For now, let's define a stalled opportunity as an opportunity that hasn't seen a change in status for a specific period of time . (You get to define the length of this time period.) If you want to apply a more demanding definition, you will find some useful suggestions in the article,
" Sales Process - We're Only As Good As Our Next Step". (attached)
Reason #1 – Poor Sales Opportunity Qualification
A sad fact of life is that many salespeople do a poor job of sales opportunity qualification. Why is this such a common problem? Basically it comes down to three factors: lack of training, lack of accountability, and lack of inspection . Let's look at each factor separately.
1a. Lack of Training
What is your company's definition for a fully qualified opportunity? Does the definition exist in writing? Are your salespeople trained to qualify opportunities in a specific way?
In my opinion, a sales opportunity has not been properly qualified unless the salesperson knows (at minimum) the answers to the following questions:
- What business problems does the prospect have that can be solved by one or more of your company's products and services?
- How significant are these business problems? In other words, what impact do they have on the prospect, both professionally and personally?
- Can the prospect quantify the impact of the business problems? In other words, can they associate dollar amounts with the business problems?
- Is the prospect worthy of the investment required for your company to manage a sales cycle? In other words:
- Are they credit worthy ?
- Do they have a budget to invest in solving their business problems?
- Are all key decision makers engaged in the decision process?
- Does the company take proposed investments out to bid ? If they do, are they willing to give your company some advantage in the bid process as a reward for designing the solution to their problems?
- What is their time frame for implementing a proposed solution?
Accountability pertains to creating and communicating clear expectations for sales performance. If your company does not have clearly defined performance expectations for salespeople, or if those expectations have not been communicated to (and ingrained in) your salespeople, you are likely to be disappointed with the results they produce.
To determine whether your company is truly holding salespeople accountable, do your best to answer the following questions:
- What percentage of each salesperson's sales leads will be generated by your company's marketing and advertising efforts?
- What percentage of each salesperson's sales leads are they expected to source for themselves?
- What are the primary prospecting methods that your salespeople are encouraged to use?
- How many "discovery conversations" (first meetings, whether in person or on the telephone) should a salesperson book with new prospects each week or month?
- What percentage of a salesperson's sales should come from new business?
- What percentage of a salesperson's sales should come from repeat business?
- How long should the average sales cycle be for each of your company's products and services?
- What percentage of their opportunities are your salespeople expected to close?
- At what point is an opportunity considered to be "in trouble" (which means it should immediately be brought to the attention of management)?
- Who decides whether an opportunity is "lost" ?
- How are lost opportunities (and the reasons why they were lost) tracked?
Sales opportunity inspection involves sitting down with salespeople on a regular basis (I recommend weekly) to discuss the status of every opportunity in their pipelines. These discussions should have two goals:
1. To determine whether each opportunity has been properly qualified
2. To determine whether each opportunity reflects an accurate status
NOTE: Don't worry – this is not as time-consuming as it might appear. Once you slog through the initial pipeline discussion and help the salesperson clear the "deadwood" from their pipeline, future discussions are much more streamlined.
How do you determine whether an opportunity has been properly qualified and reflects an accurate status? By asking questions! The sales manager should ask the salesperson the same questions that the salesperson should ask their prospects . If the salesperson does not know the answers to key questions, or if their answers lack key details, the salesperson should be assigned specific opportunity qualification tasks to complete prior to the next pipeline review meeting.
Sales opportunity inspection is truly a critical sales management activity. Why? Because companies waste incredible amounts of time, money and resources on opportunities that can't or won't close! The sooner these (poor quality) opportunities are identified and removed from the sales opportunity pipeline, the sooner your salespeople will have more time to invest in finding truly qualified opportunities!
Sales Process - We're Only As Good As Our Next Step
by Ed Ellis
No sale can be counted upon unless the prospect is actively engaged in the sales cycle. What does it mean to be "actively engaged"? This is defined by the prospect's willingness to commit to a next step.
What is a valid next step?
A valid next step is a specific, scheduled appointment with an agenda designed to move the sale closer to "closed". The appointment may be in person or via the telephone, but it must be on the prospect's calendar. Plus, the salesperson must have an agenda to advance the sale, not merely check the status of the prospect's decision process. Finally, the purpose of the call cannot be to schedule a future substantive discussion.
While there is no guarantee that an opportunity that meets these conditions will close, the chances of securing revenue from an actively engaged prospect are far greater than the chances of securing revenue from a prospect that refuses to commit to a next step.
It is human nature for salespeople to maintain unrealistically hopeful feelings regarding contacts who are willing to talk with them on a regular basis. Often they concentrate their efforts on these contacts under the guise of "relationship building." Unfortunately, most relationship building is nothing more than the passage of time.
If discussions and meetings are not specifically designed to advance sales opportunities, they usually are not very productive. So, while salespeople should maintain positive attitudes, to be successful they also need to be very realistic.
Salespeople can use this simple rule to validate whether or not a prospect is truly "hot"
| At the end of every prospect meeting, the salesperson should determine if there is a reason to meet again. If there seems to be a reason to continue, the salesperson should attempt to schedule the next appointment BEFORE leaving the meeting. |
This approach has two advantages:
- If a prospect is truly interested in moving forward, he or she will readily grant the salesperson more time and schedule it in his or her own calendar. If the prospect does NOT want to continue the sa or she will hesitate to schedule more time.
Too often a prospect will say, "Call me next week to schedule our next appointment." This is often used as a way to get the salesperson out of their office. Every salesperson has experienced prospects saying these very words, then not returning telephone calls the following week.
Some salespeople are reluctant to ask for a next step for fear that the answer is going to be "no". These salespeople are only creating false hopes, which do NOT generate sales.
- Putting a next appointment on the calendar before the current meeting ends ensures it can take place in a timely manner. Why is this important? Schedules can fill up, even if the follow-up scheduling call takes place just a few days later. By scheduling the next appointment before leaving the current appointment, a salesperson can come back to the prospect in the shortest possible time. The benefit of this is shorter sales cycles.
It is important to emphasize that next steps need to be structured to productively advance a sale. A scheduled visit to "check the status of things" or to "see if they are willing to consider our company" is NOT a valid next step!
Additionally, any scheduled next step must be within the normal sales cycle. A prospect that agrees to receive a call on a date outside the normal sales cycle cannot be seen to be actively working toward a purchase (though of course these calls DO deserve follow-up).
When these "Next Step" rules are followed exactly, it is not unusual to see that just a small percentage of the opportunities currently being worked by a sales team meet the criteria. This is entirely intentional!
The simple truth is that prospects for which valid next steps have been scheduled have a much greater likelihood of purchasing. These are the "real" opportunities. Tracking the number of "real" opportunities in each phase of the sales cycle will tell managers whether salespeople have enough potential business in their current pipelines to ensure future success.
By categorizing opportunities in this manner:
- Salespeople and managers will be able to separate reality from fiction and opinions from fact
- Managers will be able to assist salespeople with the prospects that truly matter
- Managers will be able to set salesperson prospecting activity expectations at a level that will ensure sufficient concurrent "live" prospects to produce consistent success
- Salespeople and managers will be able to provide more accurate forecasts
Remember, time is your only inventory!
Don't waste your time chasing prospects that are not serious about buying your products or services. Use the "next step" test to validate whether or not an opportunity you are pursuing is a REAL opportunity.
If the prospect is willing to schedule a next meeting on a specific date at a specific time with a specific agenda for advancing the sales cycle, you have a real prospect. If your prospect is not willing to make this kind of commitment, you need to question how serious they really are...and spend more time finding real prospects!
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