Suffering from Premature Proposals?
Premature proposals don't accelerate revenue. They lower it. Here's how to regain control.
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If you prefer to read - here is the transcript:
Here is a quick trick for all of you in terms of knowing whether your deal really is ready for a proposal. So you know in your CRM, or you should know, what the average length of the sale cycle is. Let's just say it's the math easy.
Our research shows that you have the best chances of closing the opportunity, when 75% of that time is spent in pre-proposal. So qualification solution development whatever you want to call it. So if your opportunity length is on average in the company or for this sales rep 100 days, we should be at 75 days before the proposal goes out. Slowing down the front end will speed up the back end of the sales cycle.
Now there are extenuating circumstances and I'm sure that many of you are already going: Yeah, but what if and what if and what if? So, a couple of things. I will give you an extenuating circumstance that is valid if it's an existing customer that you're selling more to. Okay, I'm talking about net new business and I should have been maybe more clear about that upfront.
But everything else is probably a fluke. It's not statistically relevant and you can’t build your sales process on the back of the 1% or 2% of deals that call in and want a proposal and close quickly. I know that that's the fun way to sell, but it's not the usual way.
Let's look at the averages. So if your sales cycle is 100 days, you want to be spending doing the qualification.
And if a sales rep comes to you and they've spent 25 days, and then they want go to proposal, we need to ask, do we have then enough people that we're talking to. Do we understand the business situation? Do we understand enough about this business? Have we been positioning ourselves as a trusted advisor or just as a sales tactician? Do we know who the decision maker is?
That metric gives you, as a leader, an opportunity to dig in and really find out what's going on inside this account before the customer gets pricing, and it can all go wrong.