Originally published in Forbes
By Randy Illig
When I was the CEO of an IT services company, we were struggling with a piece of business in a perpetual stall. The client appeared eager to buy, but for some reason we couldn’t figure out why they couldn’t get the decision made. As the sales person pushed the deal back from quarter to quarter, it was wreaking havoc on his forecast.
While I was visiting this client with the sales rep, I took out a simple tool we call the “decision grid” and started walking through it with the chief information officer. It became clear that there was only one step missing: gaining agreement for funding from the chief financial officer to whom the chief information officer reported.
So I said, “It would be important that we talk with the chief financial officer to understand how he would decide one way or the other. Is that something that you could arrange?”
He just stared at us for what felt like eternity. Then he got up, left the conference room, came back a few minutes later, and said, “We can meet with the CFO now.” So we had a nice conversation with the CFO, and he approved the funding on the spot.
As we were wrapping up the meeting, I turned to the CIO and said, “Just out of curiosity, I know this has been something you’ve wanted to do for months. And so have we. What prevented the meeting with the CFO previously?” And he said, “I’m new here, my budget is not yet approved and I just didn’t feel right about the timing until you brought it up.” We probably could have closed this months earlier if we’d had this little gem of information.
Slippage in the pipeline is a huge problem for most sales leaders. A deal that’s supposed to close this month moves to the next month, then the next quarter, then it’s pushed off to the end of the year. It causes massive confusion with sales organizations, because it’s difficult for them to predictably produce results when they’re not clear on when things are going to close.
One of the keys to having an accurate and predictable forecast is understanding exactly how the client moves through their decision-making process. All it takes is a very simple approach:
1. Determine the steps that the client needs to take in order to make a decision. We need the map and all the points along the way. So we would ask, “Could you help me understand the steps you’ll go through to make the decision?” The customer might respond, “We’re going to talk to multiple vendors, have an internal review, then invite the short list of vendors to come back for a deeper discussion. Then we want to review the solution in detail to make sure it meets our needs. We’ll do a budget review and then we’ll make a final decision.”
Because we have experience with other buyers , we can add insight if there’s something missing from the list: “I noticed that you didn’t mention a legal review. Does that belong on your list?” We’re not trying to add unnecessary steps by any means. But sometimes customers haven’t actually thought through their own internal process, and if they give us an incomplete picture, it might confuse our forecasting.
2. Get a sense of the timeline. When are each of these steps happening? The customer might say, “We’re going to make the short list this week, and the budget review by the end of the month” and so on. We need to know the timeline to spot bottlenecks and to make sure we can provide what is needed in a timely manner. Additionally, information about their timeline can shed light on when we should recognize revenue for this particular opportunity.
3. Figure out the “who.” Most deals involve multiple decision makers. For example when they’re talking to vendors and trying to figure out who to spend more time with that might involve someone from procurement, someone from the business unit, perhaps a subject matter expert. By identifying who is involved in the decision we will learn who we need to talk with. This might sound simple. But how many times have you lost a sale to a competitor or to a “no decision” only to find out that someone you didn’t know, and therefore didn’t talk to, made the call?
4. Identify their decision-making criteria. If there’s one rule in this process, it’s this: Get the “how” from the “who.” Do not make presentations to people whose criteria for judging you is unknown to you. Remember that the unique individuals in the “who” often have different criteria, even if the criteria is published formally in an RFP. I’m sure I’m not the first salesperson who’s encountered an RFP with criteria that wasn’t actually used to make the decision. What we’re after is an understanding of the real criteria from the unique individuals in each one of those steps.
If we’re working with the premise that selling is helping clients succeed, this process helps customers get what they want in a way they value and want to repeat. The purpose of having the information in these four steps is to align our proposal to the criteria the customer cares about most.
With these guideposts, maybe you can stop that proposed sale from sliding from quarter to quarter and off the table altogether.