Sales Training Article: Sales Cycles – Planned or Random Activities?
By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company
Managing salespeople is a very challenging job. One way to define a manager’s responsibility is trying to ensure sellers are working on opportunities they have realistic chances of closing. In many instances, managers have to look at opportunities from “disqualification” standpoints because most sellers are over-optimistic and seem to take comfort in the quantity of opportunities in their pipelines. Managers have a higher focus on the quality of opportunities.
A frequent qualification question managers use (as I did years ago) is asking salespeople: Has budget been approved for this initiative? For a complex B2B offering it is difficult for buyers to get numbers accurate enough to go through the budgeting process as there needs to be a detailed assessment of their needs, requirements, scope, implementation efforts, professional services, etc. that will affect what the total cost of the offering will be.
Given this scenario, if the seller has been told the buyer has already secured budget, it appears safe to make the assumption that another vendor has been involved, shaped requirements and provided a firm estimate that was used to allocate budget. In CCS® vernacular there is a favored vendor (Column A) and other vendors are being brought in with a worst case being they are primarily there to empower the buyer to get the best possible price from Column A.
I came to realize a far better qualifying question for sales managers to use would be: Whose numbers did the buyer use to secure budget? The best answer is that the seller provided planning numbers that were plugged into the budget toward the end of the previous year. If the seller doesn’t know how the budget was secured, then it is logical and best to assume another vendor’s numbers were used.
In my experience, unless a company is in bankruptcy or is in the public sector, if budget is a problem then the seller isn’t calling high enough in the organization. That doesn’t mean that organizations have unlimited funds, but if a seller presents a strong business case, decision makers often have the ability to reallocate funding that had already been committed. This amounts to another seller getting a “no decision” outcome in either being told the purchase will be deferred until next year or the organization decided not to move forward.
Once attendees in sales training workshops understand the difference between being Column A vs. Column B, I’ve posed the same question for over 20 years: Over the last several years, in what percentage of you wins did you start out as Column A? The answers I’ve gotten average out to about 80%. I think this causes several conclusions to be made:
- “In-basket” selling when buyers who are already looking invite sellers to be involved will likely yield low close rates.
- The alternative to waiting to be contacted by buyers that are already looking is to find buyers with latent business needs.
- If companies aren’t looking, no budget exists for a seller’s offering.
- When doing bus dev, sellers should target Key Player levels that are high enough to take budget earmarked for other offerings.
A seller’s quality of life and win rate are far better when they initiate opportunities at high levels and begin buying cycles as Column A.
Take a look at the sales training workshops available to you.