Being able to forecast sales performance is critical. If you don’t know how much money you are going to make in a given month, or how close to (or far away from) quota your sales team is, things can get dodgy.
Of course, forecasting sales involves a balancing act between gut feel and educated guessing. It’s not a science and there are a lot of variables at play. The fact of the matter is, since the sale isn’t made until it’s made, even deals that you think will close, might not.
When we asked sales leaders to name the main reasons that deals fail to close, here’s what they told us:
Aberdeen Group’s Andrew Moravick points out in his report, Visibility, Insight, Impact: Simplifying Complex Sales Processes with CPQ (free registration required), that some of these issues can be addressed with CPQ (Configure Price Quote) technology. This technology can certainly simplify deal structures and, if properly integrated with other enterprise systems, also provide insight into purchasing history that might otherwise be lacking.
On the other hand, no amount of technology can fix certain problems. If sellers can’t diagnose or control politics within the buyer’s company, then they need to get better at doing that (at least on the diagnose front – some things within the buyer organization will, naturally, be beyond your control).
By the same token, if competitive products are simply better, sellers either need to find buyers who don’t care about that, or they should consider going to work for the competitor (if you can’t beat ’em, join ’em, right?).
Is price ever the real objection?
As you can see in the chart above, and as you may even know from your personal experience, price was cited by 73% of survey respondents as the main reason “likely to close” deals don’t.
At first blush, this makes perfect sense. If the product or service you are peddling costs more than the customer is willing to spend, then the deal won’t close. You can’t get blood from a turnip; it’s just that simple.
Now, I used the expression “willing to spend” because I was taught long ago (when I went through the sales training offered by Linda Richardson’s company) that price is never the real issue. That is, it is rarely the case in business that you are having serious sales discussions and it turns out that the buyer organization just doesn’t have the money to make the purchase.
Instead, what it most frequently comes down to is the buyer’s unwillingness to part with the money they do have. If that is the case, and said unwillingness does not stem from the fact that they can get a better product at the same price elsewhere, then the real issue is this: your organization was not able to create a state of willingness in the buyer.
Can one create “willingness”?
Some believe that the way to address this issue is through value-based selling. To get there, marketing and sales need to work together to identify what customers truly value and then to craft messaging and conduct sales conversations that convince the buyer that your product or service is as valuable as you say it is.
But “value” is only part of the willingness equation. That is, someone can actually believe that a product is worth the money and still not be willing to buy it. Why not?
I think it has to do the fact that the decisions we make are not entirely rational. I would even go so far as to say that, in most cases, we make decisions based on emotions and then rationalize them post hoc.
This means that, when selling, we need to first focus on making someone want something before we convince them that it will be worth the expense to get it. And making them want something always starts with figuring out what they want in the first place.
To be frank, few people truly “want” a cloud-based AP/AR system or an efficient CPQ solution. What they want instead is love, prestige, and autonomy. At the same time they want to avoid privation, pain, and humiliation.
This means that the real challenge facing marketing and sales teams is not getting inside the minds of customers, but getting inside their feelings. Sellers, to the extent that they have one-to-one interactions with buyers, are in the perfect position to do this.
And those who know how to position the value of your solution as a path to what the buyer actually wants, will have know shortage of willing buyers.