Losing deals stay in a sales pipe more than twice as long as winning deals. To be a winner, start by failing faster.
[Editor's Note: Repost from Selling Power Magazine.]
Want to win? Then make it your mission to lose quicker. It’s hard not to agree that sales, by its very nature, is a highly human-centric endeavor. All good salespeople know intuitively when a deal is going to happen, and conversely, when it isn’t. Yet that internalized knowledge rarely, if ever, becomes institutionalized, meaning it never gets into the system of record or CRM application. This creates a huge barrier to improving sales performance.
The data speaks for itself: looking at a knowledge base of deals assembled from a variety of companies and industries and totaling more than 10,000 opportunities, the numbers are striking. Winning deals on average took only 75 days to close, while losing deals took 175 days to close out ― 100 days longer. During those additional 100 days, management, sales ops, finance, and all sorts of other ancillary groups in the enterprise spent time/cycles on evaluating what, in essence, the sales rep knew all along. The time has come to fess up.
It can no longer be acceptable to maintain an opportunity in a pipe beyond its sell-by date. Moreover, accurately predicting sales opportunities is way too important to leave to a rep’s gut or hunch, as the outcome directly affects the entire corporation. Much of a company’s asset allocation, budgets, and resources are set based on their sales reps’ predictions. Unfortunately, current predictions from sales are more like wishful thinking than science. Or worse, like hide and seek. The reason is simple: humans process this data intuitively and don’t have the time nor inclination to open the kimono and show the proverbial powers-that-be an honest assessment of a deal’s potential outcome.
This culture of bravado makes cleaning a sales pipe nearly impossible. Yet what can only be described as losing fodder must be cleaned out of the pipe if an organization ever hopes to leverage its investment in the sales process. Thus, the trick to winning is to find a way to allow for a clear quantitative assessment of the pipe and clean it so that your best people across your organization are available to spend precious resources, time, and cycles on the deals with the highest likelihood of winning. Yes, you need to become Mr. Clean.
The key is bringing modern science and technologies together using big data and analytics to better predict sales outcomes far in advance of expected close dates. The goal is to create an intelligent, predictive approach to business-to-business sales by 1) determining patterns based on actual company and buyer business behavior, and 2) analyzing that information in order to increase communication between colleagues and more closely link management to sales teams with the goal of closing deals faster and more efficiently, without arduous manual effort.
Since many studies show that salespeople are spending less and less time selling, the absolute essential ingredient to success here is to ensure that any effort does not add manual steps to the sales-reporting process ― more key strokes, clicks, needless processes, or internal meetings will only result in less productivity, not more. And since the essence of the social enterprise is, well, social, then something needs to change to allow salespeople to spend more time with the right customers while capturing the very essence of a productive deal cycle ― one that yields a positive outcome.
Thus, the trick to better resource optimization is to automate the process of updating activities without entering information and give management complete visibility into the sales process without relying on a weekly interrogation. All of this empowers a sales organization to fail much faster ― and win much more.