Deal forecasting accuracy is more than a critical component to business performance. As Sales Leaders, it is also a key contributor to our credibility within the companies we represent. So, why is it time and time again deals slip beyond the date that has been forecasted to close? We know there are many factors that impact deal signings – our competitors, client events or changes, and our own internal pressures, processes, and requirements. The question is, what can be done to minimize deal slippage?
There are three critical success factors which, when executed well, can significantly improve our hit rate for deal signings, and by doing so, raise our credibility as Sales Leaders.
1. Internal Deal Management
Frequently, a sign date is determined based on what our organization would like to see, rather than on evidence-based planning and firm client commitments. As important as managing the deal with the client, we must also become an expert at managing deals internally, setting expectations that can be confidently delivered.
Clients often provide a timeline they will be working to. Unfortunately, if this timeline comes anywhere close to targets for a quarter, then it is not uncommon to see that deal baked in as a “firm commitment” in our business forecast for that quarter. Then we have to fall on our swords later when it doesn’t happen. Sheer madness – but it happens all the time.
Without a detailed understanding of the client decision-making process and a compelling business reason and commitment from the client for a sign date, calling out a firm date at this stage in the sales process is premature, at best. Often, it results in disappointment.
It gets worse. Repeated failure to meet these fictitious sign dates has a direct negative impact on our credibility as Sales Leaders and of those senior executives to whom we report. Do not be brow-beaten into signing commitments we don’t believe in or have any control over. Ensure before committing to a sign date that we are doing so with a high degree of confidence.
Now the good news. By executing the second and third critical success factors well, we can take control of the sales process and bring far more certainty into our sales forecasts… improving life for all.
2. Client Decision-Making Process
When we ask, “Do we understand the client decision-making process?” we often hear things like, “it’s set out in the RFP” or “not yet.” This (or similar) responses should sound an alarm. By not fully understanding the client decision-making process, we are effectively traveling in hope. Not a great strategy.
When we can answer the following questions, we will understand the decision-making process:
A. Who is evaluating our proposal?
B. Who will they be making their recommendations to?
C. Who is informally influencing the decision?
D. Who has final veto rights?
From questions A and B, we can identify who we need to build our relationships with to understand the client’s business objectives and priorities. We can also learn why this project is important (and why now), individual executive’s critical success factors for the project, and how the client will be selecting a supplier / partner.
Sharing OUR understanding of the decision-making process with the client early in the sales process can also help us uncover whether an individual is a Supporter or a Detractor. A Supporter will often add important information / key events to our interpretation… giving us competitive advantage.
Question C helps us understand what other political forces are going to influence the decision. It also opens our eyes to whom the competition might introduce to try and influence the outcome. The same options for us to engage others to influence the decision are open as well.
D is probably the most important question. We have all experienced a deal which we thought was going our way, only to be shocked at the closing stages when an unknown politically powerful person appears and stops the deal, or worse, awards the deal to a competitor.
There will always be individuals with these veto rights, and they do not appear from nowhere. We have just not understood the political landscape in the client organization well enough. It is our responsibility to help the salesperson find these people early and to build strong relationships with them. We must align our value proposition to their business priorities better than the competition.
3. Deal Closure Plan
The third of our critical success factors, often conspicuous by its absence, is a deal closure plan. Opinions vary on when we need a closure plan. On a pursuit of nine to twelve months, we would expect to have a detailed plan fully agreed with our most powerful client Partner Ally no later than two months from an agreed signing date.
Note: if two months out from a targeted signing date and we don’t have a politically powerful client Partner Ally, then that requires a whole other conversation!
First, we need an agreed signing date. Not just a date that suits us, but a date that has serious business implications for our client. We must understand why this date is imperative for our client, what the key business drivers are for them, and the implications of this date slipping. Only then should we jointly commit to “the signing date.”
Together, with our Partner Ally, develop a plan that maps all the key events between now and the sign date. Detail every step towards closure and understand who will be involved, when, why, and how. Identify and commit the critical resources required from both parties on a weekly / daily basis to complete all the work required to meet our committed timeline.
Agree to structured governance around the plan. Starting two months out, we would expect to be reviewing the plan with our Partner Ally every couple of days and to be having regular planned contact with key decision makers. We should also gradually be increasing check point calls / meetings to a daily basis, and even hourly towards the final stages.
Nothing less than relentless focus and attention to detail is good enough!
Andrew Grove, once President & CEO of Intel Corporation, coined the phrase “Only the paranoid survive.” So, be paranoid around your closing plans. Leave nothing unquestioned or left to chance. In turn, these plans will move you to new levels of accuracy with your business forecasting.
For your must win deals, due to close beyond the current quarter, test where you are with the three critical success factors. Are sign dates real, based on a solid understanding of the client decision-making process and a commitment from your Partner Ally? Do you have closing plans for your deals?