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Sales Solutions
It's That Time of the Quarter Again vol 7, issue #6
June, 2010

The month of June brings another quarter end, and with it the associated pressure to close business.  Managers ask their sales people what they think they can close.  Sales people hope and pray that what they tell their managers does indeed come to fruition.  And what typically happens?  The sales people provide overly optimistic projections, the managers dutifully report those projections to senior management, and on July 5th, everyone involved - senior management, sales management, and sale people - express their shock and disappointed that the numbers weren't made.


What can we all - sales managers and sales people - do to make sure this doesn't happen?  To make sure our projections are accurate? To make sure senior management doesn't lose faith in our ability to provide accurate, reliable information they need in order to make financial decisions?


Sales people, the buck starts with you.  You are the ones closest to each of your deals?  You should have both a "feel" for how your top deals are progressing and hard evidence to support that feel.  Identify the ones that have a legitimate chance of being closed this month.  Among the questions you should be asking yourself are:

  • Why do I believe this deal will close this month?
  • What evidence to I have to back up this feeling?
  • How long is my typical sales cycle, and is this a typical sale?
  • What are the stages of my sales cycle, and how long do they typically last?
  • Am I in the final stage, and how long does that typically last? In most B-B selling, contract negotiations can drag on for weeks. If that's the case with you, and you're not at contract negotiation, think twice about forecasting that deal for this month.
  • Are there any extraordinary factors that could slow down this deal, such as an exceptionally large size of deal requiring more reviewers and a higher-level sign off?
  • Would I be willing to put my money where my forecast is - would I be willing to forfeit a portion of my committee if the deal doesn't close?


It's better to provide a well-considered, well-thought-out argument for why you feel a deal will close in fewer than 30 days than it is to simply proclaim that is will based on a feeling.  You'll also earn more respect for doing so.


Sales Managers, the buck stops with you.  You are the ones held accountable for your team's projections, and whether or not they meet them.  You need to demand that your sales people provide solid and defensible reasons that this deal or that deal will close this month.  Your job is to push back, play devil's advocate, and make them justify their projections.  How to do this?  Ask the same questions I'm recommending the sales people ask themselves.  This will put you in a better position to determine what you feel comfortable putting in that June forecast.  It has the added benefit of ensuring that you're all reading from the same playbook.


Relatedly, a radical means  - and not one I'm necessarily advocating - of addressing the broader issue of inaccurate forecasts is to modify your sales compensation plan so that it overly rewards for closed business that was accurately predicted but that also penalizes for projected closes that didn't.  The rationale behind this idea came from an article I read by Sam Manfer titled, "Lay Consequences on Lost Sales and Sky Rocket."


ACTION ITEM

You have it right there.  Simply execute it.  When the next issue of this newsletter comes out, I expect that none of you will have overpromised and failed to deliver, and that all of you will have met your projections.

 

Good selling!


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