Deal Age RISK
Nothing kills a deal faster than going slow.
When managing a deal, speed is your friend. Moving a deal through all the phases efficiently, anticipating and being proactive at every stage, bringing the prospect forward at every stage, and focusing on the next steps is crucial to winning deals. Moving slowly through the phases losing momentum and if competitors take that momentum away, this is the fastest way to lose the deal.
Of course, we’re not talking about unnecessary speed or pushing the prospect too hard. Focusing on the decision date, hopefully, backed up by a compelling event focuses the mind and brings the deal forward.
You will find your deals move to an expected cycle number of days. It could be 10 days, 30 days, 90 days 240 days. Whatever it is, it’s important that you come up with a normal deal cycle time. Deals going beyond that normal cycle time are frequently at risk of not closing. Old deals carried around in the pipeline are distractions as well. And when you do come to kill them off, this reduces confidence in those relying on you – I mean if you are showing deals in your pipeline for months and then you do a cleanup and a lot of deals disappear then your board and investors can get spooked.
Deal age and cadence go hand in hand. The cadence of a deal is the natural rhythm within the deal itself. Some phases go fast, and some phases go slow. So once you’ve established the deal age optimum start to look at the cadence that your deals typically follow.
An advanced technique is to keep looking at the deals and see what you can do to reduce the deal cycle time.
Amplifying Factors Cadence, Deal Size
RED – Deal age above normal So if the deal age is greater than normal, you need to requalify and ensure that it still on track to close. |
AMBER – Deal approaching normal age. Examine the deal in detail to ensure that it is still on track. Once it passes the normal deal cycle time, the risk increases significantly that it may not close. |
GREEN – Deal age within normal range. Even though the deal is within normal range check to make sure that it’s not stalling. |
Mitigation – what to do ?
The most important thing that you can do is to make sure you’re actively managing the deal through the stages and every interaction with the prospect finishes with an agreement on the next steps. By having your prospect work with you, you can ensure that the deal moves efficiently and hence can keep within normal deal cycle time.
Review your deals regularly and make sure the deals have appropriate next steps that will bring the deal forward. Your frame of mind needs to be working through rather than to each important point. For example, if the next step is to do the product demo don’t just think in terms of the product demo, but define what happens next, assuming a positive outcome to the demo so that you leave the demo presentation with agreed next steps after that.
Run activities in parallel. Sometimes people literally do one step after the other and this can slow down the pace, particularly towards the end. For example, if the client needs to review your order form or T&Cs make sure they get them in advance when they need them so this way they can be reviewing them while other steps such as security reviews or suchlike are occurring. If you do everything sequentially you are unnecessarily elongating the deal process.
Seek out or create a compelling event for the customer. Compelling events can help ensure the deal closes on time and within normal parameters. You can create a compelling event in a number of different ways. The most obvious is the application of a discount tied to a date. This of course is not without risk as a could appear very salesy but if done right, we can help to create a compelling event.