Tuesday, July 23, 2013

Why Are We Seeing So Many More Stalled Deals?

Your prospect seems like they are hooked. You’ve delivered a great sales presentation, a good demo, and prepared a tight proposal. The buyer has connected with you emotionally on the purchase decision and you think you are set.

And then, the deal goes silent. Your calls are not returned and you are left wondering what went wrong. This goes on for a few weeks, and then stretches into a couple of months, as your commits are missed one by one.

Unfortunately, stalled deals are all too common today, affecting almost 60% of a typical sales pipeline. For a typical sales organization, for every $1 million in sales revenue that is closed each quarter, there is typically another $1.8 million in stalled deal opportunities on the line, much more than what is lost to the competition.

In a Linked-In discussion about a prior article, How Can You Best Prevent Stalled Deals, Tamara Schenk, one of the most respected sales enablement practitioners worldwide and VP Sales Enablement at T-Systems International, indicates that stalled deals are usually the result of 2 key issues:

1) Skipping a Step -  In Tamara’s experience, the prospect has to go through a journey, of “why change”, “why change now” and “why with us as a vendor”. Each step is vital in the prospect’s decision making process:

  • Why change? – the prospect understands there is an issue that is worth addressing, and
  • Why change now? –the prospect sees a significant “cost of do nothing” and realizes that the issue is not only real, but should be a priority
  • Why with us as a vendor? - the prospect understands the competitive advantages, superior benefits, lower total cost of ownership (TCO) and superior Return on Investment (ROI) of the proposed solution, and the low risk of you as a solution provider.
Not only is each step vital, the specific step-wise sequence is key to prospect buy-in and success. Ms Schenk points out that “In almost all stalled opportunities the “why change” milestone step was never achieved”.

2) More Decision Makers – Tamara also believes that “the ability of a sales team to equip the main stakeholders at the customer to sell the project within their organization, is often overlooked, but key for success”.  

According to IDC, there has been a 40% increase in the number of stakeholders in typical deals over the past three years.  A typical deal that would have had five decision-makers now has seven.

You’ve seen it in your own deals, with higher levels of signoffs required, finance and procurement playing more dominant roles, and multiple business group representatives playing a more active role in each decision.

Even though you might have connected with your prospect, there is likely a whole other team of decision makers you will have to sell to either directly, but most likely indirectly, via your Champion.

The situation is complex and you’ll have to enable the Champion to address the fact that:

  • Each of these stakeholders likely has a different view of the issues, priority and value than your main prospect.
  • With Finance, procurement and the executives so involved in each deal, you’ll need to get beyond just an emotional sale, delivering tangible cost of do nothing quantification and financial justification.

The Champion will have to provide the same “why change”, “why change now” and “why with you as a vendor” answers to each stakeholder, which means your Sales team must provide them with the tools, insights and justification to make the case.

The Bottom-Line

Stalled deals represent the largest pipeline opportunity for most sales teams, however, getting these stalled deals moving is not easy.

It comes down to improving the sales process and sales enablement, recognizing that you have to answer all questions in the buyer’s decision-making process in sequence, delivering the insights and justification to answer “why change”, “why change now” and “why with us as a vendor”, and further still, arm your Champion to sell internally in a similar compelling manner to executives, finance, procurement and other business groups.

Additional Resources: 

How Can You Best Prevent Stalled Deals 

Challenge Your Do Nothing Prospects to Yes

1 comment:

Bruce Shepherd said...

This is very common in the small to medium market place.
Your initial discovery should be with a Stakeholder that is in food chain, otherwise your competition will be.