Managing Sales Cycles To Increase Win Rates

'Many of our potential customers have reigned in spending’ complained the sales manager of a software company selling to the major financial institutions.  ‘It is not that we are losing business to our competitions, it is that more and more buying decisions are stalled’, or delayed he explained.

The turmoil in the financial markets has certainly had an impact on IT investment plans among the big banks, however how the company managed sales cycles also contributed to the number of stalled decisions.

Working with the manager and his team a range of opportunities were identified to improve the management of sales cycles, including:

• More thorough pre-qualification – it was clear that the sales team did not have a full understanding of budgetary and timing factors in all cases
  
  
• More extensive coverage of the buying unit – the sales team was relying on just one or two contacts in the buying organization
  
  
• More systematic needs analysis – in many cases there was insufficient information to complete a business case for the buyer
  
  
• Ensuring more time is spent with the prospect in order to fully understand needs, build relationships and demonstrate commitment - the amount of interaction with the buyer before submitting a proposal was limited
  
  
• Uncovering, with buyers, latent business needs and helping them to create a compelling business case for their resolution with your solution.  In other words, sellers can't rely on buyers knowing exactly what they want, or need.  They must generate awareness of the need, rather that simply serve a ready made demand for their solutions. They have to dig beneath the surface to uncover new problems and educate buyers to needs and solutions that they may have previously been unaware of.  
  
  
• Reducing buyer risk – there was limited use of low risk pilots, scoping, or phased projects that would make it easier for clients to commit
  
  
• Identifying and accentuating points of pain – in most cases the sales team had not helped the buyer to create a compelling case for buying now, as opposed to later.
  
  
• Helping the buying organisation to structure its buying decision making process, including clarifying requirements, criterion, information requirements, etc.

Why purchase decisions get stalled

Sales people often complain that 'sure thing' purchase decisions are increasingly getting stalled – often at the last minute.  It is all the more frustrating because salespeople feel there is nothing that can be done about it. 

However, looking beneath the surface there are reasons why buying decisions get stalled and things that we, as salespeople, can do to avoid all our hard work being 'put on ice'.

Situations change – the customers priorities, needs and budget have changed and this has caught the sales person off guard.

Failure to proved the value – that is quantified the benefits and in particular gained agreement as to the business impact of the solution.  The sales person did not present a sufficiently compelling reason to buy at this time.

Getting ahead of the customer and failed to notice that he/she was falling behind.  You failed to interact sufficiently with the customer, or to incrementally build commitment and gain agreement throughout the sales cycle.

Don't surprise them!  They did not see or agree to what you were proposing and what it would cost before you submitted your proposal. 

Failure to talk to the right people – or to systematically covered the buying unit.

The leap to be made by the customer is too big – the level of risk on the part of the customer might have been reduced by means of a pilot, a phased approach, etc.

Win, Lose, or worse of all Stalled!

There was a time when the worst that could happen to a salesperson was
that he, or she would lose the sale. But, even more dreaded are those
sales cycles that are stalled.

A stage cycle gets to the stage where a salespeople needs closure.
That is a definitive yes, or no, that would enable him, or her to move
on. Instead it is a 'not now', 'we are still evaluating what to do',
or worst of all there is a deafening silence from the prospect.
For many sales people the stalled sales cycle is worse than the sales
that is lost.

Today's buying decisions are more complex – they involve more people,
information and stages. That means it is more difficult to predict
what deals will close and when. Once more in a time of great
caution, owing to the slowdown, gitters in the buying organization can
easily derail a sure thing sales deal.

A sales person and his/her team may have been working on a sale for
many months, getting all the right signals from the prospect and
increasingly confident that the deal will close. Then all is laid to
waste, with the moment of the buyer stalled and so often the
salesperson helpless on the sidelines to do anything about it.

There are a myriad of factors that can cause a sale to get stalled and
some are beyond the ability of the salesperson to control, or perhaps
even anticipate. However, it is important to say that the number one
reason for stalled decisions is a failure among the buying
organization to match the purchase with a key business imperative, for
example cutting costs, driving sales, etc.

The number two reason for stalled decisions relates to the sales
approach and in particular the sales person getting ahead of the buyer
assuming that he, or she is following. Hence the importance of;
gradually building, gauging and seeking commitment consistently
throughout the sales process, ongoing prequalification (in terms of
budget, timing, etc.) and working closely with the customer to
establish needs, implications and the ideal solution.