You’ve seen it before: the red flags clogging up your CRM. The close dates that get pushed back—further, and further, and further.
The panic at quarter-end: your sales forecast is way off! You're going to miss your benchmarks! There are blocks in your pipeline and it feels too late to fix them.
What you’re dealing with is called deal slippage—and it’s one of the most taxing, and most solvable, drains on your sales pipeline.
What is deal slippage?
Deal slippage is exactly what it sounds like. You have a target close date for a deal that has gained some momentum, but then, uh-oh. The buyer's company hires a new CFO, a few emails go unanswered and a meeting needs to be scheduled and Voila! The deal slips into next quarter.
Lack of communication usually means the deal isn’t going to close anytime soon!
So you work to get back on track. However, there’s a question of security. IT needs to audit before things can move forward. The deal slips another month.
Then your contact takes a vacation. The deal slips. There’s something in the terms that the new CFO doesn’t like. The deal slips. Legal needs to approve. The deal slips.
Sometimes, your deal slips because of lagging communication. Your emails aren’t making it to the company’s key decision makers—or your communication has become totally one-way.
But month after month, quarter after quarter, the deal slips, until, just maybe, it gets dropped all together.
Why does deal slippage matter?
Meeting your sales benchmarks and effectively allocating your team’s resources is dependent on your sales pipeline. The plaque on your sales pipeline is deal slippage.
When deals get pushed back, month after month, your sales forecast gets murky. Expectations aren’t met. Team morale is hurt and your potential customers are unhappy.
That’s right. More than anything, deal slippage hurts relationships with your potential customers. When you set a target close date, you set an expectation. If your product or service does, in fact, provide value to the customer, the problem they're trying to solve or the opportunity they're trying to capitalize on remains while the deal stays open.
Making sure the deal closes on time requires strong sales leadership. It’s a key part of a customer-centric sales culture. It impacts your reputation and your overall sales effectiveness. Because if you push a deal back too far, and it might not close at all.
To help you, we’ve broken the battle against deal slippage into 3 phases and developed tips for you to follow in each phase—so you can close on time, keep your customers happy, and develop a sales forecast you can count on.
Phase 1: Learn
Ask Tough Questions
One of the biggest ways to combat deal slippage is to make sure the deal is closable in the first place. Before you even start to even think about your target close date, ask:
- Is the buyer aware of our pricing structure? Have they been introduced to this early on?
- Am I in touch with the key decision-makers? Does my point of contact have any clout in this deal closing?
- Are the potential buyers familiar with our solution—or do they require a lot of education before they purchase?
- What internal and external regulations, checks, reviews, and audits will this potential customer have to go through before the deal is done?
- Which of our customer’s departments have a say in how and when this deal is closed?
Once you know the answers to these questions, you’ll be able to give the deal an accurate and attainable close date. And you’ll be able to outline milestones, contact the right people, track progress, and flag potential hold-ups.
Keep an Eye on the Calendar
It sounds obvious, but when you’re looking at a deadline 6 months away, it’s easy to miss a few common delays. Before you set a target close date, consider holidays and standard employee vacation time. Christmas and New Year’s Day are international holidays, which many of your points of contact will take off. When working internationally, factor in holidays in your customer’s home country.
Maybe the company you’re selling to takes a retreat in August. Or has all hands on deck for a conference in July. Maybe they’re budget for next year is due quarter 3. Or maybe you’re taking some time off yourself in February.
Either way, knowing the external factors that could hold your close date back is essential for setting that target close date in the first place.
Phase 2: Plan
Make Your Close Date Sacred
You should be adjusting your sales strategy to meet your target close date, not the other way around.
That means looking at the customer buyer process, identifying verifiable outcomes, and making sure those milestones are being met in time to close on your target date.
To break this down: verifiable outcomes are just steps the buyer has taken to confirm where they are in the buying process. They’ve presented your solution to the team or they’ve confirmed their budget with finance.
Once you have these, work backwards. And adjust your milestones and communication patterns—rather than your target close date.
Write Up a Give/Get List
Preparing a list of “gives” and “gets” helps you move through all those pesky particulars at the negotiating table. Take a few seconds to identify some agreements or concessions that you might need to make in the last stages of your sales cycle.
Are you willing to shorten the agreement terms? Cut back on some fees or restrictions? What value does each of these “gives” have—and what, of equal value, can you “get” in return? Come prepared with your “gives” and “gets” in mind, and you’re more likely to close the deal on time.
Sales Performance International has a great cheat sheet for outlining your Give/Get list, to get you started.
Build a Strong Connection
Your customers are people. They are facing their own stresses and obstacles throughout the buying process. Genuine rapport is a key to pushing them past their internal hurdles.
When a new executive wants to look at competitors again or their company imposes one last bureaucratic step, potential customers will remember you. They will remember how you reacted at each touchpoint and how diligently you worked to overcome obstacles. Building trust throughout the entire sales process despite delays and last-minute hiccups will encourage loyalty. And that loyalty will help you make the deal on time.
Review your past deals and start to understand what communication patterns signal that a deal will close
Step 3: Accelerate
Remember: Time is Money
Think about the value the customer is losing every day they don’t buy. We’re talking about specific, big impact digits that are sure to light a fire.
This means first knowing the ROI your product will bring to your prospect—and making sure they know it too. Little concessions and agreements get turned around quickly when hundreds of thousands of dollars are on the line. And motivating your customer to act quickly is easy when they’re reminded: “As this deal slips—so does my bottom line.”
Chase Small Wins
Sometimes, it just takes getting your foot in the door. It’s easy to get hung up on an initial deal size—the five year contract, the enterprise pricing option.
Instead, make the smaller sale happen. Once your customer trusts you and starts to rely on your product, it’s easy to land-and-expand. And as you start to upsell, you’ll find fewer and fewer roadblocks between you and your loftier end goal.
Remember Their CTRAs
You’re not the only one with deadlines. Why does your customer need what you’re selling? For what? Take the time to learn about big CTRAs, or “compelling reasons to act.” Maybe they need your product for a new launch, a particular event, a conference, or a presentation. Maybe they’re relying on what you offer to meet their own monthly or quarterly metrics.
All of those events have deadlines. Reminding a potential customer of how your capabilities will help with their big milestones can keep a deal from slipping.
So what’s next?
You won’t find a CRM without the footprints of deal slippage, and you won’t find a sales team that isn’t frustrated by all the delays. But by spotting the deal slippage in your sales pipeline, you’ve already taken a big step towards meeting your benchmarks, clearing up your sales forecasts, and building loyal, lifelong relationships with new customers.
Spot the signs of deal slippage early
Luckily, Sugar users can use Collabspot Connect Pro to spot the signs of deal slippage early on so they can save the deal and update their pipeline accordingly. Contact the Collabspot sales team for a free trial.