Early Close

Positioning for an early close adds robustness to your deal pipeline.

Human nature and years of practice drives us to think in terms of months. It’s common to see a CRM showing close dates as being the last date of a given month, based on the salesperson working to close a deal in a specific month.

The problem with this approach is that it doesn’t allow for slippage and deals can move from one month to the next because action wasn’t taken early enough in the month to make something happen. At its core, sustainable and predictable revenue growth means that deals close when we expect them to close and deals drifting from one month to the next are not aligned with this.

This is particularly prevalent when a deal moves from one month to the next, and again following the same habit is positioned at the end of the following month. This can lead to inefficiencies.

Using techniques like a mutual close plan can help you to move a deal to a mutually agreed date so you need to agree on a date, but work it so it’s not right at the end of the month.

Amplifying Factors: Mutual Close Plan Champion  Decision Maker

Further reading :

Close Early and Often

How to Close Sales Like an Absolute Pro

Closing a sale: A natural ending in the sales process

RED – Early close not agreed

If your prospect is resisting this usually means that are not ready to close. Make sure you have done what you need to win the deal before attempting to close the deal. 

AMBER – Push back to agreeing on an early close

 This may simply be how you positioned it or you positioned at too early in the sales process orders or genuine uncertainty by the prospect to conclude business with you. Using tools like a mutual close plan can help you to get there.

Green – Early date set and agreed

Provided this indeed is before the end of the month this is good, if not, you need to check your calendar and try to position it with runway left for any problems that may arise at the last minute.

Mitigations – What to Do?

Use your calendar to define when during the month, it’s reasonable to close a piece of business. If a month closes on Monday or Tuesday position the close for the previous Friday. If it was an end-of-quarter or end of the year, position your deals even earlier. For example, around the 20th of the month.

The reason we do this is to give predictability to our revenue. We want to be able to with confidence secure the deal within a month, and so are giving ourselves and the prospect wiggle room for last-minute queries or things that can go wrong.

If the deal does slip from one month to the next, do not position it towards the end of the month. Always position at some point during the first week to keep pressure on yourself and the prospect to take it off the table. It’s human nature – even if you’re certain the deal will close the fact that you have it in your pipeline during the month means you won’t push as hard on other deals, and so by taking it off the table early, you can focus on other businesses.

Make sure the early close agreed with the prospect is part of your mutual close plan.

Use discounting to incentivize an early close (maybe coming to the end of the quarter or when your board meeting coming up), it’s not unrealistic to offer the prospect an additional discount on the commercial terms to make sure that you have the deal sealed before the board meeting, or whichever. Most prospects will work with you on that point, provided you give them enough notice as it’s in their interest to do so.

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