Research shows that less than half of all forecasted opportunities will close. A recent survey by CSO Insights found that 23.6% of forecasted deals typically lose without a decision and another 30% lose to the competition.
The good news is that there is something sales managers can do to improve these statistics by working more closely with salespeople to impact sales strategy and earn rates early enough in the process. Organizations with a consistent sales strategy and training practices experience 10-15% better success rates than those without. But if coaching produces such great benefits, why don’t most sales managers do it more often? It has to be a habit, a discipline.
in his book The score takes care of itselfBill Walsh, Super Bowl-winning coach of the 49ers and a contributor to the Harvard Business Review, said that if you managed recruiting, training, coaching and strategy, you would get good results most of the time.
Whipping a forecast is driving in the rearview mirror. By then, it’s too late. Sales managers who have a sales strategy and process for hiring, training, and guiding a deal as it evolves position themselves and their reps to win much earlier in the process—and qualify for bad deals sooner.
The closer you get to winning, the closer you also get to losing.
Most forecasting systems and sales strategy methodologies have a built-in flaw that ignores three main forces on deal outcomes. If you lose each deal with a percentage based on the phase you are in or the activities that have been performed, you are planning a forecast error.
This approach ignores the impact of competition, politics, and the source of urgency on the decision-making process we call “the melting pot.” It is often an emotional and dynamic committee decision that is beyond logic at this point. If you haven’t prepared for this early in the sales cycle, be prepared to hopefully lose or win. And we shouldn’t be paying vendors six figures for luck!
Unfortunately, ignoring the competition and politics in your complex sales strategy is where you lose half the channel. But how can managers coach salespeople to get through this process and pick the battles they can win?
More than “how much and when”: why managers don’t train enough
In our experience working with hundreds of sales organizations around the world, many sales managers are top performers and have been promoted to manager. But what made them great salespeople doesn’t necessarily make them great sales managers.
In complex sales, the stakes are high and the transactions are complicated. Divided camps break out late in the game, issues change, deals stall, competitive counterattacks emerge, and new players enter the scene. If you get bad news early enough, you can qualify or change your sales strategy, but few salespeople have the critical information they need in time to make this decision unless their manager pushes them in a deal strategy review.
Top 12 Sales Strategy Mistakes Most Salespeople Make
Based on our experience, there are 12 common mistakes that most salespeople make today in their sales strategy, resulting in wasted time and lost revenue:
Mistake #1: blind spots and assumptions
Many salespeople don’t understand the customer’s strategic pains, the decision-making process, or the root causes of the pains. They assume that because the customer is being nice to them, they must be the preferred provider.
Mistake #2: Wrong people
Selling too low and talking to the wrong people in the sales process is another common sales strategy mistake. Sellers tend to stay in their comfort zone and sell to those who are already sold rather than those who can actually close the deal. The key is to figure out whose votes you need, and then get them on your side as soon as possible.
Mistake #3: Political Strategy
Each person on the purchasing committee has a different amount of power and plays a different role. Within their sales strategy, sellers need to identify the key players and how they can influence their vote or live without it. The most effective tool in selling is a stakeholder analysis that identifies each stakeholder’s pain, power, preference, part, and plan. If salespeople don’t have this level of information, they’re watching what happens, not making it happen.
Mistake #4: There is no competitive strategy
It is essential to anticipate, predict and be able to neutralize the competition. How do you plan to win? Who is helping them? What do they usually say about us? You must be able to strategically differentiate yourself and demonstrate how you best solve their challenges.
Mistake #5: Missing Losing Signals
There are many signs that a deal is out of control: canceled meetings, unreturned calls, new requirements late in the process, no access, etc. If sellers can pick up on these signals fast enough, it’s time to change the sales strategy. The sooner you realize a deal is out of control, the better your chances of turning it around.
Mistake #6: Happy Ears
A positive mental attitude is an important quality of successful salespeople, but it can also cloud critical thinking and sales strategy. Sales managers have to ask critical questions and challenge assumptions to predict what could go wrong before it actually does. You don’t want bad news at the end of the game.
Mistake #7: Poor team leadership
Everyone who touches a deal must understand the policy and history of the deal and their individual role and action items. Salespeople need to see their job as a leadership position and it is the job of the sales manager to dig in and find out what is going on before it is too late.
Mistake #8: Tactics don’t match strategy
Often salespeople do things in “reaction” mode or because someone asked them to when it doesn’t contribute to a win. Salespeople don’t get paid to be busy, they get paid to be effective. Matching your selling style to the buyer’s individual personality style results in better relationships, bonding, and overall alignment.
Mistake #9: bad rating
Many deals end before they even start due to a bad solution, a bad cultural fit, or a lack of urgency. How to effectively qualify deals will differ for each agent and company. Ultimately it depends on your chances of winning, the resources needed to “buy the next card” and what else you have in the pipeline. Determining qualification criteria upfront takes emotion out of the equation, allowing sellers to qualify on the bad deals and instead work on the ones they have the best chance of winning.
Mistake #10: Coaching without Deal or Strategy Reviews
Companies that do this well are simply more successful. However, most sales managers say they don’t have time to train or don’t think training is their job. Instead, they spend their time supporting weak sellers, bailing out weak deals, or working on deals that are out of control instead of mentoring deals before they get out of control. Having regularly scheduled sales strategy sessions with reps allows managers to help review strategy to ultimately win deals.
Mistake #11: No closing strategy
In this economy, navigating the approval process can take as long as the decision-making process. Buyers have become much more powerful and sometimes are better at buying than sellers at selling. Vendors should document their differentiators and update their stakeholder analysis on latecomers, including additional executives, IT, acquisitions, finance, and legal. ROI alone will not seal the deal. Consider your sales strategy: Your solution must be a political pain or gain for a powerful person who will push it onto the CFO’s desk.
Mistake #12: No Plan B
When new information emerges, retest your sales strategy. Issues change and power struggles over priorities arise as stakeholders move closer to making a decision. You should always have a Plan B (and C). If you try a sales strategy and it doesn’t work, there may not be time for a meeting. Flexibility and agility are critical.
What good coaches do
Most sales managers claim they don’t have time to train, but consider all the deals you and your reps have worked on that came in second. If you close 50% of your businesses, that means 1,000 hours per year per rep are wasted. Zero income. Even if you close 75% of the forecast, that means each rep is only wasting 500 hours per week. Why? They sell more because they don’t have a winning strategy because they don’t take 30 minutes a week to plan their sales strategy with their manager. And the sales strategy is much more than how much and when?
Often, if a sales manager had been involved in the first place, they could have helped the salesperson take control of the sales strategy earlier. Those managers who make a conscious effort to consistently coach their teams will see results and have a positive impact on both revenue and turnover. A good coach can objectively view a deal and provide the critical thinking needed to improve the sales strategy.
Coaches can help salespeople pick winnable battles and then give them the motivation, encouragement, and confidence they need to close the deal.
Remember: second place pays zero. Ask the hard questions in your sales strategy, and eventually your reps will start asking them themselves. The consistency with which you do so is the key to competitive advantage.
