Victorius businessman

What’s Your Buyer’s Closing Ratio0

By Tibor Shanto – tibor.shanto@sellbetter.ca 

While it is important to understand your personal metrics, mostly as a means of improving your use of time, and to develop an ongoing improvement process. While many know some of their metrics and conversion rates, few take time to explore and understand their prospects’ closing average or ratio. It’s easy to see why, you find yourself in front of what appears to a willing prospect, sharing what they want to do, why they are thinking of doing it, all while asking you questions that your manager taught you are “buying signals”.

Victorius businessmanInstinctively you feed the fire, figuring that the more information you provide and gather, the more your share with them, the more likely they are to finish their journey with you. All is good till the last scene, curtains close without a deal. Would have been helpful had you had an inclination earlier in the sale, when you may have been able to change the outcome. The change in outcome does not always mean a closed deal, but saved time, energy and refocus on better opportunities in your pipeline.

No matter how good things look, professionals in all fields know that the fundamentals need to be present no matter what the immediate circumstances look like. A key fundamental in sales is not just to understand the buyer’s buying process, but their buying habits or patterns.

No matter how bright and rosy things appear at any time during the cycle, it is important to confirm and validate. Failing to do that leads to a familiar situation for us all, i.e. no deal at the end.

How & Why

This is where asking two specific type of questions, from a couple of different directions will give you window the buyer’s buying habits, or let’s be real, a prospect’s “kicking tires” habits.

The Why

The why – as you’re are going through the Discovery process, ask why they choose the current thing (product, service, etc.) you are exploring with them. What they respond is important, but more interesting is how they respond. Someone involved with the decision will have not just more details, and as a result lay out more dots, but will also be able to tell you why those dots connect, and how they prefer them connecting. Someone who was tangential to the decision will deliver the same headlines, but no detail. Someone involved in the decision would describe things in first person terms, while those who were not, say implementers, will use third party description. You will also see who was able to drive a decision, and who could not; in the case of the latter, listen for who internally they blame for the decision, (or lack of one), those are the people you should pursue to connect and bring into the current cycle.

You will also get a window into how progressive and early to adopt they are, or are they the type that wait second or third iteration of a technology.

The How

Now that you have a sense around how they deal with their “whys”, why change, why that, or more like why not, it is time to turn to how they select based on the why.

“So now I understand why you chose to go with that kind of database, help me understand how you selected ACME Corp as the vendor?”

Much like above, you will be clearly able to tell if they were in the thick of it, or someone that was not invited to the offsite where the decision was really made. People may want to embellish, but you will be able to have a good view wit the right questions.

The reality is that everyone will paint a positive picture in the start, even the “Brochure Scouts” sent to gather information. Exploring their role in past similar decisions will help you gauge their closing average, which has a direct impact on yours.

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The Right Pipe Equals Options22

I had a call from the rep in a quandary; she had a client who was running her around, being very demanding and at the same time being less than straight with her.  Having worked with her in the past, I know that she was not prone to panic so this had to be a real problem for her.  The challenge or problem for me was that I saw her predicament as different from the one she saw.

As we continued to discuss the sale, I felt that there were a number of things she could try, but was it really worth her time, effort and emotion?  While the opportunity was a sizable one, it may not be worth the aggravation, especially if it does not happen; if there were integrity issues now, they are likely to continue and so will her strife.  So I asked “maybe it’s time to walk away, move on and work on something else and revisit this another time?”

She confided that she can’t, because they were one of only a handful of prospects in her pipe (four really), and this was the largest.  This is what I felt the problem was, not the buyer’s attitude or demeanour.  You can’t always change people, and there is really no way to determine what is behind their stance.  But you can always turn to other prospects and move forward.

It was clear to me that her challenge was that she needed to close this deal if she was going to make plan.  Looking at her track record in the last few quarters, she had a conversion record of 25% of those opportunities at Discovery stage.  Of the four currently in her pipe only three were at Discovery, even if she closed her belligerent client, she would be short of quota, and would need to close another deal, even if it was small.

In past quarters she always kept an eye on the front end of the pipe, she traditionally allocated enough time to prospecting to have at least 10 real prospects on the go, which gave her a cushion based on her conversion rates.  Q1 was good and bad at the same time.  Good: she landed a couple of big deals, doing that kept her busy, and when she was able to Engage with the client in question she felt it would help her maintain momentum into Q2.  Of course, this was before the prospect in question grew fangs and talons.  Bad: because of the above she got a bit and cocky, and stopped Proactively Prospecting, to make sure the deals closed in Q1, and because she was distracted by the potential size of the opportunity in question.

While it may sound overly simplistic, a proportionally filled pipeline gives you options.  Proportionally means packed with the right things, not everything.  Just stuffing it is no better than having too few opportunities in it; you don’t want to clog your pipeline and have an “Opportunity Arrest”.  You do want to have a blended pipe based on size, length of cycle and other factors, one being enough opportunities to deliver the number of deals you need based on your conversion rates.  For an easy way to determine this read Working Backwards From Your Goal To Get Ahead.

As a not so wise short New Yoker once said, even the best sales rep can’t do his thing without a prospect.  The challenge our friend was having is if she walked away from the opportunity in question, she would have virtually no prospects.  Instead, she was faced with some bad choices, put up with the client’s crap knowing that it was her only hope to salvage the quarter, and knowing that they were bound to become a problem client.  She could forfeit the quarter, not good for career or rent. 

Alternatively she could prospect really hard between now and the end of the week and hope to close something by next Wednesday. Sure.  Not only do we have half the city out of commission due to the G20 meeting here in Toronto, but July 1st is a holiday and half of Toronto will disappear mid-day Wednesday.  She could always offer discounts to the other three prospects, but that would just be stupid, right?

At the end we agreed that this will be avoided in the future by ensuring that she did in fact have the minimal number of opportunities flowing through to ensure that she can make rational decisions rather than being forced to make emotional choices for the wrong reasons.

We also agreed that she would meet with the prospect in question, and professionally discuss what she sees as “obstacles” and ask the client to articulate where they are, and in the process either clear the air and have a productive prospect, or make the unfortunate choice of walking away.  Keep you posted.

What’s in Your Pipeline?
Tibor Shanto

Value Propositions – Sales eXchange – 5226

I always struggle with the phrase and the delivery of “The Value Proposition”.  I understand what is meant when people use the phrase, and what it purports to do, but in most instances, usually due to execution, it just ends up being a pitch, a higher quality or level pitch, but a pitch nonetheless.

In many cases the “the value prop” by nature are canned, are developed by marketing; while they may include input from ‘focus groups’ or actual clients, they are usually devoid of direct input from the actual prospects the sales reps is Engaged with at a specific point in time. By virtue of that fact it negates or limits the Discovery process so necessary to real Engagement and specific value the buyer may or may not realize.

This is not to say that sellers should not be aware or know the value they offer, and delivered to buyers, it is a question of how they use it in the process of a sale to specific buyers, rather than assuming that the same proposition will mean the same value to all buyers.  The balance many sellers try to achieve while executing the sale, is one between presupposing and pitching and using their knowledge to Engage; to entice the buyer rather than overwhelm the buyer.

This is especially a risk early in the process when the seller is usually ahead of the buyer in their respective processes. While the seller sees and is genuinely excited about the possibilities, the buyer, having been approached may still be trying to weigh factors to see if they should Engage or not.  At times we proceed to hit them with our “value prop” way before it is time, before they are ready or Engaged.

A better use of the knowledge of how we can deliver value is to use that knowledge to create questions that will drive the Discovery process and lead the buyer to the same point in their buying cycle that we are at in our selling cycle.  Use the understanding of the value to develop questions that establish our credibility, and our expertise, so we can be seen as a resource by the buyer.

There is also the reality of self-discovery by the buyer; no, not discovering one’s self; but discovering by themselves how valuable our solution is based on their specific circumstances.  We have all heard the statement: “Knowledge is the biggest barrier to learning”.  So if we enter into the sale knowing the “value prop”, it may leave little room for “learning” the specifics of each individual buyer. While there are likely many similarities, there are also differences between buyers, not the least of which that each buys in their own way. By taking your knowledge and using it to create questions that involve and Engage the buyer, you’ll do a much better job of asking the type of questions that will get the buyer thinking, and give them the sense that you are an expert because “you understand” as demonstrated by your questions as opposed to you canned “value prop”.

What’s in Your Pipeline?
Tibor Shanto

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