As the end of a quarter, or financial year, approaches it is vital to be aware of the number selling days left and to plan carefully how to use the time to close the forecasted deals. In this insight we cover the seven key factors that will affect closing deals.
The closing deals plan
Now is the time for laser-like focus on closing deals. Account plans, whilst essential, are too broad and complex and just not suited to the task of closing deals in a short space of time.
Closing plans, by direct contrast, have the singular objective; to drive all actions and tactics to winning a transaction by a deadline date.
The seven key elements of a closing deals plan are:
- People
- Business case
- Process
- Technology
- Risk management
- Negotiation
- Time & urgency
Let’s examine each of these.
1. The people factor
The number of decision makers needed to approve a purchase rises in step with a worsening overall economic climate. Their voting intentions, for or against the deal and who they seek advice from must be understood. A more basic factor is when people plan to take holidays. It sounds simple to manage but one that, if ignored, can prove fatal to success – everything approved and ready to sign but a key person is away on vacation.
2. The business case
Have we proved it is more costly or risky for the customer to do nothing than approve our deal? This question should be the test of all deals. Bearing in mind that the benefits and value that a new solution is expected to deliver, need to exceed the risk of change by 3x or greater. The customer’s fear of change to a new solution must be acknowledged and solved.
3. The buying process
In long and complex sales campaigns, and with the demands of forecasting, it is easy to become fixated on your sales process and look at transactions from that perspective; this is a huge mistake but one that is often made. Too little attention is paid to the customer’s buying process. This results in a failure to understand the precise steps in that buying process and typical elapsed time between steps. Many large enterprises have such complex approval procedures that even your sponsor may be unaware of it, unless they have sponsored a similar value and type of transaction before.
4. Technology issues
These can range from approval that the solution is:
- Compliant with the customer’s I.T. strategy
- Able to scale up to the needs of the customer at peak demand times
- Approved to integrate with existing systems and has a resourced, costed and time-bound deployment plan.
5. Risk management
A key and dynamic part of any closing deals plan. Key, because failure to have “gamed” different risk scenarios, and defined contingency responses, will mean when those risks become real, a knee jerk reaction will make the matter worse.
Dynamic, because as the transaction nears the date of final approval, the type of risk will change, and so contingencies need to be adjusted accordingly. In my earlier insight about deal coaching, I described the idea of carrying out a “pre-mortem” – this means, today, assume the transaction was lost and discussing based on what is known today why. From that, contingencies can be better designed to neutralise the threats and risks.
6. Negotiation
Will need to be planned carefully, starting by anchoring the cost of the solution to the value it will add to the customer. Either the top line growth, or the efficiencies that will lower the customer’s bottom line costs or the compliance it will enable with market / government regulations.
Agreement on concessions, and who has the authority to agree them, is essential to avoid the customer exploiting divisions in your team, resulting in the transaction dropping in value, or “accidental” acceptance of unfavourable contractual terms.
7. Time and urgency
A sale will always be competing for decision makers time with other issues, in large enterprises never assume that all decision makers are aware of the urgency. Equally, it is critical to agree with your sponsor the key dates for what has to be approved, and by who. It is vital that all decision makers are aware of both the savings, and added value, in the business case. Will each decision maker directly benefit from the solution or will they support the purchase an overall benefit to their organisation? Is the cost, and risk, in delaying a decision to buy defined?
With a short precise closing deals plan, which addresses these seven areas, that is based on a set of binary questions, the probability of successfully winning a transaction before the end of the year, will be increased significantly.
If you’d like a copy of our A-Z closing deals plan please contact us.