Guest post by Caleb Donegan.
Have you ever asked a salesperson why they missed their sales quota? Have you ever received a single and straightforward answer as to why this occurred? Probably not.
You are far more likely to receive an abundance of responses than a single, overarching reason. Answers may include:
- “The contact left.”
- “The funding won’t be there until X date.”
- “Marketing is not getting me enough leads.”
And any number of other reasons why certain deals didn’t close.
They may be true, false, or somewhere in between, but the fact remains that the salesperson missed their target, and a fix must be introduced.
There should be no problem with receiving many answers to this inquiry, either, as there are many reasons why deals go awry. With such a volatile profession and the reliance on the status quo within an organization to which you are selling for that deal to close, it’s no wonder closing ratios are small. Many factors may have been at play throughout the sales process, but that cannot be an excuse for losing out on business.
Finding the root cause
When you lose a deal, it is very easy just to shrug your shoulders and walk away. However, by taking this approach you are losing out on an incredible opportunity to learn what to do better next time. Every lost deal provides insight, even if it’s where you messed things up.
Was it a price issue, functionality, sales tactic or perhaps timing that made you lose the deal? Obtaining the answer is vital. You need to take a chance to learn where you went wrong so that next time you can get it right.
This process of discovery can be an uncomfortable, one that will force you to correspond with a business that just said you were not good enough to earn them as a client. Leave your pride at the door and approach the situation as if you had won the deal. Remember: What you take away from the interaction will help you sell in the future.
As a sales manager, it’s important that your team go through this process and provide feedback on what they found. The more candid, the better, so this should be encouraged even if it means admitting fault. Encouragement of gaining this information is important and should be a requirement after any lost deal.
After finding the cause (or at least trying), it’s time to conduct a retrospective.
Belaboring the point that you lost is not the way to go, but not reviewing your approach to see how you can do better is pure laziness.
Look at the meeting schedule. Look at all past conversations with the prospect and if the correspondence was equal or heavy on your side. Look at the timing of events (calls, meetings, contracts, follow-ups) and if there were any patterns. All this information is valuable and could help to create a better roadmap for the next deal.
Most importantly, review your flow and stages of the sales process. When did you move them from initial needs analysis to prospect, and why? These items should all be available in your CRM and could be indicative of flaws in the process.
Understanding the flow and any possible gaps will allow for closer monitoring of other deals in the pipeline. If any items were missed, all other deals being worked should be reviewed to ensure proper hygiene.
Questions & support
It seems obvious, but many times the sale was not supported properly. This absence of backing can sometimes be hard to spot, and may not even be something the salesperson is aware they are lacking.
When the business is asking questions, are you sure they are getting the right answers? Are all the right people involved to ensure the answer is not only accurate but persuasive? This kind of support is integral, especially in late stage deals; if overlooked, it could spell disaster.
Properly addressing a question or concern, especially in technical sales, is as important as any part of the sales process. Empower your salespeople to call on the decision makers within the prospective company. Give them access to everyone that may be able to provide value, and coach them on when to get them involved. Asking for help should be embraced, not shunned.
Make tough decisions
Great salespeople make a lot of money, and there is a reason for it: It’s hard to be good in sales. Learning a product, creating a need, instilling urgency, negotiating terms and following through is a skill that few individuals possess. That is why the best salespeople are highly sought after and appropriately compensated.
That said, know when to cut losses. It’s far too common that underperforming salespeople go too long without producing, and managers make up excuses for their poor performance. Every day that you employ someone who does not produce is a day that you could have someone new bring in the next big deal.
However, if you use the tactics in this article, it will be easier to separate the bad from the good, and the good from the great.
- Get your team to provide specific reasons why deals do not close.
- Review all lost deals, mapping out areas of improvement, and make sure to implement those changes in your team.
- Review the state of your sales support and empower team members to tap into your company’s technical know-how.
- Integrate performance reviews, looking at the context and objective reasons for winning and losing deals.
If you're in need of some inspiration for hitting your sales targets, check out how other countries have performed after they implemented a sales performance management system.