When Deals Stick in the Pipeline
What is going on with that huge deal that was supposed to close last month? Why isn’t that deal closed yet? It seems like everything is stuck in the pipeline. When are these deals going to close? There isn’t a sales manager alive who hasn’t wondered why the salespeople aren’t closing deals, especially the deals that were forecast. Sales managers expect and rely on accurate information about when deals will be closing. “Accurate” is the operative word here because what most salespeople give their managers is their best guess of the dates on which they would like their sales to close. Then, when deals don’t close in that timeframe there is always a “good reason” or some excuse as to why the deal hasn’t closed.
Closing is not about the salesperson or your company. It is about the customer and their needs and timeline. When salespeople get ahead of customers in the sales cycle, they usually predict the close without any input from the customer at all. They seemingly pull a date out ofthin air or assume a date that allows them to make quota that month. What they rarely figure into the forecast is the close date has to come from the customer. It is the date the customer is ready to buy, as it is almost impossible to force someone into closing a deal when he or she is not ready. If something weird should happen and salespeople actually force the close, they usually find themselves in a very bad position and often that customer will probably never buy from them again. Worse, the customer may tell others about the situation.
The most common reasons deals don’t close are:
- The competition comes in at the end with something “better.”
- Something at the customer company has changed (that no one knew about).
- The budget was appropriated to another project.
- The possible sale was fiction – the salesperson was clueless and it wasn’t going to close in the first place.
- The salesperson (or someone at your company) did something to irritate the buyers.
All of these can really be summed up in one word, “position”. Your salesperson was not positioned well enough to completely understand the buyers and their needs, including timeframe. Positioning is the key to closing and positioning depends on many factors, the customer’s budget, budget cycle, needs, attitudes, accounting practices, decision making policies and let’s not forget the competition. It is the salesperson’s job to ask questions to uncover all of the information needed so he or she can get well positioned. Who are the decision makers involved in this sale, is there a budget established, what is the procedure for procurement, what is their attitude toward your solution, what is the competition for this sale is it an in-house solution, another vendor or using the money for something completely different?
Asking good questions and listening is the only way that I know of to combat the realization that “Oh, no, it’s not going to close”. Sales managers need to coach their salespeople to uncover and gather the information needed to be well positioned. This is the only way to get an accurate close date from the customer and/or to get information first hand if that changes.
Questions like these need to be asked early in the sales cycle: What is your timeline for having this purchase completed? When do you need this to be up and running? When do you want to have this installed? The answers to these questions will help the salesperson start a timeline that will allow him to help the customer get what is needed. If a customer wants something installed or up and running by a certain date the salesperson can help them work backwards from there to understand the timeline for signing the contract.
Other important questions are: Who else beside yourself will be involved in this decision? Will we need approval from any other departments? Are there others you would like me to talk with about the product and how it will work? These questions are important because what holds up a deal many times is that the key contact working with the salesperson is not the final decision maker and has no authority to proceed. They may be waiting on approval from someone that is unknown to the salesperson and so the deal doesn’t close. Knowing early in the game all the people involved in the decision gives the salesperson a chance to get to know the others and their views. Often, it also allows the salesperson to bring in management to get better positioned with the decision makers. It is very rare these days that any one person at a company would make a buying decision of any size on their own, so salespeople must be coached to find all of the decision makers.
For salespeople to know where they stand and what they are up against in a sale, they should ask questions like these: What do you see as my competition for this sale, other vendors, and in-house solution another use for the same dollars?
Keep in mind that most of what you do to be sure a deal closes has to be done early in the sales cycle. When the deal is stalled at the end it most likely is too late. That is not to say a deal can’t be saved at that time, it is just much harder and the probability of success is lower. At this point salespeople have to be coached to go back and ask tough questions such as these: This deal was moving along and it looked like we would close on this date. What has happened to delay that? What did I miss in the decision making process? It appears to me that something has changed and I am not aware of what that is, can you help me understand?
Closing should not be a big deal. If you have a solution that a customer wants, at a price they are willing to pay and understand their needs and timeline, then your sale will close. It will close when the customer is ready for it to close and you will have a happy customer that will more than likely buy from you again and become a good referral source. Closing: It’s all about the customer.
