How to stop wasting your time on deals that won't close
How to stop wasting your time on deals that won't close
Look for these deal signals
As a salesperson, your most precious resource is your time. You want to spend it wisely. To do so, it's important to be able to accurately assess which deals are likely to close, and which are not.
For context, there are 3 types of deals in sales:
Deals that will close without much effort.
Deals that will close if you put more time in.
Deals that won’t close, no matter how much time you spend on them.
It’s usually quite easy to identify the 1’s because you can feel the momentum in the late stage of the sales process carrying you to the finish line.
But it’s harder to separate the 2’s from the 3’s because they both feel like they are losing momentum as you progress through the sales process. As a result, you put the same effort into both, only to find out much later on that you were wasting your time.
What if you could figure this out sooner?
Enter deal signals—specific data points that help you focus on the 2’s and cut your losses on the 3’s.
Deal signals are grouped around answering 4 questions:
Is your prospect a match for your ideal customer profile?
Is there a high level of clarity around your prospect’s needs?
Is there a high level of engagement from your prospect?
Are the right people engaged in the deal?
Let’s look at each of these in turn:
1. Is the prospect a match for your ideal customer profile?
There are 2 deal signals that indicate a deal is not a match for your ideal customer profile; a firmographic mismatch and a technographic mismatch. Either one is enough to justify a 3. Here’s why:
Firmographic mismatch—if your prospect does not match the typical size, industry and age of your customer base, you are going to have a very hard time predicting their needs, overcoming their objections and navigating their purchasing process. Your predictable sales process turns into an unpredictable and expensive sales adventure. The most common scenario here is getting seduced by enterprise logos within your target industry when you are an SMB-focused company.
Technographic mismatch—if your prospect has a technical requirement that you don’t support, its very unlikely you are going to convince both your engineering team and your buyer that it can be done successfully within the buyer’s timeframe. Even if it looks good on paper, most buyers will want some kind of social proof, which you won’t have. The most common scenario here is getting pulled into discussions over integrating with an unknown system.
Is there a high level of clarity as to your prospect’s needs?
There are 3 deal signals that tell you whether you understand your buyer’s needs; a changing deal amount, a changing close date and a proposal with too many packaging options.
The deal amount keeps changing—if the deal size changes every time you review your pipeline, it shows that the scope is changing, which indicates the customer isn’t sure what they need to buy from you, and just because the deal size keeps going up doesn’t mean everything is groovy. To figure out if this is a 2 or 3, ask yourself what is the smallest deal size needed to meet the buyer’s top needs. If you can answer that question, you have a 2 that can become a 1, because the smaller the deal size becomes, the easier the buying process becomes.
The close date keeps changing—if the close date keeps slipping further into the future, it shows that you haven’t identified your buyer’s critical event. A deal without a critical event is invariably a 3 because it means your buyer is viewing you as are a nice-to-have, not a must-have, even if they seem super enthusiastic. This is very common with early adopter buyers because they love to stay informed about new vendors.
The proposal contains too many options—while every proposal should have at least 2 packaging options, if you are putting 4+ options in front of a buyer you are just going to overwhelm them with choice and create decision fatigue. The common mistake here is hearing a buyer say “show me all the options and I’ll decide” and then literally showing them all your options. This type of deal is usually a rescuable 2 but you have to go back to discovery, reprioritize your buyers’ needs and re-prescribe fewer options.
Is there a high level of engagement from the prospect?
There are 4 deal signals that tell you how engaged a buyer is; time since last inbound activity, buyer talk time, next meeting scheduled and time in current stage.
Time since last inbound activity—if the prospect has stopped responding during the deal process, it generally indicates a lack of desire to move forward with you. You can spot this by skimming the activity history for the deal and if its been more than two weeks since the last response and the salesperson has been getting crickets on their responses, you are looking at a 3.
Buyer talk time—if your prospect is talking at least 50% of the time on a sales call, it’s a good sign they are engaged. Of course, this is partially dependent on the salesperson asking open ended questions and practicing active listening but even if the buyer talk time is less than 50% but they are asking the salesperson a lot of questions, its a good sign the deal is a 2. However, if the buyer talk time is low and all they are doing is saying “mm-hmm”, “no questions”, “looks good”, then they aren’t really engaged and sharing their concerns with you.
Next meeting scheduled—if the next step is clear and the next touch point is scheduled, its a strong sign that the buyer is engaged and the deal is a 2. By contrast if the next step is unknown or unclear the deal is a 3. The most common scenario here is the buyer saying “send over the information and I’ll get back to you”. They won’t.
Time in current stage—once you’ve closed a few dozen deals, you should be able to calculate benchmarks for your overall sales cycle and the number of days a won deal spends in each stage of your sales process. If the time in the current stage exceeds 2x your benchmark it’s a sign that your deal is a 3. The most common scenarios are getting stuck in discovery (which indicates a lack of critical event) and getting stuck in proposal (which indicates you are not engaged with the decision maker).
Are the right people are involved in the deal?
There are 2 deal signals that indicate if the right people are involved; the number of contacts with activity on the opportunity and engagement with the decision maker.
Number of contacts with activity on the deal—the more people you are talking to at your buyer’s company, the more likely you are to create momentum through them talking to each other outside of your sales call. By contrast when you are talking to a single person (your champion) and relying on them to go to bat for you internally with their boss you are putting the fate of the deal entirely in their hands. Deals with multiple contacts almost always close at a higher rate than those with a single contact, especially once you cross the $10k contract size.
Engagement with the decision maker—if none of the contacts on the deal is the decision maker, it’s a clear 3. If the decision maker is known but there’s no engagement with them, its on its way to being a 3 unless you can at minimum identify the needs of the decision maker and reflect them in your proposal and ideally bring them into the buying process before it gets to proposal.
What other deal signals are you using? Let me know in the comments or by responding to this email!
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