Well, for most of us we are almost halfway through Q-2. As you reflect on Q-1 you may come to one of the following conclusions:
- Q-1 was a good sales quarter. One down and three quarters to go to make my annual revenue plan.
- Q-1 wasn’t great but it wasn’t a total bust. I am behind plan but not by much. I can still make my yearly revenue plan.
- Q-1 was a disaster. I have a major hill to climb or this isn’t going to be a good year.
If you find yourself behind your YTD revenue plan here are the most probable reasons and some remedies to help mitigate them.
Most Common Reasons for Last Quarter’s Revenue Miss!
- Too Much Reliance on the Big Deal That Didn’t Happen
We have all been there. The sales opportunity is a whale. The revenue amount for this order will make this quarter’s revenue goal and perhaps even your year. You are so close to winning it. All the signs point to you getting the business and getting it this quarter. You spend most of your time on it and then Murphy strikes. The deal is delayed. Now you are in trouble because there is nothing else you can close at the last minute to save the quarter. You are now behind your revenue plan and your boss wants to know two things: “Why and What are You Going to Do About It”?
Mitigation Strategy: It’s tempting to spend all of your time trying to close the big deal but it’s a very risky strategy. You cannot put all of your eggs in one basket. Savvy sellers make their number each quarter by meticulously working their entire sales funnel. They ensure that they have enough opportunities ready to close that if one or more doesn’t close they can still make their quarter. This is the science of sales and it must be practiced religiously.
- Poor Funnel Management
Sales funnels come in different sizes and shapes. If your sales funnel looks like a Champagne Flute you’re in trouble. Not only won’t you make the quarter, the year is in jeopardy.
Mitigation Strategy: Key to sales success each quarter is having a balanced funnel where enough opportunities are at each stage of the customer’s buying process. Remember, customers buy when it is convenient for them and appropriate for their organization. They don’t care about your end of month, end of quarter or year-end unless you are offering something of value that will get them to issue a purchase order faster. Usually this is a discount or free goods.
- Poor Targeting
In every sales funnel there are three (3) types of opportunities: winnable, hopeful and unwinnable. When your sales funnel is heavily reliant on hopeful and unwinnable opportunities you are going to miss your quarter.
Mitigation Strategy: Develop a strong ideal customer profile and grade each new sales opportunity before you place it into your funnel. Then re-grade it each time you move it from one buying stage to another. This will not only ensure you are working on viable (winnable) opportunities, it will also help you prioritize your selling activities. Move unwinnable sales opportunities out of your funnel.
- Not Enough Time Spent Prospecting
It’s no surprise that most sales representatives love to receive leads but hate to prospect. The problem with not prospecting is that at some point the funnel is empty because you have closed or completed the selling activities on every opportunity.
Mitigation Strategy: The only way to avoid a dry sales funnel is to prospect. The best time to prospect is right after you have won a deal because you are on an emotional high and because you need to replace the opportunity that you have just won with one or more new opportunities. Don’t be afraid to ask for a referral from your client. Pick five (5) prospective accounts and customize an email to convey value to one or more key buying influences within each account. Use LinkedIn and other social media sites to target and network. Ask your clients for referrals.
These come in various sizes and shapes. The most common sales surprises are:
- Your find new buyers that you have not previously identified.
- You discover that buyers view your solution less favorably than you thought.
- You find that your value proposition doesn’t resonate with all buying influences.
Mitigation Strategy: Early in the sales process ask questions to uncover all of the people that will be involved in the purchase of your product, service or solution. Don’t just focus on the customers with whom you are most comfortable talking. Get out of your comfort zone and identify everyone. Ensure that you look for third-party influencers. Confirm frequently that you have correctly identified all of the key buyers. Position yourself with each individual and verify that you understand their business issues and the degree to which they prefer your solution. Classify them with a simple Hot, Neutral, Cold or Don’t Know.
- Inability to Move Buying Influences Out of Status Quo
When buying influences see no reason to change or they detect risk in deviating from the status quo, the “current state” looks like a safe haven. Doing nothing can become your most powerful adversary.
Mitigation Strategy: Savvy sellers show the buying influences that the current state is not a safe place to be. They document pending problems and paint a picture of a future state that is more beneficial. They do this artfully using illustrations, stories, examples and quantitative results that resonate with everyone. They make it uncomfortable to stay in the current state.
- Poor Understanding of the Buying Process
Every customer buys differently but the process that they go through is repeatable and understandable. When we fail to understand that the buying influence is either ahead of or behind the selling process, we have a total disconnect. When this occurs, our meetings are disjointed and our messaging is off kilter. We then often find ourselves dragging the buyer into a decision that may be premature or we provide information and insight that is too late for consideration.
Mitigation Strategy: As sellers, it’s our job to understand the customer’s buying process and map it in a way that we know where each individual is in their process. This provides us with the knowledge and timing to engage the individual in meaningful conversations that move the sale forward.
- Poor Discovery
Many deals fall apart because of a poor discovery process. It’s easy to fall into the trap of connecting your product, service or solution too quickly to fix an obvious problem, avoid a problem or to capitalize on an opportunity. The result of poor discovery is that we stereotype our buyers and the buying organization based upon our past experience and fail to see the challenge through their eyes.
Mitigation Strategy: Savvy sellers resist the impulse to make the connection too quickly. Instead they thoroughly understand the customer’s situation and what drives the buying process. They understand that most highly successful sales professionals methodically probe each buyer to understand fully each buyer’s unique perspective. These top sales professionals gather in-depth knowledge and then customize their message to resonate with each buying influence. They win because of their discovery skills. Without in-depth discovery it’s almost impossible to craft a compelling value message.
No one likes to miss a revenue number for the quarter. Repeated misses are not conducive to long-term employment. Savvy sellers understand the warning signs of a quarterly revenue miss and they take proactive steps to minimize those occurrences.
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