Seth Godin wrote today about how to live to fight another day. While our default is to question our customer's decision-making when the deal doesn't go our way, he argues that losing with grace gives you more chances to be invited back to the table. I agree.
So why is this not typical behavior? Simple - we are what we measure. Very few salespeople or sales organizations are measured on sustained performance (where "sustained" spans more than a quarter or a fiscal year). Therefore the sales team and each salesperson is goaled specifically on winning every deal, closing every opportunity, etc. Lifetime value means less than deal value.
I worked at IBM Canada in the early 90s. At a sales training class, the instructor argued that success is most dependent on the relationship you have with the customer. The measure of a great relationship is when your customer calls to tell you that he tried his best, but had to buy the competitor's product. However, he hopes that this doesn't tarnish your relationship in anyway! Wow!
This is one very clear reason for why IBM has been so consistently successful - they care so much about their customers, that their customers care just as much about them.
A purely commission-based sales force loses when they leave any money on the table. This is why they behave this way. You are what you measure.
So how does an organization measure sustained success?
What if we made commissions the smallest part of the compensation package? What if the accelerators were based on the customers' success, our sustained performance over time, and customer satisfaction?
A very simplistic formula might look like this:
Compensation = [total revenue X 2% (sample base commission rate)] X [1 + customer's year-on-year revenue growth percentage] X [average attainment over the last three years from this account] X [three-year average customer satisfaction index]
Say the deal was worth $1mm, the customers' business had grown by 105%, the sales team had achieved 97%, 103% & 105% of quota the last three years, and their sat index was 90, 98 & 97%.
$20,000 turned into just over $40,000 based on the customer's success, sustained sales performance, and customer satisfaction.
Now imagine how the customer's view of the salesperson might change if they knew that commissions were based in large part on the customer's overall business success? Imagine how the salesperson's point of view would change?? The sales company benefits because their customers' loyalty will grow, which will result in lower costs of sales, higher margins, and more predictable revenues over time.
You are what you measure.