A blog from Salesforce.com, the sales automation company quoted recently some worrying statistics;-
- Only 46% of Sales people believe their pipelines are accurate.
- A full two thirds of all sales people miss quota.
- Over half of all sales people close less than 40% of their forecasted deals.
- The best sales people are 2.5 times more likely to be good at qualification than the rest of the sales population.
So, qualifying deals and forecasting accuracy are major challenges for most of us, and an area for dramatic improvement in most sales teams.
Here at ValueSelling, we have analysed hundreds of forecasted deals and were able to come up with the five most common reasons why forecasted business did not close;-
- Lack of Connection to the Prospects Critical Business Issues
It doesn’t matter how good your product or service is, if it doesn’t connect to a critical business issue for the prospect, it will probably not close. This prospects business issue is probably going to have something to do with their revenue growth, cost reduction or quality improvement. As a sales person, one needs to research and understand how your product or service offering will impact on the prospects’ bottom line.
- Lack of Perceived Value
The prospects business decisions are usually justified in financial terms – we need to develop the skills to have the Business Value conversation with our prospects – very often the prospect will not have the answer to the question of whether it’s worthwhile for them to go ahead with a purchase, so we will need to help them uncover this value for themselves by asking the right questions.
The Harvard Business Review recently quoted a Corporate Executive Board study of more than 1,400 B2B customers and found that buyers typically are 57% through the buying process before they see the sales person from a potential supplier. This means that the buyer has most likely preconceived ideas about potential suppliers or price, so the sales person is going to be under even more pressure to have a meaningful Value Conversation, late in the buying cycle.
As well as this rational discussion about Business Value, there is also the critical aspect of the emotional or Personal Value of the purchasing decision. Unless these two aspects (Business and Personal Value) are addressed, the sale will most likely stall, or be lost.
- Lack of Differentiation from the Competition
There is always competition, whether it is another company, resolving the Business issue with internal resources or doing nothing at all. Sales executives need to be skilled in asking the right questions to ensure that their unique capabilities are aligned to the problems that the prospect is trying to solve in order to overcome their major challenges.
- Inability to connect with the Real Decision maker
The world of selling has changed dramatically in the last ten years, and it has become more and more difficult to gain access to the real decision makers. Many sales people waste hours speaking to people in the middle of the organisation only to get informed at the last minute that they lost the deal (Refer to my previous blog) “Easy Ways to Gain Access to Executive Decision Makers”
We have all heard the expression “buyer’s remorse”, as your prospect gets closer to making a purchasing decision; their personal and professional risk will increase. An astute sales executive will remember that we are in the risk mitigation business and the customer success business.
We can alleviate much of the buyer’s anxiousness by documenting a well-constructed plan with our prospect which outlines exactly what steps we have mutually agreed with timelines.
As sales professionals, we know that there is no ‘Magic Wand’ that can be waved to close every deal, however what we can do is use a powerful and reputable sales framework that leverages how customers buy. We need to engage with our prospects so that they may see the value of our unique capabilities and how these impact on their most important business issues. We need to have the conversation about Value, be talking to the right people and put together a mutual plan if we want move our ability to close deals away from luck (and we have all had some of those!) to increasing our probability of success in a consistent and practical way.
PJ Nisbet is Managing Partner at ValueSelling with over 25 years of sales leadership positions spanning the oil, agricultural and IT industries. He is driven by his passion for developing people and sales improvement. He holds a BA (Hons) in Organisational Behaviour. Find out more at www.nisbetassociates.com