Handle Close Dates Like Plutonium

Sales forecasting, like nuclear power, can be a dangerous business.

When a customer provides you with a date --- “we will purchase by December 15th” --- please handle this statement with extreme care.

The worst thing you can do:  take the date at face value, and tell your sales manager it’s the date you expect to receive the PO.  

Whenever you think you have a date certain for receiving an order, don’t celebrate.  Instead, put on your skeptic’s hat and ask questions, such as:   

Who needs to approve this purchase?

What forms must be completed prior to purchase:  an NDA? a Master Services Agreement? a Statement of Work (SOW)?  A W-9 tax form?

Will we need to be processed as an approved vendor?  

Will the purchase be made through a channel partner?

Here’s an example.  Two years ago a large bank told us with complete conviction that their absolute can’t miss purchase deadline was December 15th.  After inquiring further, they insisted that by that date (within the next 30 days) they would review competing products, issue an RFP, get through a security audit, and issue a PO to the selected vendor.  Yes, they communicated that timeline with a straight face, as if they were telling us the sun would rise tomorrow.  

But to us, it defied the laws of physics.  And so it did.  By December 15th, they hadn’t even finished reviewing our solution, let alone issued an RFP.  Purchasing was not a gleam in anyone’s eye by that date (and the purchase didn’t happen for another three months).  

Why would a buyer issue an unrealistic timeline to a vendor?  Let me count those ways in a future post.  Meantime, when you hear a close date from a prospect, bring your questions to the table.

Time is your enemy

Patience is a virtue, and it can help in sales.  

As long as you remember this: time is your enemy.

“Aren't you beginning to feel time gaining on you? It's like a predator. It's stalking you.”

Dr. Tolian Soran

The longer it takes to close an opportunity, the greater the chance you will encounter some kind of sales-killing alien.  The dreaded Reorg.  The Disappearance of your coach/champion.  The sudden Freeze on spending.  

Best to take coach John Wooden’s advice:  be quick (but don’t hurry).

Speeding The Sales Cycle - 4 Ideas

"Why can’t you close more deals?”

“Because our sales cycle is so long.”

“So what are you going to do about that?”

Here are four ideas:  

1- Limit pilots, trials and evaluations to 15 days

The length should match the complexity of your product, and the employee/revenue size of your prospects.  For example, major banks will need more than 30 days to test your complex on-premise solution.  But an SMB should be able to test your hosted mobile app in less than 30 days.   

2- Limit to 15 days with a 15 day extension

This is a good compromise if a prospect explains the need for a full 30 days.  You can ask for a day-14, calendared status conference, to ensure you get their feedback and supply any needed support before the 30 days expires.  If there are issues or concerns, you don’t want your first follow-up conversation to occur on day 30.

3-Conditional POs

For smaller prospects and lower-priced offerings, consider offering the opportunity to buy it now with a 30-day return privilege.  There won’t be anything to physically return in most situations, so effectively it means you won’t invoice them until day 31 (assuming they “accept” your solution).  It’s a way to address the perceived risk, while avoiding the added layer and documentation involved in pilots.

4-Success Criteria

For more complex solutions and larger ticket sales, you should know what specific functions are going to be tested, and what will be judged a success.  Otherwise, you may be asked for extensions to test “just one more thing.”  Make a detailed list and get their (digital) signature on it.  You won’t know where you’ve been, or where you’re going, without this kind of roadmap.

IS THE SALE LOST, OR ARE THEY JUST BUSY?

Many times you’ve done a great job during your first call with a prospect.  You’ve identified a real need, and they’ve agreed on a date and time for a second call.  

Then the prospect fails to show up.

So an email goes out, and a follow up phone call, in hopes of rescheduling.  This was a buyer, not a tire kicker in need of brochures.  Sending them a whitepaper at this point is, well, pointless.

What do you do?

a) Persistent patience.  

   There are all kinds of reasons for a no-show.  Illness.  Vacation.  Week-long trainings.  Sudden change in priorities (your prospect is in a large company and has finally found a window to solve a nagging problem, but now his boss comes in and closes that window, reassigning him to a different task).

   Try reaching out at different times, using different methods.  Check with his colleagues, at the same level on the org chart; below that level; or if necessary, above.  And if that feels uncomfortable, enlist your manager as a wingman for this task.

    

   After several failed attempts, I’ve sometimes sent an email with this subject line:  Are We Done?  It regularly gets some kind of a reply.  

  The goal here is not to keep up appearances by sending this person relevant content every week.   You need to find out why the agreed next step is not happening, and whether this opportunity really exists, and what the real timeline is.  

b) Re-check your qualification

   Even though the prospect agreed to call #2, it could be that their actual timeline is far different than you thought.  Their disappearing act could be a version of “the check’s in the mail.”   Rather than rejecting you directly, they found it easier to talk at length and schedule a meeting they viewed as optional.  

  In some cultures, this is a way of “saving face.”   For example, in Japan, you may never hear “no”; you will simply hear a lot of “yes” that does not materialize.   

 When people don’t show up, you may have identified a serious need, but no real timeline, i.e,. the buyer has no commitment to do something about the need near-term.

Sometimes buyers will tell you this in the first call.  Just be sure you are listening!  Don’t let a screaming need cloud your other senses.

HOW TO IDENTIFY BUYERS

It’s not an easy thing, parsing interest from need.  

If we can accurately parse, i.e., qualify, then we can spend more time with people who are ready to buy.   And allocating our time wisely is how salespeople make quota.   

Here’s a good self-diagnostic:  how many sales are you losing to the competition?  If the deals you lose are due to competition, congratulations!  you’ve been spending time with buyers.  

So how do you know if someone is just kicking the tires, or whether you are just in a really long sales cycle?

A buyer does these kinds of things:  

- identifies a real, meaningful, material pain or goal;

- indicates that, to some degree, time is of the essence;

- involves you with more than one person at their company;

- takes a test drive;

- reveals their full shopping list (perhaps an RFP); and/or

- has tried or at least fully investigated other solutions.

The first one is the most important.  An initial qualifying question to ask is, “how did you become interested in us?”  

If they just read an article about you in TechCrunch that’s nice, but it says nothing about whether they have the kind of toothache, or ambition, to buy anything from you.

Window shoppers look more like this:

- their primary (or sole) inquiry is regarding price;

- there is no driver for their inquiry:  no pain, no incident, no project, no RFP, nada;

- they demand information immediately, i.e., they are facing a deadline for filing a report, not in the process of making an informed purchase;

- only one person seems involved in the sale (most companies don’t buy in a vacuum); and/or

- they have not looked at any competitive solutions.

Making quota is not about forcing as many square pegs as you can into round holes.  It’s about qualifying prospects, and allocating more time to those who intend to buy.