If Albert Einstein was to do sales he would do them like this. Probably.
I have read a number of articles about sales velocity and how to increase it in order to win deals faster. Sales velocity is a measure of how fast you are making money, how quickly leads are moving through the funnel and how much revenue new customers provide over a given period. This can be very insightful on a macro level, looking at the whole pipeline. Emily Bauer from Marketo described the formula for Sales Velocity as:
(For those with a nervous disposition towards mathematics please look away now)
Sales Velocity = (Number of Opps X Av deal size X Close Rate) / Av Sales Cycle in days
Based on the traditional eighty-twenty rule however 80% of your revenue will probably come from just 20% of your opportunities. What, therefore, do we need to do at a micro level, or deal level, to influence these must win opportunities?
This sub set of important opportunities tend to be the bigger or weightier ones, typically, but not always, from your larger strategic prospects. Intuitively in the profession of Sales we know when a deal is going well and equally when it is slowing down and even stalling. When a deal is going well it seems to have a momentum which is influenced by a number of factors. It appears to me that per key opportunity, Sales need to be laser focussed on its’ “momentum”.
Classical Physics describes momentum as the mass of an object multiplied by its velocity. The size and strategic importance of an opportunity (including how well qualified it is, supporters, timing, budget, compelling reason or event etc), is analogous to mass or gravity. The velocity of an opportunity, it appears to me, is how quickly key events that need to occur to get a deal closed (such as a demonstration, a proposal, legal review, proof of value, executive alignment etc), are actually being achieved. Just like in Physics this combination of deal gravity and deal velocity gives us the important deal momentum.
Sales professionals have the ability to influence the momentum of a deal in a number of ways. Just like the boy periodically hitting the top of a tyre with a stick to keep it rolling on, Sales people need to intervene at key stages to keep the deal moving forward. Keeping the momentum is vital to increase the probability of a close.
How do we do this in the most impactful way? Well, before we can even consider that question, we need to be able to visualise all of the key components of the opportunity. How well is it qualified, what are the key sales/buyer events or steps and where are we in respect to their completion? Also important are questions such as who are the people that can makes something happen and how do they interact with us and with each other? Once we have this overall view, we can optimise our approach. This information is typically kept in what some people call a Sales Execution Plan or Close Plan.
Not every opportunity really needs a detailed Close Plan but for the sub set of deals that will bring in the majority of your revenue having one would make a lot of sense. It would also make sense to have some standardised format. I have seen examples using Powerpoint, pen and paper, spreadsheets, black & Red books etc. All are valid, but today we can look at excellent tools that not only give a 360 degree view of the opportunity but also allow Sales to work collaboratively with the wider team to get the clearest and most accurate view. Of course, nothing stands still, qualification is a continuous process throughout the sales cycle and the dates of key events move as do people, so the Close Plan tool needs to be able to monitor and manage the dynamic nature of a sales cycle.
One of the great challenges of Physics is developing a general theory that combines Einstein’s general theory of relativity and the quantum world. Something that governs both macro and micro. Recent scientific discussions seem to indicate that interactions are central to explain how things behave both close up and at a distance. (We in Sales of course have known this to be the case for some considerable time!) Interactions between ourselves and our prospects and interactions between individuals in a prospect organisation is the other important ingredient. Whilst most of these interactions do not significantly propel the deal forward, a few have a dramatic impact. They can give us a quantum leap forward and significantly drive close rates.
So, for me. Deal Momentum = Deal Qualification x Event achievement speed.
And importantly Close probability = Deal Momentum x activities with key influencers.
In practical terms the visualisation of an opportunity in a Close Plan should allow you to use Deal Scorecards to continually answer key questions that show how well qualified a deal is. Close Plans should allow you to use Gantt or Kanban views to visualise all the key sales events. They should also have organisational mappers to understand the key people and influences around a deal.
For example, a key sales/buying event maybe “product validation” with a prospect. How many times have we had a deal slip or slow down because late in the cycle the prospect has asked for a reference visit or call? References are golden assets for most sales organisations and must be used wisely. However, they are not always easy to tee up quickly. So we should anticipate this request and pro-actively set something up earlier in the cycle. Of course, we would only do this on a deal that was of a certain qualification status and one in which we knew who the key influencers were. Using a valuable reference on someone who is not influential is like the boy hitting the bottom of the tyre with his stick! With a Close Plan of the whole deal as described above, we have a visual representation of the key influencers or decision makers and qualification status, and we can therefore ensure that this reference interaction has maximum impact.
Likewise, we have all been in a sales cycle when suddenly we hit a Black Hole, this is when things appear to be going well and suddenly email responses stop, and calls are not returned. We have entered what I would call the ‘Zone of Doom’. This is usually because we have few, or possibly only one, main contact with a prospect. This is a dangerous time as it often leads to bad or panicky actions. A Mapper will show Sales and Management of the pending danger of not expanding our relationships into an Account. Similarly, a mutual Close Plan, that is, one shared with the prospect, will also keep everyone from both side on track, thereby maintaining the momentum of a deal.
I will offer many more use cases for a Close Plan in future blogs, but in summary, a Close Plan is a visual picture of your sales process and the opportunity as a whole. It gives you a view of the deal velocity in terms of achievement against key sales/buyer events, it gives you a view of the deal gravity in terms of qualification status, which includes the deal value, and it gives you a view of how and who to interact with. Studies have shown that companies who follow a defined sales process have a much greater close rate and generate 18% more revenue than those that do not.
It’s not Rocket Science!