The cost of selling to the wrong customer

In 2017, I received a sales call from a company offering payroll and HR software.

I was running a product company with an 18-person mobile apps team. Two of our apps had been featured in Apple's New & Noteworthy. The business had strong revenue for its size.

We employed one full-time HR person. Most administrative tasks were outsourced. Her most important work was taking care of people and coordinating the outsourced work. The records that remained could be prepared in spreadsheets in less than an hour.

The price of the software did not matter much. Its value did.

Buying it would not have removed the need for the HR person. It would not have materially reduced her workload. It would have added software to a process that was already simple enough for the size and shape of the company.

I explained this to the salesperson. She responded by spending more time explaining why HR software was a better choice.

It was not.

I had built the damn business. I understood its economics and internal mechanics. I was not resisting software because I needed more education. I was telling her that I was not the right target customer.

That should have changed the conversation.

She could have stopped selling and become curious about the business. She could have kept the relationship alive. I knew other companies, and future situations might have created work for them. A good conversation could have produced opportunities beyond the product she was trying to close that day.

Instead, the sale continued after the reason for saying no was already clear. They lost the sale, which was probably unavoidable. They also lost the possibility of a useful business relationship, which was not.

Sales teams are often trained to treat resistance as an objection to overcome. Sometimes it is evidence that the prospect understands the situation better than the salesperson does. Sometimes the correct sales decision is to qualify the prospect out.

A poor-fit prospect is not a failed customer. The failure begins when the seller refuses to recognize the fit and spends the relationship trying to win an unsuitable deal.