It’s hard to admit defeat. And I find that to be especially true for sales people. In case you are wondering, I’m not immune to this weakness either. All sales people want to believe that they never lose deals and wouldn’t that be nice if it were true. But we have to be vigilant in reminding ourselves that sometimes we miss the mark and won’t win every time.
In countless sales meetings through the years, I would listen to team members give a myriad of reasons why a particular deal wasn’t moving forward to close as reported in the last 6 or more meetings. Even though the rest of us could see the truth, my poor deluded sales rep could not. They just kept hanging on for dear life insisting that “one day” this baby would close. Maybe so, but at what cost?
Research by CSO insights suggests that only 46% of forecasted deals actually result in a sale. Clearly, a reality check is needed. I’m not a forecasting expert, but I am pretty sure that you cannot trust sales people to accurately predict sales pipeline on their own.
Here are 5 reasons why you can’t count on sales people to know the difference between opportunities that could lead to a sale and those that don’t:
- They are overly optimistic about everything. This can be especially true if they received an inbound call from someone who appears to be expressing interest in their product or service. Or they think that because someone downloaded a free anything means that they are a potential buyer.
- They hear what they want to hear. The buyer is saying our budget has been slashed by 20%, so we are evaluating our business priorities. Sales person hears, “Your product is the best we’ve seen and our budget cuts won’t affect you.” These sales people have no idea what the important business priorities are because they’ve done no homework whatsoever. They just assume that their product will top the list of projects that the customer will invest in.
- They are notoriously bad at disqualifying opportunities. They do not ask enough of the tough questions – if they ask any at all – that would get to the heart of whether or not it makes sense to spend more time with this person or company. They need to ask things like: Is there some burning initiative inside the company that is driving this opportunity forward? Has budget been established for the project? Where is the customer in the buying cycle? What is the timeframe for deciding? How many people will be involved in the decision? What are the decision criteria? As my colleague Jason Wesbecher told me in a recent interview, the next best thing to getting a yes is a fast no!
- They think getting an appointment to do a “demo” means a deal is in play. Listen, when the Sales VP pushes you off to the Sales Ops guy that doesn’t mean she thinks your product will actually benefit her business. It means she doesn’t know who you are; you haven’t given her any reason to believe that you have something of value to offer her, and she’s busy and just wants to get rid of you.
- They think that anyone asking them for a proposal means they have a shot at winning business. Listen, I fall into this trap myself, and I know better. If you have little to no relationship with someone and after a brief chat they want a proposal, I’ve concluded that it might be better to say no. That no can be followed with questions referenced in point #3. Proposals take time to put together and the last thing you want is for someone to use your proposal to negotiate a better deal with a competitor. I know this happens, because it has happened to me!
In the quest to meet our quota and revenue goals, it is tempting to turn a blind eye to the truth. Man up! If you find that you are not closing 50% or more of the deals you really believed were winners, seek out some coaching. Talk to someone objective who can help you look carefully at the opportunities you think have merit. Admitting you made a mistake isn’t a bad thing, but chasing phantom sales deals is!