All sales managers fear month-end as they agonize about delivering on their forecasted revenue number. This is a legitimate fear as CSO Insights found that only 48% of forecasted deals actually close. That’s worse than a coin flip for every opportunity in your ‘forecasted’ pipeline. Now that is some pretty scary stuff.
How can we shed some light on this problem and improve the situation? Forecasting is a combination of a couple of different factors. First, sales managers take into account the history of their sales organization, their sales process, the speed of their sales cycle and the reliability of their reps. Second, they try to understand the motivation and the transparency of the prospect. The first input should be within the sales organization’s ability to control. The second factor, however, is not, and that can be very scary. It’s hard to read prospects. Some prospects are intentionally mysterious and difficult to nail down. A mature sales organization, with solid processes in place and reliable sales reps, is more likely to tackle these challenges and achieve much higher close rates on their forecasted deals.
The fundamental goal of improving forecasted close rates is to do a better job of understanding the buyer and their buying process. Wishful thinking is not a good sales strategy. Here are some best practices that all sales manager can instill in their team to get better information from prospects and improve the odds of making the forecast .
Digital body language can speak volumes.
A large percentage of business is now done at a distance. It’s getting less frequent that we are in the same room with our customer and can have a handshake and look in their eyes at the end of the meeting. Body language can tell us a lot about what a customer is really thinking and experienced sales professionals develop instincts that guide them. In a world of email and conference calls, we need something similar that will give us insights into what a buyer is really thinking.
One of the solutions to the challenge is to track the content that you share with your customers. From emails, to presentations, to proposals, track all of it. By doing this you will get valuable insight into what your customers do with your content and that tells you how serious they are about your product or service. For example, if you are sharing content with a buyer and they are not looking at it, that is not a good sign. Worse yet if you get to the proposal stage and they don’t open your proposal, you want to be very careful about how you forecast that deal. If the signs aren’t good, you need to proactively get involved to find out what is going on. The good news? There are many scenarios where content tracking will give you valuable information that you can use to better assess the health of a deal.
Are you high enough?
A classic mistake that many sales professionals make is they don’t get to the actual decision maker. They are left working with a proxy that often has little authority and sometimes not enough insights into the priorities of their organization. This has become especially true in the modern world of inbound marketing. The people that are downloading your white papers or trying your software are not likely to be the people writing the check. Sellers are often more careful to target senior people on their outbound efforts but get stuck with the wrong people on the inbound leads.
The solution to this problem is to ask about their buying process. The goal is to get the required information without potentially insulting or annoying your contact. That can be achieved by asking about how they typically buy a solution like yours. How do they evaluate? How many people are involved? How do they typically make a decision. The answers you need will typically fall out of those questions. Now, armed with that information you can approach all of the necessary decision makers and learn about their priorities and how they think about your solution. This will get you much further down the road to closing a successful deal.
Try to close before you close.
A very useful approach to testing how likely a deal is to close is to perform what some people call a trial close. The basic pattern is to layout the entire deal and then ask the customer if they would be willing to close based on those terms. It needs to be as direct as ‘would you be willing to sign today?’ This approach is an effective way to surface objections that might be below the surface. It can even surface things like they aren’t the decision maker. Once you have the objections you are in a much better place to work on addressing them and then reassessing the probably of this buyer actually converting to a paying customer.
You are a risk.
Sales professionals sometimes get so wrapped up in closing the deal, they don’t really consider the position of the buyer. In most cases the buyer is taking on more risk in a business relationship than the seller. If the seller fails to close a deal it is unfortunate but that is the nature of sales. If a buyer decides to buy but it’s a bad product or service they have a pretty serious problem. The seller represents a risk to the buyer and one way to deal with a risk is don’t take it.
Your goal then is to reduce the risk for your buyer. That means you will be around to support them even after the deal is done. You have some skin in the game as well and you want a happy customer that will provide referrals.
All of these factors contribute to getting a better understanding of your buyer and their likelihood to close a deal with you. Take the initiative and don’t allow your forecasting nightmare to become a reality. What tricks do you use to gain more transparency with your buyer and tip the odds of closing in your favor?About the Author
Conrad Bayer is the Chief Executive Officer of Tellwise, an integrated customer communication platform that improves seller productivity, highlights pipeline insights, and provides a greater customer experience. Conrad has almost 20 years of experience in startup and established enterprise software companies. When his company was acquired by Microsoft in 2005, he led several large engineering teams for Microsoft, including most recently the Active Directory team. As an experienced entrepreneur and software engineering leader, Conrad is focused on leading-edge design and solving difficult problems leading to new markets. He is a frequent speaker on topics including cross-company collaboration, responsive design, mobile workforce enablement and software privacy/identity.