Problem: Salespeople spend far too much time preparing proposals and close far too few. Of course, closing rates vary but closing only 15-20% of the proposals is not uncommon. This is obviously very inefficient and causes time management problems as well as feelings of rejection, futility and despondence. Furthermore, it results in reduced sales and lower commissions.
Analysis: Salespeople have been brainwashed over the years to believe that selling is a numbers game and that “if you throw enough stuff against the wall, some of it will stick.” They believe that more is better and are eager to propose to virtually anyone who expresses even modest interest in their product or service. Too often prospects don’t know what they truly need or want so they use the proposal process to help them figure that out.
Well, the last time we checked, no one got paid a commission for doing a proposal and the number of proposals on the street was not a line item on the company’s P & L or Balance Sheet.
There is correlation between the number of proposals you generate and the money you make but, it is not the only correlation. You have to factor in the pretense by which you think it will close, the quality of the prospect, i.e. right customer, right margins, “referability” (can and will they refer you to someone else) and potential for repeat orders. Without factoring those considerations in, you are like the baseball player who swings at every pitch in hopes that you hit a home run. With that approach, you become the strikeout king instead of the home run hero.
Solution: The first decision a prospect has to make is a decision. Have they decided to buy, fix, adjust, or do whatever they told you they wanted to do? To qualify this ask, “Regardless if you buy from me, have you decided to buy or are you still in the trying to figure out if you should buy mode?” Their answer tells you where they are at in their buying process so before you start quoting and hoping, keep in mind there is a direct relationship between the qualifying effort and the closing ratio.
Studies show that in a complex sale the best investigators are the best closers. Never make a proposal unless you are confident that you’ve got at least a 90% chance of closing the deal. This requires you to do a world-class job of qualifying. Nothing less will do.
You must have a clear understanding of exactly what problems or pains your prospect expects you to provide solutions to, understand completely how much they’re willing to invest with you to fix the problems (assuming they’re convinced your solutions are viable), and you must be talking with the decision maker. Finally, you must obtain a commitment from them before making the proposal. If you can manage to accomplish this, your closing rate will soar and so will your commissions.
Bottom line – the more time spent qualifying the less time spent following-up trying to get a decision.