Quarter-end Contracts Slip-sliding Away? Check Your Sales Process!
Negotiations went well. You made your case to your buyer, and you have their assurance that the deal will close by the end of the quarter. You update your forecasts and just sit back and enjoy. Nothing can go wrong. Or can it?
There is a term you should know ... slippage.
Fast forward now to the second-to-last week of the quarter. Your buyer still hasn’t returned the signed contract, and you’re feeling the heat to get it signed. You call to get a status update, and you learn from the buyer that IT still needs to complete its security audit. You’re in the queue. A week goes by, and there is still no signed contract. Now, your buyer tells you that a purchase of this size will need to go through procurement, and the CFO will likely need to sign off personally. The problem is that the CFO is on vacation and doesn’t share your sense of urgency to sign the deal by the end of the quarter. Now, your deal and your forecast are in serious trouble. At this point, there is little you can do. You can pray that the slippage is just temporary, that the whole deal has not gone south, and that your forecasts are not just off but gone. Otherwise, it is just damage control.
The best way to avoid the need for damage control is to avoid damage. There are several steps you can take to avoid slippage. Start with a sound sales process that is aligned with the customer’s buying process. Following a well-defined sales process will let you know what to expect and when to expect it. Keep in mind that you sell your products, services, and solutions all day every day, but your buyer might only make this purchase once in his or her career. You need to know what to expect. You need to anticipate challenges to a smooth buying process. You need to work with your buyer to anticipate problems before they arise and should then move through with little or no problem.
The process should include buyer-centric “verifiable outcomes.” This is a big word for clear activities your buyer has taken that verify where the buyer is in the buying process and where you are in your selling process.
Start with knowing the key players and buying processes with the company. Valuable things to learn include:
- How familiar is the customer with your product, service, or solution? Have they bought something like it before? If not, educate them in how others buy.
- Who makes the final decision? Who signs the contract?
- What role, if any, will the CFO or the finance people play?
- Who are the other major players that influence the purchase? Every department affected by a purchase, particularly if they might have to change the way they currently work, could have some impact on the decision-making process. Find out sooner rather than later.
- Can your contact do more than just recommend you to the decision makers? Does his or her opinion carry real weight?
Be especially aware when key personnel in a buying organization change. What if the supportive decision maker leaves the company? What if a higher up, even the CEO, is replaced? New “powers that be” at a company may come in with a new agenda. At the very least, they will want to review operations and get to know the company, or part of a company, they inherit. When this happens, it is not uncommon for major purchases to stall while the dust settles. If you smell smoke, there may be fire.
Find out about regulatory and compliance issues that need to be satisfied. If you are selling something like machinery, you already know to ask about environmental issues. But what about IT? Security is a huge issue. No company wants IT problems. A company is going to want to be especially sure IT problems do not make the national news, like Target. Not good for the career of anyone who signed off on Target’s IT security buying decision.
Finally, and this sounds simple but people forget the simple, look at a calendar. Are any holidays coming up that might delay contract signing? Foreign companies have different holidays than in the United States, so you will want to check. Check religious holidays. Vacations are also a factor, particularly if a decision maker has one planned. Times to be particularly careful are the weeks of Thanksgiving, Christmas, and New Year’s when a lot of people may take time off. The latter two are international holidays.
Design your sales process with the buyer in mind, and ensure that you are tracking with your buyer throughout the process. Anticipate the challenges to close the deal, and proactively take measures to avoid slippage.
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