If you are a salesperson, your only mission is to get the pony out of the barn (i.e., close the deal). But according to several recent studies, including one by market research firm CSO Insights, getting to the pony is becoming harder and harder. CSO Insight’s 2011 “Sales Optimization Management Key Trends” report shows that almost 25 percent of deals forecasted to close resulted in a “no decision.”

Even worse, no-decisions have increased 26 percent over the last five years. This number also correlates with a reported closing rate that has declined almost 12 percent over the same period. The questions are:

  • Why are “no decisions/losses” increasing?
  • As a sales leader or CMO, what can you do to reverse the trend?

As a first step, consider how you can achieve the following:

  • A proper sales-target segmentation and qualification process
  • Well-defined and documented sales stages
  • A stringent sales pipeline management process

Proper sales target segmentation and qualification process. I strongly advocate that you spend the time needed to identify which prospects fit your firm the best. It makes no sense to go after accounts that don’t fit your perfect prospect profile (unless you are planning on entering a new market segment). Spend the time to profile the accounts that you work well with today and go find more of the same.

One way to determine your perfect prospect is to use a sweet-spot matrix. This can help you to categorize prospects as best fit, neutral fit or weak fit. Once a prospect is properly classified, you can focus your time on high probability targets and away from those prospects who will be hard to sell and service. Non-sweet-spot prospects dramatically reduce your closing rates for obvious reasons.

Well-defined and documented sales stages. By clearly defining prospect stages and customer activity/behavior, you reduce the likelihood that your pipeline will become overinflated. Standardized sales stages also help reduce no-decisions because it clearly illustrates when a prospect goes from suspect status to qualified status. Many reps will call a deal qualified even before a prospect agrees they have an issue and are willing to evaluate a proposal. Those need to be kept out of the qualified pipeline.

Stringent sales pipeline management process. Now that you have a good methodology to accurately assess your sales pipeline, how do you know when a qualified opportunity goes cold? There are always reasons why decision timelines slip, but when the decision timeline slips significantly or continuously it either needs to be restarted or called a loss.

Often these no-decisions result when opportunities forecasted to close start to age well past your normal sales cycle. When that happens, the closing probability falls as well. As an example, if you’re normal sales cycle is six months and the opportunity has been on the pipeline nine months or longer you should strongly consider moving it backward on the sales phase chart. Maybe there are new decision makers or priorities have shifted. If so, you may have to revalidate and resell your solution. Taking this conservative approach will keep your pipeline accurate and your numbers strong.

Stay focused on the pony in the barnnot on the dead horses!

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 Dan Hudson is the co-founder and president of 3forward and has a B2B sales and sales leadership background of more than 30 years. He can be reached at dan.hudson@3forward.com.