If you want to go from 5 – 6 Figures in sales, FOR REALS, you need to be able to predict how much business you are going to close in the year.
Most of us feel like sales are random. There are the deals
you’re SURE are going close – but they just never seem to get done. And then, there are those deals that come flying in from out-of-the-blue and close – that you just never expected.
No wonder it’s so uncomfortable when you’re meeting with your Sales Manager – trying to tell them the truth about how your sales are going and what they can expect for you to close.
I’ve got good news for you. There are ACTUAL ways to predict how your year is going to go!
WATCH: VP of Sales, Michael Maynes, break it down on The SellOut Show here.
The First Step is to “Know Your Stages”
Yes. this means you are going to develop a brand new relationship with your CRM, or your pipeline, or your funnel. (Sorry – it’s the thing every average seller hates the most – but the top 1%-ers live and die by it!)
Flip Your Perception About the Stages
Most salespeople think about stages from the actions THEY are taking (not what their customers are doing). To create a truly predictable pipeline, avoid the trap of thinking “If I try to negotiate” “If I send an SOW” “If I get more people involved in the sale”.
No! That’s YOUR journey as a salesperson.
The stages must be based on your CUSTOMER’s actions. Are THEY taking actions to advance the sale? Are THEY getting other people in their company involved? Are THEY asking for the contract?
That is the buyer’s journey.
Avoid The Most Dangerous Pipeline Predictability Destroyer
Happy Ears!
When you are looking at the pipeline from the actions that YOU are taking – you will develop “Happy Ears” – meaning you are just SURE the deal is going to close! But, it hasn’t closed the last two quarters, what’s different now?
When you look to what your customer is doing and the actions they are taking (and yes, you can even ask them what their intentions are) – THAT is when you know what TRUE stage your buyer is in.
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Assign Real Percentages to Your Pipeline Stages
These percentages are going to be different for every company, product, and sales cycle. Which means you are going to have to develop your percentages over time and track everything! (Sorry – again – it’s true! Not fun, but true!)
You must vigilantly monitor your stages to make sure you’re getting the real percentages right, too.
Until you have historical, data, here are some rules of thumb.
25% or Below: Until your buyer brings someone else into the sale to help make the decision, it is unlikely that the deal is more than 25% likely to close. Especially in a complex sale – but very few people make buying decisions completely on their own.
50% or Below: When you get a commitment to buy, the deal is no more than 50% likely to close. In fact, you have only started the process to close. Don’t rank it higher.
75% or Below: When a deal is in negotiation, it is no more than 75% likely to close. It is super important to not get happy ears here. There is still massive work to be done.
100%: A deal is only closed when there is INK ON PAPER and money in the bank (and outside any period of “right to rescind”). Period. That is the ONLY time you are 100% closed – and you will get burned if you think of it differently.
Now, for the Predictions
When you’ve got your pipeline dialed in, now it’s easy to do the math!
Just take the percentage likelihood for a deal to close at each stage. Add up the total of deals at each stage. Multiply each stage total times the percentage of their related stage. Add up your totals. Keep your average sales cycle in mind as you do this.
Now, you have a good sense of how you’re going to perform for the quarter and the year.
What If It’s Not Enough?
Most people find that it’s pretty bad news – they don’t have nearly enough in their pipeline to get the business done that they need to make their numbers!
Which brings us back to my favorite saying: A Full Pipeline Cures All Ills.
If you find yourself in the “not enough” place – find other things you can do to bring even more opportunities into your pipeline.
Go back into your pipeline. Are there opportunities that have gone stale that you can re-vitalize?
Are there places in your pipeline where deals have gotten stuck? What can you do to move them up or out? A healthy pipeline has healthy flow!
Now you’ve got the tools to build your predictable pipeline and you can start to achieve your goals – in reality!
Happy predicting and don’t forget to…
Love ‘em ALL UP!
The Irreverent Sales Girl