Your Sales Quota Doesn’t Choose Your Prospects

Sales Managers: Clean the sludge from your sales pipeline

Is this your sales pipeline?

Bumped into an incredibly thought-provoking blog by former programmer and VC investor Jason Cohen over on his blog, A Smart Bear.

His point is simple:

If you’re an “early phase” startup, when it comes to choosing clients, never say “no,” but rarely say “yes.”

“Wait a minute,” you might say. “This is an inside sales blog, right? What’s all this about ‘choosing’ clients?”

It goes back to something I read last year on the Sales 2.0 Network and InflexionPoint blogs: there’s only two reasons a rep ever loses a sale, either he or she wasn’t supposed to be there in the first place (i.e., pursuing an unqualified opportunity), or they get outsold by a competitor.

In the original post, author Donal Daley states that one of his consulting firm’s challenges is to change the mindset of sales reps to take on fewer deals, not more.

We discuss ways to help sales teams win 4 of 7 deals, instead of 3 of 10. This means that you pursue fewer opportunities. It’s not about ‘getting up to bat’ more often (emphasis added). In fact it’s the opposite.”

Bottom line: high-performance sales reps don’t take on unqualified prospects, or fight for deals they can’t win.

One more thing: in the same blog, Donal states that it takes the average sales rep 50% longer to lose a deal than to win one.

Think about that for a second.

If your average close rate is 25%, it means you’re spending four and a half hours on losing deals for every hour you spend on winning.

If you were to sit down and analyze your “10 best” prospects in your pipeline, is it possible you’d discover three that could be tossed out right now—and it would have a negligible impact on your performance? In fact, might it actually improve your performance?

Believe me, I understand more than anyone that sales is a numbers game—but it’s too easy for the all-powerful, sacred quota to become something other than a goal, a number on a wall. It starts to live, breathe, stalk us in our cubicles.

Its all-consuming power persuades us to fill our pipelines with something, anything, even if some (most?) of it is crap and sludge. I’m sure some companies are immune, but I suspect for a lot us (myself and XANT included), two or three out of ten opportunities actually aren’t. We’re chasing “rainbow sunshine,” half-committed buyers, and people that might say “yes” but only if the conditions of their acceptance are prohibitively in their favor.

It’s the same principle Jason Cohen is espousing for pursuing potentially disruptive clients:

Set the conditions of ‘yes’ such that:

  1. If they say ‘yes,’ you’re happy because the terms or money are so good, it more than compensates for the distraction.
  2. If they say ‘no,’ you’re happy because it wasn’t a great fit anyway, so it’s not worthwhile for a small return on your time and effort.”

If you’re selling into a commoditized market, you may not have much choice in who your customers are; you take whatever you can get.

But in high-touch B2B sales, don’t be too quick to dismiss the idea that less is potentially more. One very good client is often worth four mediocre-to-bad ones, in my experience—and somewhere along the line, a sales rep was involved either way.

Author: Ken Krogue |
Summary of Ken Krogue’s Forbes articles

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