Sales Discipline: Pursuing the Right Deals
It is often said, “If the best product always won, we’d all be driving Rolls Royces.” If we can accept that it’s not always the “best” product that wins, then what determines who wins? Is it the most eloquent salesperson, the best sales process, the most charismatic CEO, or is it a case of the salesperson selecting which deals to pursue based on a combination of these factors?
I was once asked during Board of Directors meeting, “why do all of your forecasted deals close?” I explained the two reasons: 1) I only forecasted deals that qualified to be forecasted based on our sales process; and 2) we only vigorously pursued the deals that we were very likely well positioned to win, if we executed properly.
The latter reason should not be underrated inasmuch as not all deals are winnable and not winnable deals are good deals. Let that sink in for a minute . . . it takes great discipline for a salesperson to decline what seems like an opportunity, particularly given the combination of high quotas and the general competitive nature of salespeople. Sometimes, though, it needs to be done, as there is a high opportunity cost to chasing bad deals instead of a total commitment to pursuing deals where our product differentiation, implementation strategy and business case will produce winning deals.
After all, every minute/dollar spent chasing a bad deal (marginal fit, unfriendly political or architectural landscape) is a minute/dollar not spent pursuing a good, long-term customer opportunity. This opportunity cost cannot be recovered, so the time and resources unwisely spent can negatively impact pipelines, forecasts and sales trajectories. This is exacerbated by a large, marginal fit opportunity. These are the most difficult for salespeople (and many sales leaders) to walk away from chasing, as they are seduced into thinking that they can win, even if an objective view could plainly see the lack of alignment between our product/market fit and the customer’s requirements.
Bad and unwinnable deals delude senior management and investors into believing an unrealistic sales forecast while gobbling resources at a disproportionate rate to “good fit” opportunities. Because of their sheer size, these large bad deals tend to stay on the sales forecast, if for no other reason than the divot it would create if the deal was killed.
So what constitutes a “good” deal? Here is an easy definition: a deal that drives a strong business case acknowledged by the customer’s senior leadership, where the solution uniquely successfully addresses a problem that has a compelling date by which the problem needs to be addressed, and where the customer provides ready access to its senior leadership and allows us to demo last. Failure to satisfy any of these five core elements spells trouble for any potential deal.
In the end, if we all accept that time is the enemy, then it follows that salespeople (and sales leaders) need to use their time wisely, which in this case means having the discipline to focus exclusively on the deals that fit our differentiated core competency in a timeframe that we can predict. If your SaaS company needs help with sales discipline, please reach out to dave@moicpartners.com