There are two escalating pressures in today’s marketplace that are creating a need for a more disciplined approach toward sales opportunities: The need to be more specialized and individualized in dealing with clients because we can no longer afford to treat all situations in the same way, and the reality of competition.
Often to increase market share, you must do so at the direct expense of the competition. The competitive intensity of the sales environment is escalating with the globalization of the economy.
These are the main drivers behind the demand that organizations adopt methodologies and processes to manage these issues. By using a rigorous and formal opportunity assessment, we are aiming to achieve two sets of objectives:
- Determine which sales opportunities should be pursued at the direct expense of others
- Given resource limitations, decide where and on what basis resource should be allocated to a sales opportunity
- Determine whether our company is over-investing or under-investing in a sales opportunity
- Enhance forecast accuracy
- Use “proven” criteria to reduce the cost of sales
- Identify, quantify and categorize opportunity assessment criteria
- Increase hit rate (win/loss ratios) by avoiding unsuitable business
- Discover where we and our competition stand with a customer
- Gain a complete and accurate view of a sales situation prior to writing a sales plan to win
- Calculate the probability of winning or losing a deal early in the sales process
All sales professionals claim to be permanently time constrained — we always have limited time and resources with which to achieve our targets. We can be involved in only so many accounts or sales situations before we begin to lose our ability to manage what is taking place. At that point, we lose control and the competition takes control.
Why prospects don’t close
We can only control and manage what we understand and that is the real value of continuous and rigorous assessment of our pipelines. The reality is that at least 33 percent of opportunities currently residing within your pipeline will never close, for a number of reasons:
- You haven’t qualified it out rigorously enough, and there are buying issues that you are unaware of.
- You haven’t penetrated the “formal decision-making unit” and you are only dealing at “recommender” level — or worse, “user” level. As a consequence, you are relying on your contact(s) to sell your solution upward for you.
- You are merely “quotation fodder.” The customer’s buying process requires at least three bids, but they already have a preferred supplier, who will simply adjust their bid after the rest are received.
- This is a “desire” purchase and not a “must have” one, which means there may not be funding available.
- Budget has not been approved, and may never be. (Did you ask that question during your early qualification?)
- The requirement is dependent on them winning a contract with their client/customer.
- You will be outsold by a competitor who has superior solutions/price/selling skills etc.
- Your solution is not a perfect fit and you are hoping that this will not be noticed. Despite your very best efforts, it will be eventually, believe me.
- There are political issues involved which you have failed to identify. There are always political issues lurking somewhere in the background, waiting to trip up the unsuspecting and inexperienced salesman/saleswoman.
- The “psychographics” are wrong and this order is not winnable. You are out of your league, and despite your excitement at uncovering this opportunity, your company is simply not geared up to deliver such a large order. Eventually, the buyer will uncover your inexperience and remove you unceremoniously from the bidding list — after you have wasted weeks, even months working on it.
So, when you examine your own pipeline, can you identify those 33 percent? There are no prizes for having a pregnant pipeline; there are only prizes for closing business!
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