Is this sales opportunity qualified? Part 2.
By Bill Stinnett, Author of “Think Like Your Customer”
Click here for the first part of "Is this sales opportunity qualified?"
Unless we have a clear understanding all of these elements we have not fully qualified the deal, because many of these can significantly impact the close-ability of the opportunity. It is very common to discover that your buyer hasn't yet considered all of these things. But, to conduct a bullet-proof sales campaign, you'll want to understand all of these variables and many more.
Opportunity
If your prospective customer has the motive to buy and the means to buy, you can provide them the opportunity to buy. But, we should only do so in proportion to their motive and means. In many industries providing a client the opportunity to buy involves a significant investment on the seller's part. Beyond time and effort - both of which cost money - there may be travel required, products to demonstrate, proposals to prepare, and reference clients to talk to or visit. There could easily be a dozen or more people involved. An investment of this kind should be approached the same as any other investment, by carefully weighing the possible risks verses the potential rewards.
Understanding your prospective client's motive and means will involve a little research, and asking a whole lot of questions. But, having the information with which to analyze and prioritize opportunities, and thereby optimize the investment of valuable resources, is well worth the work to collect it. Once collected, we can use this information to communicate the "quality" of an opportunity throughout the organization to everyone who needs or wants to know.
The Manager's Perspective
Why are sales forecasts so unreliable?
Ask any sales manager and they'll probably tell you that they would love to be able to forecast sales revenue more accurately. Many managers struggle with getting a true understanding of which deals are likely to close and which ones are simply wishful thinking. At some companies, forecasting has become more like "fore-guessing" or "hope-casting" and with all the uncertainties of today's marketplace, the problem is getting worse not better .
The root cause of poor sales forecasting is usually not poor salesmanship, more often it is the lack of a good method for forecasting, or the existence of a bad one. Forecasting by "gut feel" or "seat-of-the-pants" is a major contributor to the consistent sale of antacid and headache medicine, but it usually does very little to accurately anticipate the sale of our own product or service.
Many companies use an inferior or outdated forecasting methodology and some have no formal forecasting process at all. They ask their salespeople to, "Tell us what is going to close," and when their people don't "commit" enough business, they ask them to "commit" additional business that is nowhere near closure. In this manner, some managers set themselves up to be disappointed, or even worse: surprised.
The most effective sales forecasting methodologies are based on the observable milestones of the customer's buying process. Note that these are not milestones of our own sales process. Actions we take or activities we engage in may actually do nothing to move a deal toward closure. Checking the box next to "Delivered the final proposal" might make us feel good, but it probably won't increase the likelihood that the sale is going close.
What an accurate forecast considers is, "What are the steps that the client must take to execute this contract or place this order, and what do we need to do to enable them to take those steps?" This requires a lot of research and questioning, but good sales forecasting should be less soothsaying and more investigative reporting. If what we discover suggests less forecast-able business than our quota requires, then at least we know where we stand. Most managers would agree that they'd rather know where they are, than make believe they're somewhere that they're not.
Where can you find more up-to-the-minute information and research on sales and selling techniques?
Kevin Hogan
Network 3000 Publishing
3432 Denmark #108
Eagan, MN 55123
(612) 616-0732
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