In my previous blog – Your Guide to Accurate Sales Forecasting, I discussed general principals to follow to accurately forecast your deals.
The question then becomes – what questions do I need the answers to, in order to determine when my deal will close?
I’m not a fan of scripts or checklists, but I do acknowledge that you need to start somewhere if you’ve never forecasted before – so here’s the general idea of questions that you need to answer in order to determine how soon your deal will close:
- Do they have a need?
If their organization has something in place today already, and they don’t really like it but it’s meeting their needs, they likely aren’t going to make a switch anytime soon. Switching software is a huge investment of time and money and unless there’s a significant reason why what they are doing today isn’t working, they won’t be buying in the near future and are likely just information gathering. - Do they have the money?
Of course to buy software you need money. Money that could be spent on many other things within an organization. Have they allocated funds to this specifically? Is there potential to allocate that money to a different project?
This one is tricky because often times the person tasked with initial outreach for software hasn’t really been given all the information, so you may need to continue to touch base on this one lightly throughout the sales cycle, and if they don’t know, encourage them to find out – it’s highly likely that they would very much prefer to not be spinning their wheels on a project that isn’t going to happen anytime soon either. - Do they have the resources?
Depending on the type of software you are selling, your client will need internal resources to implement it. Sometimes a ton of resources across the business. This is a large issue today in most organizations. They can have all the interest in the world, and then your deal fizzles at the end because they aren’t able to execute in the near future. - Do they have the buy-in?
Purchasing software requires buy-in from across the business, at all levels. Your client is likely driving the project within the organization but there are many other voices that matter. Do you have the right people on board? Do you know who’s opinion matters and what they think about your software and your company? - Do they have a champion?
Hopefully your client is the champion for this project and is pushing it along internally within the company. This is key to progressing your deal and overcoming barriers as they come up in the sales cycle. If your primary contact you’re working with is not your champion, make sure you find them! - Do they have an existing relationship with your company?
By they, I mean anyone in the company who is a decision maker or who has influence in the buying process. Deals far down the sales cycle can be lost because the CEO had a bad experience in the past, for example, and kills the project. This is important to uncover early so that you can tackle any frustrations/objections/perceptions about your product that may not be favourable well in advance.
Lastly, listen to your client. If you have a strong relationship with them, they should be fairly honest with you about when the most likely start date for the project can/will be. Usually they have been working within that company for some time and they know how fast/slow things go and how decisions are made within the organization.
Often times on forecast calls I hear things like “they say they need it in the new year, but I have a great deal on the table to buy before December”, with a forecasted close date of mid December. That’s not when they want it – that’s when you want it. If they are telling you the new year, listen to them. I’m all for negotiation and offering the client a better deal if price is actually the determining factor of why they can’t buy this year (often it is not), but until you hear a “yes, I agree – lets change the timeline to this year” that deal shouldn’t be pulled forward yet.
Once you have all the questions you need to know, the next step is knowing how answers to these questions impact your forecasting. If they say ____ then it’s upside vs. probable, for example – but that’s for another blog…..
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