Quantum Leap for Enterprise Sales
In her post on sales velocity, Emily Bauer of Marketo outlined the formula to calculate as such:
Sales Velocity = (Number of Opps X Av deal size X Close Rate) / Av Sales Cycle in days
But if 80% of your revenue is most likely to come from just 20% of your opportunities, how do you know what to do at a micro level, or deal level, to influence these must-win opportunities?
This subset of significant opportunities tends to be the bigger or weightier ones, typically, but not always, from your more considerable strategic prospects. Intuitively in Sales, we know when a deal is going well as well as when it’s slowing or stalling. When a deal is going well, it seems to have a momentum influenced by many factors. It’s this ‘momentum’ that reps should focus on.
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 would be how quickly important events that need to occur to get a deal closed (ex: demos, proposals, infosec reviews, etc.), are being achieved. Like in physics, this combination of deal gravity and deal velocity gives us the critical deal momentum.
Sales professionals can influence the momentum of a deal in several ways; they just 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? Before we can even consider that question, we need to visualize all of the key components of the opportunity. How well is it qualified, the key sales/buyer events or steps, and where are we in respect to their completion? Also important are questions such as the people who can make something happen, how they interact with your reps, and each other. Once you know that, you’ll have a much easier time streamlining your approach. This information is typically kept in what some call a Sales Execution Plan or Close Plan.
Not every opportunity 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 standardized format. Today, sales tools give a 360-degree view of the opportunity and allow Sales to work collaboratively with the broader team to get the clearest and most accurate picture. Of course, nothing stands still—qualification is a continuous process throughout the sales cycle, and the dates of key events move, as do people. The Close Plan tool needs to monitor and manage the dynamic nature of a sales cycle.
One of the significant challenges of Physics is developing a general theory that combines Einstein’s general theory of relativity and the quantum world, which governs both macro and micro. Recent scientific discussions indicate that interactions are central to explain how things behave both close up and at a distance. Interactions between ourselves and our prospects and businesses between individuals in a prospect organization are the other important ingredient. While most of these interactions do not significantly propel the deal forward, a few have a dramatic impact. They can give us a quantum leap ahead and significantly drive close rates.
Deal Momentum = Deal Qualification x Event achievement speed.
And importantly, Close probability = Deal Momentum x activities with key influencers.
In practical terms, the visualization 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 enable you to use Gantt or Kanban views to visualize all the key sales events. There should also be relationship mapping to display and understand the key people and influences they carry.
Likewise, we have all been in a sales cycle when suddenly we hit a Black Hole when things appear to be going well, and suddenly emails and calls stop. That moment, affectionately known as ‘Zone of Doom,’ tends to happen when reps haven’t threaded in additional contacts that can help keep the conversation (and deal) moving forward. Relationship maps that visualize all the stakeholders involved, including their lines of influence, can help keep deals on track. Additionally, establishing a joint value plan shared with the prospect helps keep them engaged and committed, thereby maintaining the deal’s momentum.
While there’s no evidence that Albert Einstein would have been any good at sales, one can safely assume that if he were, he might have approached it with some of these lessons (and equations) in mind. Interested in learning more about the science behind sales? Check out our on-demand webinar on how machine learning and artificial intelligence are helping sales teams “move the middle.”