Three Reasons for a Drop in Closing SuccessThree Reasons for a Drop in Closing Success
Dealing with a drop in closing rates can be quite a testy experience for business owners and sales managers who have otherwise seen a great deal of success. Consider a scenario in which your probability of closing a sale hovered around 70 percent in the past, yet not a single new contract has closed since the start of 2012. This was the challenge one VAR brought to us.
October 24, 2012
dropsalesDealing with a drop in closing rates can be quite a testy experience for business owners and sales managers who have otherwise seen a great deal of success. Consider a scenario in which your probability of closing a sale hovered around 70 percent in the past, yet not a single new contract has closed since the start of 2012. This was the challenge one VAR brought to us.
It’s easy to put the blame on your sales reps when business isn’t closing. Sometimes they are to blame. But drops in closing success are often caused by common mistakes on the management end that you may not recognize. Here are three you can avoid.
1. Your Reps May Be Selling to the Wrong Person
For a variety of reasons, some sellers simply don’t feel comfortable approaching business owners or executives with a proposal. Instead, they continue calling at the IT Manager level, which means they seldom get a chance to speak with the individual who actually makes the decisions.
There’s no guarantee your sales reps will be able to successfully close through another person representing their proposal. Push them to sell at a higher level whenever possible. Motivating your sales team to approach executives rather than mid-level IT managers is an essential part of successfully closing a sale.
2. Market Segment or Service Offering Has Changed
Selling into any market segment or changing service offerings requires a fair amount of background knowledge to succeed. Sales reps have to learn the new business situation, key contacts to approach, and best positioning for your offerings before they can sell efficiently. This very often results in a drop in closing success, at least during the initial learning period. This isn’t an issue unless you’re changing markets entirely, which many VARs are doing as they move into cloud.
If that’s the case, expect that your sales team will need time to adapt. They’ll have to work harder to find leads, the sales process may lengthen, and closing may be more difficult. Making the shift to a new segment or offering is sometimes a necessity. Just go into it with an awareness of how it will impact revenue and help your sellers change.
3. You May Not Be Holding Your Reps Responsible for Inconsistency
Successful sales managers identify the best sales process and then program it into their CRM system for sales reps to follow. A drop in closing success is almost inevitable, however, if your reps don’t apply your sales process consistently.
It’s easy for sellers to stray from the established sales process. Oftentimes they don’t even realize they’re doing it. They fall back into bad habits. They skip steps thinking they can close a sale faster. While it can be tempting to allow your sellers to take the reins and simply do their job the way they want to do it, only careful management of their process can ensure you avoid inconsistencies. Don’t be afraid to hold your sales team accountable to the sales process you know works.
These aren’t the only issues that can result in a drop in your closing rate. The economic recession certainly hasn’t helped matters. And, sometimes you only need to adjust your sales reps’ proposal and presentation strategies to be more effective. Perhaps they’re not following up consistently, for example.
Even if these issues are getting in your way they are only secondary problems to solve if you’re selling to the wrong person, changing market segments or being inconsistent in your sales process. Investigate the real cause of the drop in closing success so you can determine your best plan of action.
Kendra Lee is a top IT seller, prospect attraction expert, author of the award-winning book, “Selling Against the Goal” and president of KLA Group. Specializing in the IT industry, KLA Group works with companies to break in and exceed revenue objectives in the small and midmarket business (SMB) segment.
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