How do you tell if a customer is really going to buy your product?
I was discussing Go to Market (GTM) questions with a startup and was asked:
The customer sounds really excited and interested in our product. What should we do next? Should we charge upfront fees to drive urgency? Or get them to sign something?
There’s a couple of ways that you can tell a customer is truly interested and to drive them to a decision. In this post I will:
- Explain sales foundations (CHAMP)
- Deep dive “P — Priority”
- Propose solutions to drive Priority
Foundation: Understanding sales qualification via CHAMP
Before I dive into how to figure out a customers’ true interest, I’ll cover a foundational framework called CHAMP. I did not create this helpful framework, but learned it while in sales. CHAMP refers to
- Challenge — What painpoints are your customer facing?
- Authority — Does the person have the authority to make the decision to buy your product?
- Money — Does the buyer have budget for this? How much is this budget?
- Priority — Is integrating and using your product a priority for them?
All aspects are important, but “Priority” will help you understand whether the customer is actually going to buy your product.
Deep diving “P” in CHAMP: Priority
Why it is hard to figure out priority
- It’s easier for the potential customer to say your product is interesting and not commit to further next steps. “Interesting” costs nothing for them to say — talk is cheap.
- It’s hard for people to say an outright NO. Though the extent of this depends on culture — it seems universal that people rather avoid a firm no.
- It’s hard to be specific about timelines. Sometimes folks might be unsure about when they want to make a decision, or are dependent on other teams for that decision, and so they can’t commit to that timeline.
Why it matters that you’re a priority
Time is money.
- If you’re pre product, you cannot afford to waste time on a customer that does not buy. Imagine investing time in the deal, or custom work and then the customer doesn’t go ahead. That’s costly.
- If you already have a product that’s gaining traction, you want to know where you land in your buyer’s prioritization, so that you can balance it with other customers, and have a rough timeline on when customer revenue starts flowing in.
How to test if you’re a priority
Timeline, timeline, timeline. Ask about when the client/merchant will integrate your APIs / use your software. Questions like:
- When are you going to integrate? When do you want to go live? Why is this the specific date? Try to get a sense of what’s “driving” the prioritization of this integration.
- Where the next step to get to the decision? What and who are some dependencies? How long has the decision and integration process taken place for previous partners?
How to respond based on different scenarios
- If timelines are firm: You can work backwards and figure out the next steps together to get the deal to a close in time for those timelines.
- If the timeline is firm but the range seems broad (e.g., 6 months): Ask why, ask for what the steps are to narrow this timeline. There must be a timeline somewhere — either budget to be spent, or a launch that needs to be completed by certain dates.
- If there are no timelines, it’s not a good sign. You might not be a priority and the customer might be too polite to say No. Address it quickly. A suggestion — ask the same question again and in multiple ways. Sometimes customers are ambiguous because the launch is confidential. That’s OK, but you should pressure test that the reason they are not telling you is because it’s confidential, or because they have no intention to buy.
It may be gratifying to hear that a customer thinks your product is great. However, it costs nothing for them to say that. Nice words aren’t closed deals that lead to revenue. Even if a customer pays an upfront fee, it doesn’t mean they will use the product. Talk is cheap. Instead, ask about timelines for decisions, integrations, launches, and you’ll get a better sense of whether you will be able to close the deal.