals have done very solid work around this.
  • 2. Risk mitigation planning is the process of developing options and actions to enhance opportunities and reduce threats to the project’s objectives.
  • 3. Risk mitigation implementation is the process of executing risk mitigation actions.
  • 4. Risk mitigation progress monitoring includes tracking identified risks, identifying new risks, and evaluating the effectiveness of the risk process throughout the sales project, implementation and on an ongoing basis thereafter.
• One of the most important risks that megadealers must work to address in the deal-making process is related to trust.
• Put yourself in the shoes of your potential buyer and ask yourself these questions to gauge their level of trust in you, your company and your offering:
  • Capability: Does this vendor and the allocated team have what it takes to deliver on their promises?
  • Vision: Does this vendor have a strong vision of the future?
  • Honesty: Can I trust that this company/team is telling the truth, and that when things don’t go well they will solve it?
  • Consistency: Does the vendor/team have the capability and honesty to deliver the same results over a long period of time?

PART II Tools and Capabilities

• Let’s repeat the five cornerstones in the Megadeals framework:
  • 1. Key initiatives:
  • 2. Ecosystem:
  • 3. Consensus:
  • 4. Trojan horses:
  • 5. Risk mitigation:

Chapter 6: Dialogue Techniques

• The main components of dialogue techniques often include some variation of these five:
  • 1. Analyzing, discovering and growing needs
  • 2. Connecting and building trust with different personality types
  • 3. Challenging and shifting beliefs
  • 4. Finding or creating compelling events
  • 5. Identifying and developing champions, sponsors and/or mobilizers
• As Matthew Dixon and Brent Adamson stated in their book, executives no longer tolerate situation and problem-oriented questions such as, “What keeps you up at night?” You should know the answers to these sorts of questions long before you enter meetings at that level
• Trust is a part of every methodology – building trust and managing risk, the enemy of trust.
• Compelling events can be global, regional, industrial or only affect one company. Changes in laws or regulations can be strong triggers. Here are some other examples:
  • 1. New legislation
  • 2. Ending fiscal year
  • 3. Increased prices
  • 4. Current issue the client has that needs to be solved by a certain date
  • 5. Delays in a project as a consequence if x is delayed
  • 6. Seasonal factors such as Christmas shopping
  • 7. Fulfilling a promise that was made to a boss or to the markets by a certain date
• Sponsor/champion: A sponsor or a champion is the person who helps you with internal selling, supplies information, and helps you get access to decision makers or a “Power Sponsor,” as the role is called in the Solution Selling methodology.
• Mobilizer: In the book The Challenger Customer, the authors differentiate sponsors from mobilizers. The mobilizers are the people who will help build consensus by “rallying the troops.”

Chapter 7: Messaging Architecture

• Fundamental messaging
  • 1. What are the change drivers? (In the example above, they were “low or no growth” and the related key initiative was: “Growth” or “Ramp-up”).
  • 2. Why this category of solutions? (Why should company X solve their growth problem with a CRM system and not sales training, better segmentation, new sales methods, adding salespeople, etc.?)
  • 3. Why this subcategory? (Why a cloud-based CRM, or why attributes x, y, z?)
  • 4. Why this vendor? (Now they are ready to hear the answer to “why you?” because you understand their problem, fit into their category of solution, and match the subcategory and their requirements.)
• By distancing yourself from the competition on the subcategory level, you are making the decision easier for the buyer: they move straight to “Why you?” because no one else is in your subcategory.
• We recommend that you first communicate your company values and then address benefits and features. Values are so important in megadeals that they can be what differentiates you on the subcategory level.
• You should craft messaging that develops trust in:
  • A. Your category
  • B. Your subcategory
  • C. Your company
  • D. Your offering
  • E. Your people
• Remember, a risk is anything that can happen that should not happen, or something that did not happen that should have happened.
• For a second, let’s imagine that you’re not interested in megadeals, but that you are a C-level executive. We might create a video, article, webinar or seminar themed “The five major pitfalls for growth for the Fortune 1000 until 2020.” In the communication piece, one of the pitfalls would be the risk of getting stuck in transactional selling.

Chapter 8: Enterprise Social Selling

• Use social selling to:
  • 1. Create a map of the stakeholders and decision makers (the deal ecosystem from Chapter 2) at the companies you are going after.
  • 2. Build awareness, confidence and trust at scale towards your stake holders, influencers and decision makers.
  • 3. Establish initial contact and get appointments with the right stake holders and decision makers.
• We currently recommend two or three LinkedIn posts per week. Focus on increasing the quality and the interactions in the comments in the posts rather than on posting a lot of content.

Chapter 9: ACCOUNT-BASED MARKETING

• In megadeals, ABM helps you show how your offer fits with a key initiative, build consensus in the buying organization and in the surrounding ecosystem, and reduce the perceived risk around a potential deal.
• The six key areas of account-based marketing
  • 1. Account prioritization
  • 2. Goals for account-based marketing
  • 3. Deciding on approaches/channels
  • 4. Messaging architecture
  • 5. Sales and marketing alignment
  • 6. Measurements, follow-up and improvements
• Direct mail is a great lead tool for targeting smaller groups of people. The methods above are oriented to reach fewer than 500 people in total due to the amount of manual work involved.
• Key stakeholders high up in major organizations tend to respond badly to semi-automatic mass emails that are poorly tailored to them personally. If you have 30 key stakeholders, please use personal communication with them.
• It is unlikely that a megadeal involves only one major deal. Instead, it consists of a combination of large contracts, service agreements, smaller orders, orders for other markets, etc.
• Selectively use outdoor advertising

PART III MEGADEAL COMPLEXITIES

• The seven different types of complexities that we identified in our research are:
  • 1. Political/regulatory complexity (this is country/region and industry-specific)
  • 2. Cultural complexity (this is country/region-specific)
  • 3. Complexity of the buying organization (covered partly in the chap ters about ecosystem, consensus creation)
  • 4. Application complexity (application-specific)
  • 5. Financial complexity (Chapter 10)
  • 6. Contractual complexity (Chapter 11)
  • 7. Delivery complexity (application-specific)
• Financing is also a tool for mitigating your client’s risk.

Chapter 10: Megadeal Financing (Contributor: Alexander Helling)

• Three ways megadeals are most frequently financed. They are:
  • Supplier’s credit: In a supplier’s credit structure, the seller offers X months of credit time to the buyer.
  • Buyer’s credit: A buyer’s credit is basically a loan from a local or international bank to your customer for the purchase of your products or services with a lower capital cost than the customer is able to get from a “regular” lender.
  • Project finance
    • Project finance is very similar to a buyer’s credit solution. The big difference is that the buyer is usually an SPV (Special Purpose Vehicle), i.e., a new company set up only for this project. This usually means that the SPV doesn’t have a balance sheet, has no assets, and no history or management in place.
    • In a project finance setup you will (if it’s not a governmental deal) need to add equity; usually around 25-40%. This equity could be supplied by you or other investors that you or an investment bank bring into the transaction

Chapter 11: Contracting (Contributors: David Frydlinger and Kate Vitasek)

• The ten most frequently negotiated terms in 2018 were:
  • 1. Limitation of liability
  • 2. Indemnification
  • 3. Price/charge/price changes
  • 4. Termination
  • 5. Scope and goals/specifications
  • 6. Warranty
  • 7. Performance/guarantees/undertakings
  • 8. Payment
  • 9. Data protection/security/cyber security
  • 10. Liquidated damages