Ever since I was promoted to sales management in the late ‘90s, I’ve been confronted with the measurement of weighted pipeline and forecast methodologies.
Cut Your Time Spent on Forecasting in Half One of the most painful and time intensive tasks as a sales leader is driving an accurate forecast. Leaders spend up to 40% of their time collecting and qualifying the forecast. Lengthy labour intensive Friday forecast calls, reps complaining about wasted time, frustration on poor deal qualification Read More
When I first started out as a sales manager, I had a pretty good close rate – with one record quarter after another.
Until one devastating quarter… where almost 50% of my team’s deals either slipped or were lost for good.
It crushed us.
We couldn’t make any sense of it. After all, we hadn’t done anything different.
I spent days trying to find out what went wrong… until my manager pulled me aside and asked me one of the most eye-opening questions of my career:
Rizan, in all the deals that slipped, how many of them did you meet the Economic Buyer?
The answer was clear:
After a quick check I was able to find a direct link between meeting the Economic Buyer and whether we won or lost the deal.
In today’s article, we cover:
- Just who the Economic Buyer is (and why he’s so important to your deal)
- 3 actionable ways to get access to him (or any other VIP)
- How to get him to sponsor your deal (and increase your deal’s chance of closing to 90%)
Today, we’re onto Part 4 of our series on How to Effectively Close More Deals.
The next step is the glue that binds your whole sales campaign together. It’s what justifies the purchase and convinces the Economic Buyer sign on the dotted line.
That’s right, I’m talking about Metrics.
Here’s an in-depth look at what they are, how they will help you close more deals, and why you never want to miss out on collecting them…
A former boss of mine once said:
“Collecting metrics is like collecting money.”
You either need them to justify the cost on your deal or you need them to win new clients.
But what exactly are Metrics?
Metrics are the quantification of a pain.
They measure what would happen in case your client decides not to do anything.
They are the answer to the First Why:
“Why should your client do anything?”
In other words, we measure the client’s current state (before purchase) and future state (after purchase/implementation), then quantify the benefits.
Metrics that customer clients typically value are based around Cost Reduction, Risk Avoidance and Gaining Revenue or Market Share.
Here are some examples:
Raviga Corp. is running 300 server systems.
Current state: They have 15 people working fulltime (Fulltime Equivalents, or FTEs) to keep the systems running and up-to-date.
With a systems management solution, Raviga can automate a good part of the daily recurring jobs. That would free up their IT staff to run the systems with just 5 FTEs.
Future state: A cost reduction of 10 FTEs, or $500,000 per year.
Intersite generates $10 Mio. in annual revenue.
Current state: 10 maxed out insides sales reps create leads by hitting the phones hard, without a lot of room for improvement.
Future state: On a trial with an automated lead nurturing, reps are able to produce 30% more qualified leads.
With a 40% close rate, Intersite could close an additional $1.2 Mio. annually.
Start collecting metrics early
It’s important to collect metrics from your very first calls.
The more you understand the state of your customers’ business now, the more you can help them envision how things could be.
If you wait too long and the deal enters negotiations, customers tend to shut down and focus only on price. At that point, it’s too late to discover additional metrics that will help move your deal along.
So, now that we know what Metrics are, how exactly do we put them to use?
How Metrics Help You Justify Costs
In times of Black Fridays, banking crises, unstable economies and shrinking budgets, prospects need to justify every investment more than ever.
In fact, it’s not at all unusual these days for clients to require a clear ROI within 12 months or less.
That’s why the #1 reason for slipped deals is that the client decides not to do anything, and chooses to stick with the status quo.
You may have achieved a technical win, but when it comes to executive sponsorship and financial approval, the deal stalls.
Here’s a real life example:
It was end of Q4, and we had 1 week left to close one of our biggest deals.
We’d had a tough quarter, but one of my best sales guys had a deal that would take my region to 110% and the rep to 160% on yearly achievement.
Since we already had a relationship with the client, we went in with armed a great Champion, a strong pain and a solid personal interest.
Things were going well, so our Champion arranged one final meeting with the finance team.
That’s when the hammer came down on us.
Instead of finalizing the deal, the head of purchasing said that the deal was not approved.
His reason? The ROI wasn’t clear enough to the board.
We were completely shocked.
To us, the benefit was so clear to that we never thought about doing a business case.
And even though the use cases were strong, they weren’t tangible and understandable enough for a finance board, who needed to base its call on hard facts and figures.
That was a big mistake.
Because metrics can be collected on every sales call, technical event or on formal value assessments, there’s no reason to ignore them.
How Metrics Help Keep Your Margins High
Since the burst of the dot-com bubble, selling to IT departments has only gotten tougher, year after year.
These days, purchasing managers request at least 2-3 competitive offers, and slam these against sales people during negotiations (even when you have a unique offering).
But great salespeople always make sure they come armed and ready to secure the value.
Again, it comes down to having the correct metrics.
I once had a very competitive project where my closest competitor dropped their price by 70% below our offering – just to compensate a weaker product.
Competing with 3X the price is not a good place to be in.
But we felt strong about our offering and didn’t want to engage in a price war. So we called an internal meeting to find a way to keep the margin and still win the deal.
We came up with all kinds of things – adding more products and services into the deal, adding more users – when our sales operations guy stood up and said:
Why don’t we quantify the difference to the second best choice?
The room went silent.
We had collected so many use cases, benefits and metrics that we had hard facts (metrics) why our offering was the right choice.
So we gathered all the metrics we had been collecting on a flip chart and confirmed with our Champion that they were tangible and unique to our offering.
When we went back to the customer, the discussion on price turned into a discussion on unique benefits – allowing us to keep our price and win the deal.
How Metrics Help You Generate Pipeline
Not only are Metrics powerful tools to negotiate a deal, they are just as powerful in your first meetings with leads.
Because prospects love to discover how their competition and industry is performing so they benchmark against them
That means you should be using real use cases with tangible metrics to bridge with your prospects and open the doors.
John Kaplan from Force Management calls these “Proof points:”
Proof on how a customer could benefit if he’d think about solving a pain point.
Great salespeople know this, and collect as many relevant metrics as possible from existing clients in order to:
- Educate and challenge their client’s position
- Establish themselves as a trusted source of advice.
In fact, I knew a rep who would get a next step 80% of the time after a first call – simply by challenging his prospects with metrics from their competitors.
Metrics are one of the most reliable ways to speak your customer’s language and close the deal.
Without them, you run a much higher risk of delays or having a weak position during price-negotiations.
After all, you have to know what’s in it for your clients. And you absolutely must be able to quantify the benefit.
Always make sure you know the answer to the question:
Why should the client do anything?
And always make sure you have the numbers to back up the answer.
So, if you haven’t already done it, go to your existing clients right now and find out the quantitative difference your solution has made for them.
Doing so can a massive impact on your future close rate.
There is no deal without a pain.
Pain is the driver. The ultimate reason why customers will act and buy your solution in the end.
It may not be obvious to begin with, but there is always a trigger that gets decision makers buy:
Something they need to solve, grow, improve, or reduce.
However, too many sales people don’t know what the real pain is or how to find it.
In this article, we’ll cover exactly what qualifies as a real pain, what doesn’t, along with real world examples of pain points that were strong enough to close a deal.
Here’s how the MEDDIC sales qualification process can help you hit a 90% close rate by keeping your focused on the fundamentals of a deal.
In 1973, UCLA basketball Coach John Wooden created sports history.
That was the year he became the first coach in any sport to win 7 national championships in a row.
He ended up leading his team to win a total of 10 championships in a 12-year period, with an unparalleled 88-game winning streak.
So what was it that set him apart from every other coach that came before (and after) him?
One simple thing:
Sales methodologies are a dime a dozen these days, with each one promising unprecedented growth and revenue.
However, we all know that to successfully close large and complex deals, it’s essential for sales teams to have a more structured approach and focus on the right steps to bring deals to closure.
That’s why we’ve reviewed 9 of the best sales methodologies for closing large deals. We looked at the content, the delivery and the offerings to effectively implement the methodology in the field. (And in case you’re having trouble convincing your team to adopt a methodology, check out How to Handle Your Reps’ Objections to Your Sales Process)
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