Tag Archives: Forecasting

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Forecasting Accuracy: How to Clear the Fog

In the 1966 film Blow-Up, a London fashion photographer named Thomas unknowingly documents a murder. At first, Thomas doesn’t notice the crime hidden in his photograph. The blurred background accentuated by shadows and foliage make the scene invisible. After he repeatedly blows up the image, zooming in over and over again on what seems to be a minor feature, is the disturbing truth revealed: a terrible crime has been committed and the photograph has made Thomas a witness. The most important thing in the photo had been concealed in the background all along.

I mention this movie because it reminds me of forecasting. Many times the reason for buying or not buying a solution are in plain site, but hidden by the shadows of other priorities. 

One of my client companies sells software to aid in the development of software. They had asked me to analyze a set of loss and no decision outcomes to understand if there were any trends they could get an upper hand on. I first interviewed the sales teams, then I reached out to the buyers for each opportunity. In one particular case, the sales person classified the no decision outcome as a lack of budget. When I talked to the buyer, he told me that the company was growing so fast, and hiring so quickly, they ran out of parking space. It turns out the CEO redirected any excess funds to build a parking garage, pushing many other purchases on to the back burner for sponsor and seller alike.

In this case, the hidden “crime” was actually in plain site. However, to reveal it, the seller needed to ask a few more questions. When I was a young sales person working for a technology software company, I had the pleasure to take Rick, our Senior VP of Worldwide Sales on several high level relationship building meetings with my most important clients. I noticed in every meeting Rick started each conversation by asking about the client’s business… “how’s business?” he would ask, or “I read about the recent acquisitions your company has executed, how are those working out?”, on occasion, being even more direct, “I understand your CEO has announced company wide cost cutting initiatives, how’s that affecting your team?” 

My reaction to his questions varied from wondering why he would ask a senior technical leader about business, to kicking myself for missing the elephant in the room when he had obviously done his homework better than I did. 

After one particularly hair raising insight gained from one of his broad, “how’s business going” questions (my client revealed a merger pending with one of our other customers who had a much better pricing arrangement with us), I began to appreciate the value of his line of questions. He was purposely trying to uncover the priorities of the client both hidden and in plain view. In most cases, the answers provided gave me better insight into the forecast likelihood of the opportunity, both good and bad.

The current business issues of your customers will dictate their buying behavior. When the sponsor goes to the funder for sign-off, the current business issues that have his or her attention will influence their desire to fund or not fund a purchase request. For instance, cost cutting initiatives will put most purchases on hold, while prioritizing purchases that can save additional costs in other areas. A recent merger announcement can also put purchases on hold until the dust settles. Other business issues like changing competitive landscapes,  or changes in federal regulation could be positive for many selling situations. Rick taught me to evaluate my selling opportunity against the current business issues of my prospect to get a better insight on the forecast likelihood of every opportunity.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.

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The Biggest Challenge in Sales: The Unknown

I was conducting a coaching session yesterday with a sales rep in one of my client accounts. He’s relatively new to sales, having transitioned from the customer side to the supplier side, but he’s learning fast. After guiding him through some opportunity reviews, I asked him to share his perspective on the toughest challenge he’s identified as a professional seller. He said, “It’s the uneasy feeling of not knowing.”

Having spent my career in sales, I had to agree. But I wanted him to know that he didn’t have to dangle in the wind as often as he was.

Here are the top three tactics I shared with him for reducing the unknown:

1. Anticipate the problem. I suggest something I call “conditional access”. If you’ve ever engaged a high level stakeholder who acknowledges a need but wants to hand you off to a lower level contact to validate your offering, this is a valuable tactic. When they suggest you continue the dialog with one of their underlings, acknowledge the direction, but ask for access back if something should go awry. Then document it in your email recap. I’ve never been turned down on the request, and have enjoyed the benefit on the occasion I’ve had to call the higher level contact when my calls were not being returned at a lower level. Many times it’s a matter of reinforcing the sense of urgency from the leader, which is more powerful if it comes from their lips.

 

During a contentious telephone call with a rude purchasing agent a few years ago, I acknowledged that we had reached an impasse and suggested we call the General Manager that initiated the discussion with me. The purchasing agent actually said she didn’t think he’d take my call. She was completely caught off guard when I added him into the call, and became very compliant after he reinforced how important it was to get the contracts sorted out that day. Had I not lined up the conditional access beforehand, the alternative would have been to spend a couple of weeks leaving voicemails for the purchasing agent who would have happily watched me sweat until I met her demands.

 2. Confirm, confirm, confirm. Confirm the problem set in writing after your first dialog. Confirm the value proposition in terms of the cost of not making a decision in writing. Confirm the evaluation process in writing. Confirm every agreement you make along the way. If your contact goes quiet or won’t share some information that you need to understand the buying process more clearly, recall one of the agreements to refresh their memory on the priority of the initiative.

One of my sales methodology students, a sales representative at Cisco, shared the results of this tactic. Near the end of particularly harrowing quarter, the point of contact for his most important opportunity said they were going to delay the purchase until the next quarter simply because they had too much going on. He nodded his head in disappointment, and said, “ok, I understand, but I can’t get this picture out of my head.” He piqued the buyer’s curiosity, because the buyer asked, “what picture?” The Cisco rep replied, “I have this picture in my head of you rolling a wheel barrel full of cash out into the parking lot, dumping it over, and setting it on fire. You told me that you were burning way too much money supporting a constantly failing network.” The contact nodded his head at the reminder and placed the order that day.

3. Fan out. If you find yourself selling to one set of stakeholders, say IT for instance, and you convince yourself they are the right people since they have the budget, have purchased something similar before, and have demonstrated interest, your setting yourself up for the queasy feeling of the unknown sometime in the future. The point is, they can become easily distracted by the fire fight of the day, and they are probably buying your solution to satisfy their customer, another set of internal stakeholders.

When the phone calls go unanswered, your best bet is to have already made friends with the stakeholders on the business side of the house. If they have a vested stake in your solution, they are most likely to give you some timely insight or rattle a door if asked.

Also, if the infrastructure contact wants to keep the order size small due to budget constraints, a well-placed supporter on the business side can probably fatten the budget with other discretionary funds. Keep in mind most IT organizations get 1-2% of the company budget, while General & Administration (including marketing and sales) get upwards of the 50% of the budget.

In summary, the learning opportunity is to plan ahead for the uneasy silence. Everyone gets distracted, most people find it easier not to reply than having an awkward conversation when the situation changes, and most IT people adjust to a tight budget by squeezing the seller, not the end customer who would rather have the proper solution. Incorporate the conditional access, confirmation habit and fanning out as a daily practice and you should see the number of unknowns diminish and your forecast accuracy improve.

*** Please “like” this post or forward it to anyone you know looking for an advantage in selling.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.

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Funnel Building: Increasing Average Contract Value

In my last post, I reviewed the connection between building a larger sales funnel and the skill of disqualifying prospects that can’t buy. For this article, I’ll share some insight into another funnel building skill which helps those who may not have the luxury of having too many prospects.

Years ago, I worked for an organization that was mired in a sales productivity sand trap. For several years, the average productivity per rep was stuck at about $1.4 million in software sales. As a result, we were faced with a challenging dilemma: either add people to grow the company – a very expensive option, or learn how to grow our deal size. Due to our limited market size, we ruled out the strategy to sell to more customers since they didn’t exist, and we considered focusing on shortening sales cycle time, but ended up getting that with the deal size increase as an added bonus.

The strategy that emerged was to use professional services to grow our deal size. This intitiative taught us how to grow our average contract value with both software and services while shortening our sales cycle. The key was targeting new stakeholders in our existing opportunities. Specifically, we began a company wide effort to include the business stakeholders into our opportunities. Prior to this initiative, we limited our contacts mostly to the technical side of the house.

In my sales training and consulting business, I see this self-limiting behavior frequently. The actual end user or IT will engage in a dialog about a solution, and the seller concludes this is who they should spend their time on. Unfortunately, these contact types have limited budgets, limited political power, and are compelled to NOT rock the boat; consequently, smaller deals result. Conversely, business people are steeped in a culture of rocking the boat, looking for growth opportunities, typically monopolize power in many organizations, and have larger budgets. (Most companies allocate 1-2% of the budget on IT, while sales and marketing get upwards of 50%). The opportunity is to learn to tap this reservoir for your sales initiatives. If you do, you will see growth in your average contract value.

As a starting point, here are three skills I suggest you adopt:

1. Change your vocabulary.

The first skill set to master is learning how to speak to different cultures. If your technical contacts typically want to talk about bandwidth, analytics, quality, throughput, or any topic that has a technical flavor, you have to limit those adjectives to that audience. The business culture uses terms like revenue growth, new product introduction, customer acquisition, and differentiation, to name a few. Take some time to connect each of your technical capabilities to business problems and issues. Then use their vocabulary to get their attention, build credibility and gain access.

2. Understand that nurturing and expectation setting will be required.

Just yesterday, one of the sales people in a client company told me cold calling on the business side wasn’t working for him. I wasn’t surprised. The business stakeholders aren’t aware of his company or his solution, so they naturally avoid engaging as a standard calendar management tactic. I suggested he take a three step nurturing approach to the targeted business stakeholders. First, inform them you are working with others in their company on an initiative that will have an impact on business results they may be interested in. But don’t ask for anything yet! Just let them know that you thought they should be aware of the initiative. If it’s an important topic to them, they’ll do some investigating. I call this creating hallway buzz.

Your communication may sound something like this: “Hi Joan, I’m reaching out because I’m working with your IT organization (John Doe) on a solution for the <insert problem in their vocabulary> that is impacting your <revenue, cost management, or some other business issue> results. Based on your role, I thought you might be interested. Let me know if you have any questions about the project.”

It’s very common at this point to get your hand slapped by the technical contact. They’ll get an inquiry from the business stakeholder as a result of your communication, and in turn, demand that you limit your communication to them. They do this from either a place of insecurity, habit of control, or many other common personal agenda related reasons including avoiding visibility on a non-budgeted project.  This is where expectation setting becomes critical. You’ll need to become comfortable setting boundaries with your technical contacts. I suggest describing your modus operandi and rationalizing the action with your company’s learning experience; it might sound something like this, “I’m sorry this activity was upsetting to you. We’ve found the best successes include engaging the business stakeholders in the dialog, whereas the opportunities that end up in no decisions usually exclude them from the conversation. I thought it would make sense to start that dialog, don’t you?” Ideally, you can steer the conversation to a collaboration agreement on the topic and put the hand slap behind you. In any event, your goal is to continue to include the business stakeholders in the dialog and the best case is when your technical sponsor sees the light and agrees to collaborate on their inclusion.

If they aren’t convinced with the operating rationale, it doesn’t hurt to help them see how it will help them personally. As an extreme example: “Joe, if you want to become CIO someday, you’re going to need to get comfortable engaging the business stakeholders in your initiatives, perhaps we can use this opportunity as a chance to collaborate together to help you build this skill.” Or less extreme, “Joe, you mentioned your frustration with how small the budget was for this project, doesn’t it make sense to see if someone else might be willing to add some funds to your initiative?” (Research from CEB indicates that the best sponsors are the ones that mobilize other stakeholders into the conversation, so it’s in your best interest to coach your contacts if needed.) Of course, whatever rationalization and personal interest tactic you take will require your judgement based on the context of your discussions and your rapport.

If you navigate this first stage of the nurturing process (and technical contact control effort) successfully, you are ready for stage two. At some point, when you’ve gathered enough information about the relevant problems their organization is experiencing, how much it’s costing them, and how that relates to key business issues they are focused on, you (or your now collaborative technical sponsor) should reach out to the business contact again to confirm this is a value proposition that is accurate and worth pursuing. (Notice, you haven’t asked to meet the business stakeholder yet. You’re nurturing the relationship with value before asking for time.) If you’ve done a good job gathering the information and articulating it in their vocabulary, don’t be surprised if they ask for a conversation at this point.

Here’s an example, “Hi Joan, reaching out to follow up on the XYZ project. After a series of investigative reviews we’ve identified a value proposition that I’d like to verify from a business perspective. We’ve found that a database problem has resulted in about 14% of your customers abandoning their website purchase process prior to checkout due to frustration. As a $100M company, the simple math says this is about a $14M issue. Wondering if you see it the same way or think it’s not worth solving in light of other issues. Your perspective would be valuable to me in my allocation of resources.”

Even if they don’t respond with a suggestion to discuss at this point or point you to another contact they delegate with the responsibility, you have another nurturing opportunity. I recommend a follow up communication to see if they would be interested in understanding the business proposal you will be submitting. I also suggest that you (or your collaborative sponsor) offer to invite them to the formal meeting with the technical team, but offer to provide them with a 15 minute executive overview if they don’t have time for the one to two hour meeting with the rest of the evaluation committee.

Guess which one they usually prefer? In the event they elect to go to the technical meeting, they can be a great resource for keeping the business proposal focused on the outcomes instead of price. I suggest using their presence as the rationale for starting with the executive summary identified below.

I’m sure you can imagine there are other ways to deliver value and build credibility with information in your nurturing campaign. I’ve only highlighted a few, but the idea is to build your credibility without a major ask too early. However, at some point you may need it. If you’ve done a good job and navigated the pushback from the technical team, you should be in a position for a big “ask” if the circumstances aren’t in your favor. “Hi Joan, I’m reaching out to ask for some help on the XYZ project. I’ve run into a <budgeting shortfall, prioritization problem, or other IT roadblock> that I could use some coaching on. Can I get 10 minutes of your time to share the details and see if you have any ideas for eliminating the $14M problem we’ve identified with your online storefront?”

If you’ve navigated this successfully, you will likely find yourself with a more powerful ally in your quest to close your opportunity. Along with the more powerful ally comes wider discretion over fixed budgets, the insight to reprioritize for business reasons, and a more willing sponsor to take you to even more powerful stakeholders should the need arise.

3. Restructure Your Pricing Proposal to be a Business Proposal.

Remember the suggestion to invite the business stakeholder to the proposal presentation, or offer to summarize it for them individually? The key to success on this topic is to structure it like a business proposal, not a solution overview and price quote. The executive summary should include the key problems uncovered, the impact of solving or not solving the problems in terms of revenue, cost reduction, or other tangible return, and the relation to the current business issues of the senior management. The technical details should follow last. The executive summary should not be a summary of your company’s history and solution overview as a majority of technology proposals tend to exemplify. 

Your goal should be to develop a proposal that compels action – not negotiation.

Summary

The example situation I described at the beginning of this article grew average productivity of sales people from $1.4M to over $10M in a five year time span, largely due to targeting more powerful stakeholders.

Although none of these tactics are foolproof, with practice, and anticipating the hand slap response, you’ll find your access to more powerful stakeholders (obstacle removers) improving along with your average contract value and sales cycle. Asking for forgiveness in light of a well thought out rationale can relax many ruffled feathers. I would also suggest practicing on your new relationships versus your long term customer relationships. New relationships tend to allow more leeway than longer established relationships where behaviors have been cemented in tradition. Also, as many who have learned to integrate two culture selling into their practice have told me, it’s a lot more fun to sell to the business side of the house!

Please “like” this post or leave a comment! It helps to spread the word on best practices.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.

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Build a Bigger Sales Funnel: Learn to Disqualify

I know it sounds counter intuitive, but learning to disqualify can help you build your sales funnel faster. If you happen to be one of the many that are hustling to rebuild a year end depleted funnel, this article may help.

Back in early 2009, during the height of the recession, I took on a new client named Imprivata. They deliver single sign on solutions to improve security in the healthcare marketplace. They were perplexed by their situation. After investing a lot of money into marketing automation, they had more leads than ever before, but their close rate was getting worse. It would have been easy to rationalize the decline of their close rate around the impact of the recession, but they wanted to be sure.

In an effort to flush out the answer, we implemented a disqualifying process, and the results were phenomenal. They ended up closing about 20% more opportunities per rep than the year before, and their average contract value increased 19%, all during the most significant economic downturn many of us have ever experienced. (Tom Brigiotta, VP Sales, Imprivata)

To understand how these results were achieved, I’ll start with a basic description of the disqualifying process and then connect it to the outcomes.

For Imprivata, we designed a two tier qualification question set. The first tier included:

  • Can the prospect define the problem set that needs to be addressed?
  • Can the prospect identify the impact of the problems?
  • Can the prospect identify the current business issues of their company or organization?

The problem identification question doesn’t have to be cut and dry. The sales person can also help the prospect develop the problem statement. As an example, if they contact a prospect because they engaged in some marketing automation activity that flagged their interest, the sales person would reach out and begin the dialog. A key part of that dialog would be to ask them why they were looking at this solution, in essence, getting the prospect to verbalize the problem set. If the prospect couldn’t verbalize the problem set, the rep could probe for existing problems: “Do your employees leave their passwords on sticky notes in plain sight?” “Does this pose security challenges?” “Do you have to abide by HIPAA regulations?” The objective is to surface the problem definition to identify the reasons for change and gain agreement on the problem set.

However, if the prospect wouldn’t agree to a problem definition, the qualifying question is rated as a “no” and they move to the second tier qualifying question explained below.

If the prospect could define the problem set, the next question in tier one is intended to uncover the implications of the unresolved problem set and help the prospect rank the problems against others that might be competing for their attention. Again, if the prospect can’t answer the question directly, a set of probing questions could be offered to help the prospect understand the value: “Have you been put on notice or fined for any security violations?” “Have you or your colleagues’ ever lost productive time due to lost or forgotten passwords?” “How long does it take for IT to help reset passwords?”

If the prospect still can’t mutually help develop the value proposition, then the second qualifying question is rated as a “no” and the seller would jump to level two.

Lastly, if the answers to the first two qualifying questions were positive, the prospect is asked to identify the current business issues of their organization. The objective is to connect the problem set to a higher level business issue that has the attention of senior management, which helps justify and prioritize this expenditure against a more circumspect criteria set. Many purchase requests are shot down because they don’t align with senior management’s current agenda. Again, if the prospect couldn’t identify the current business issues, the rep would be prepared to probe with an examples such as: “Most of our customers are focused on… lowering costs, or seeing more patients in each workday, or scaling their operation… do any of these apply to your situation?

As with the first two, if the answer to this qualifying question was rated a “no”, the second tier qualifying question was applied.

Tier Two Qualifying Question: “Can you introduce me to someone who can answer these questions?”

If the contact contact couldn’t answer the first tier qualifying questions, and refused to introduce another stakeholder, the engagement was put on hold, usually by politely putting the contact into another automated marketing nurturing process to be followed up when another trigger was tripped. On the other hand, if they did introduce a new stakeholder, the qualifying process was repeated with the new contact.

So how does this help you build a bigger funnel and sell more? The answer is twofold.

First, most enterprise selling professionals report no decision outcomes as representing 30-60% of their selling efforts. No decisions outcomes are frequently caused by sponsors that can’t effectively articulate the need to change, prioritize the need to change against other initiatives that are competing for the same money, or they fail to align their needs with the current agenda of their superior management who find it easier to ignore requests that lack meat. By removing these contacts from further activities that have no chance of producing a positive outcome like demonstrations or follow up communication, the seller is freeing themselves to pursue other opportunities that can buy.

I’m reminded of the adage taught to me by a sales manager I had early in my career. “When a prospect fails to buy, they have robbed you twice. First they rob you of the time you spent on them, and second, they rob you of the opportunity to spend that time on someone who can buy.”

Secondly, the qualifying questions actually help a buyer buy more effectively which leads to higher contract values. In essence, the answers to the qualifying questions help the contact to shape the problem definition more articulately, justify the purchase more clearly in light of other competing options, and more effectively compel senior management to take action with their own interests. This framework frequently compelled decision makers to expand the scope to include other organizations or stakeholders that weren’t included in the dialog but could benefit from the application.

Kevin Temple guides sales teams to be more agile in their disqualifying process and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering training, coaching and project oversight to improve the agility of sales teams around the world.

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Sales Leaders: Its Closing Time!

It’s that time of year again. If your sales team is trying to close out the year, this article may help you optimize your outcome.

I’ll introduce two very valuable tools, the Mutual Activity Plan and the Close Plan.

The Mutual Activity Plan (MAP) is a document developed with the prospect to identify the activities required to reach a decision. These activities might include meetings with other stakeholders, conducting evaluations, talking with references, proposal reviews and more.  It’s organized with due dates and action owners as if it’s a project plan – because it is a project plan. Further, it’s a “map” to a destination point; placing the order.

The value of the MAP is getting the buying sponsor on board with you with a timeline. Moreover, if they fail to meet an action item, they have broken an agreement of sorts, providing you with the platform to ask, “why?”, or better, ask for something in return.  If they fail to meet a commitment, I suggest identifying something that will help improve your chances of closing on time, such as meeting with the final decision maker sooner, or reviewing the prospect’s internal justification document to add suggestions for example.

Here’s a simple example of a MAP:

Activity                                                                             Owner                  Due Date

Discovery meeting with all stakeholders                 Smith                    11-25-15

Demo for entire team                                                  Smith/Jones        12-1-15

Review with Legal                                                        Smith/Jones        12-7-15

Engage Purchasing                                                       Smith/Jones        12-14-15

Place order                                                                     Jones                    12-20-15

Given the complexity of your sale, the MAP may be short and to the point, or it may be several pages long. The longer it is, the more important it is to establish it as a tool to manage the process to a predictable outcome.

Recently, one of the sales leaders in a client site of mine reviewed the previous quarter closing results for one of his struggling sales people and found that every opportunity that closed had a MAP, whereas, the opportunities that slipped into the next quarter did not have a MAP in place. The lesson for the sales rep: it’s difficult for the prospect to meet expectations if they don’t know what they are.

The Close Plan is the MAP plus the internal activities the customer should not see, or should not be bothered with, but need to be managed to closure. These might include examples such as a credit check on the customer, approvals for special options, new product capabilities that are required, discount approval and more.

I typically see more complex close plans required for professional services or other applications where there are multiple contingencies to address, several internal approvals required, and heavily customized solutions. However, sometimes they are more complex because of the nature of the selling company’s culture or bureaucracy. Regardless, the more internal obstacles you have in the way of closing an opportunity, the more important it is to have a close plan in place.

Finally, having a plan in writing is good, but it also needs to be managed to success. Use the MAP or Close Plan as a review tool to help the sales person make progress on their plan.  Check off items as they are achieved and identify activities with high risk to brainstorm on alternatives and contingencies.

I feel compelled to wish you luck closing out your quarter, but we both know that it comes down to great leadership.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering training, coaching and project oversight to improve the agility of sales teams around the world.

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No Decisions Take Twice As Long As Wins!

Our firm recently completed an analysis of the pipeline statistics for a large software company. Like many of the companies we perform this service for, the most revealing statistic to them was the time it takes to reach a No Decision outcome. For those of you that might be new to the term, a No Decision is the result of a sales engagement where the buying team “decides” not to buy anything. Some refer to it as a decision not to decide. There have been lots of statistics published about the percentage of No Decisions in the average pipeline; it’s not uncommon to see No Decisions make up 40-60% of most enterprise selling pipelines. But the fact that they take twice as long to conclude was mind blowing to this sales team as well as others.

Early in my career a sales manager told me No Decisions rob you twice. First because you don’t get paid for the work you did, and second because you could have worked on another opportunity that you could have won. Since then, I’ve updated that perspective. You actually get robbed three times over since you could have worked on TWO other more probable opportunities in the same timeframe AND you didn’t get paid for the one you did work on!

So why do they take longer to conclude? I think there are two primary factors. First, the buying sponsor has some level of commitment to the solution, but lacks the ability or argument to mobilize and convince others – so they keep trying. But they keep their voices down to the mutual detriment of both parties. If you’ve ever heard a buyer say, “I’ll bring it up, but now is not the right time.” You were hearing the telltale sign of a No Decision in process. If the argument really is compelling, now is the time to bring it up! 

The second reason is the seller’s reticence to qualify engagements out of the pipeline. The continued engagement of the sponsor seems like a positive buying signal so they keep investing time and resources. However, they would be better served by frequently qualifying the engagement against some common indicators of a successful outcome, and taking the appropriate steps to back burner the opportunity if they don’t make the cut. These should include:

  • Has there been a clear identification of the problems to be solved?
  • Has the impact of taking or not taking action been clearly identified in terms of money?
  • Do the problems contribute to a business issue that currently has the attention of more senior management? (Versus a business issue we think they should be concerned about.)
  • Does the sponsor mobilize other more powerful stakeholders into the conversation?

Recently, a client of ours implemented this type of “qualify out” process and ended up closing 20% more transactions per rep AND witnessed a 19% increase in average contract value! The first metric was not a surprise. Spending less time on engagements that have no chance of closing should produce more success, but my curiosity was piqued when we found the average contract value improved as well.

My rationalization of the outcome centers on the influence of the qualifying questions. By doing a better job of articulating the problem statement, the impact of not taking action and the connection to current business issues, the opportunity gained more visibility and better sponsorship. As a result, the natural tendency to start with a small pilot trial was enhanced with a higher sense of urgency to resolve the problems and deliver a business impact resulting in a higher initial spends.

If your pipeline is suffering from a high percentage of No Decision outcomes or you’re looking for a way to improve revenue results in general, I’d suggest a qualify-out initiative. At a minimum, you should see an improvement in win rates, but don’t be surprised if your average contract value improves as well.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.

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Reducing “No Decision” Outcomes: The Forensics of Selling

I read a quote the other day attributed to Sirius Decisions, the sales research organization. It stated, “71% of sales leaders attribute difficulty in revenue growth to the lack of ability of their sales people to connect their solutions to the business issues of their customers.”

If you’re in the 71% struggling to get over the goal line, there’s good news and bad news. The bad news is that sales training doesn’t solve the problem – as if that’s news to you. The good news is that Selling Forensics can.

Selling Forensics is the science of examining the work product produced by your sales team. Work products are the distinct communication vehicles developed and delivered to the customer during the sales process. They include presentations, email confirmations, proposals and the like.  Just like fingerprints can reveal who was at the scene of a crime, the work product captures the customer conversation of your sales team for each individual account opportunity, revealing insight into the selling mechanics of the sales person or the entire team if taken in whole.

However, the interesting aspect is that just observing work products can produce positive results. In applied physics, there’s a principle that comes into play whenever anything is measured. It’s called invasive testing, where the test itself can alter the results. For example, consider a scientist trying to measure the temperature of a liquid in a vat. Placing a thermometer into the solution can actually change the temperature of the liquid. If the thermometer is colder than the solution, when inserted it robs some of the energy of the liquid as predicted by the second law of thermodynamics, producing a different reading than the temperature of the liquid prior to measurement.

When a sales leader initiates a work product review, the work product will change. Instead of the laws of thermodynamics, I call this the laws of selling. They are:

  1. The energy exhibited by a sales person is equal to the amount of energy need to just barely get the job done plus the level of oversight on the activity. To improve a sales effort, oversight has to be applied.
  2. When two closed systems come in contact, a buyer’s organization and a seller’s organization, the resulting entropy is equal to the quality of communication exchanged between the two. Buyers are more motivated to change if the seller connects their solution to the buyer’s business issues and challenges.
  3. The entropy of a minimum selling effort is zero if the buyer doesn’t recognize a reason to change. This is why so many sales organizations have 40-60% no decision outcomes. Minimum selling efforts will result in fewer buying decisions.

All kidding aside, inspecting work product and identifying short falls will improve the work product, the quality of communication and ultimately the number of buying decisions made in your favor.

Years ago, a software company called Cadence Design Systems was undergoing a sales transformation. As part of the transformation a decree was made that no proposals could be submitted to a customer until it was inspected and passed the test for three criteria: the business issues of the customer were identified, the underlying people, process and technology problems were reiterated, and the impact of the customer taking or not taking action was cited. The thought was that while the sales person may not be able to access the decision maker, the proposal probably could. They wanted the proposal to sell for them in their absence.

At the beginning of this initiative, almost all proposals failed the test. By day 60, almost all proposals passed the test.  The testing itself changed the outcome of the test. But even better, their average contract value (ACV) increased 38% in just 90 days. They didn’t just close more deals, they closed bigger deals as well.

On a side note, you can imagine the number of conversations this caused that went like this: “My boss won’t let me submit a proposal until I get three questions answered that I forgot to ask. Accompanied by the reply, “ok, what do you need to know?”

If you’re one of those sales leaders that could benefit from your team’s ability to connect the customer’s business issues to your solution, then I recommend an initiative to test your work product. Ultimately, the proposal is the final communication that either captures the compelling reason to change, or demonstrates a minimum selling effort with a price quote wrapped in a gracious thank you.

Your inspection should include evidence of:

  • The current business issues identified and confirmed with the customer.
  • The top three to five underlying challenges or problems that you can solve better than other solutions.
  • The impact of making the decision in their terms, not yours. We’re trying to cite their metrics for achievement, not ours reflecting other customer successes.

I’ve implemented this Selling Forensics initiative at a variety of companies and the result is always the same: average contract values improve and no decision outcomes decrease.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering training, coaching and project oversight to improve the agility of sales teams around the world.

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