Yes, you read the headline correctly. In 2015 the average win rate of forecasted deals was a meager 45.8% according to data provided by CSO Insights, a division of MHI Global.1
The statistic is not pretty and it’s not one that sales representatives, managers or vice presidents would like to defend. Why is the win rate so low? Is this a systemic issue or isolated to a specific region, industry or group of sales professionals?
When forecasted deals fail to close it’s generally because of one of the following occurrences.
- Another project or projects has taken priority and financial resources have been reallocated.
- It’s too early in the decision process and the buying team is making slow or no progress.
- The ultimate decision maker hasn’t found any solution to fully address the problem at hand.
- All of the buying influences haven’t been identified and someone with high influence is delaying the final decision.
- Someone within the decision making organization sees a personal loss from moving ahead with your solution.
- From the buying team’s perspective, there is no clear documentable ROI to warrant change.
- An external and well respected buying influence has suggested the buying team look elsewhere.
- There is no internal sponsor able to convey a sense of urgency and drive the decision making process.
- It’s a delaying tactic designed to force you to lower your price.
- The sales representative is nowhere near being as well positioned as he/she thought they were.
Points to Consider!
Consider the following questions in developing your strategy to mobilize a stalled opportunity:
- What financial, operational or administrative events may have deflated the organization’s commitment to change? As important as you think your initiative is to the buying organization, your customer’s business is dynamic and his/her priorities can change quickly. It is important during every sales call to ask, “Has anything changed since our last conversation?” And, “Is this project still a priority for everyone?”
- Have you mapped the buy-sell process including measurable actions required to move the buying process from stage to stage? It is common for sellers to find themselves charging forward while the buying team is still trying to understand fully the nature and scope of their needs.
- Have you correctly identified the ultimate buyer and gotten his/her buy-in to your solution? Does the senior buyer require a business case? How does your solution link to a key performance indicator on his/her dashboard?
- Do you have a methodology to help conduct a strategic analysis of complex selling opportunities? Have you identified compelling strengths that differentiate you, your product/solution and company from the status quo? Have you identified and mitigated all of the danger signs?
- Have you calculated and shared the cost of “doing nothing?” Often it is easy for buyers to overlook the full breadth of costs incurred by internal and historical solutions.
- Are you asking the right questions to uncover the size and scope of the buyer’s needs? How comprehensive was your “discovery” process?
- Are you adapting your value message to resonate with each buying influence? Are you using their language to capture their perceptions? Does the value message address their business and personal goals?
- Have you conveyed a sense of urgency? Does the buying team understand the cost of a lost opportunity? Have you presented a strong case for risk-free implementation of your solution?
For sales managers and executives, there is a short list of reasons why funnel-to-forecast accuracy is so low. When we see these alarming conversion rates it suggests several areas for an in-depth review.
- Selling team members are uncomfortable contributing to customer dialogue in the early stages of the buying process.
- The CRM may not have been adapted properly to accurately portray success factors.
- The selling team may lack a common sales methodology grounded in best practices.
- Opportunity and funnel reviews are done sporadically with no consistent format or cadence.
- Sales representatives have “happy ears” and only hear what they want to hear from the buying influences.
- Sales managers don’t ask the tough questions and provide the timely coaching required for sellers to drive buying activity.
- Discussions to eliminate the “status quo” and risks have not occurred.
As always we welcome your thoughts and input. Let’s start a discussion and elevate the sales profession with a thoughtful, civil and informative discourse.
- CSO Insights: Sales Performance Optimization Study & Key Trends Analysis 2015.
Subscribe To Our Blog
Join our mailing list to receive the latest news and blog updates from our team.