You’re reading an excerpt of Founding Sales: The Early-Stage Go-To-Market Handbook, a book by Pete Kazanjy. The most in-depth, tactical handbook ever written for early-stage B2B sales, it distills early sales first principles and teaches the skills required, from being a founder selling to being an early salesperson and a sales leader. Purchase the book to support the author and the ad-free Holloway reading experience. You get instant digital access, commentary and future updates, and a high-quality PDF download.
While we’d love to win every deal that comes through our pipelines, it’s just not going to happen. In fact, if you’re winning all your deals, you could even make the argument that A) you don’t have enough deals in your pipeline (Are you doing just one demo a week, and bird-dogging that one like crazy?), or B) you’re not talking to enough customers who are lightly qualified (you’re cherry picking only the best ones, but not taking enough shots on goal). If you’re fully utilized (ten demos a week or more), and you’re winning all of them, OK, something you’re doing is magic, and I’d like to talk to you. But with a new solution—or even worse, in a newly forming market—win rates in the 10% or 20% range will be more typical. If you hit 30%, you’re doing pretty great.
And this isn’t something to be ashamed of. Think about all the reasons why a deal might not happen: it turns out that there really isn’t budget available right now (but maybe in four months!), priorities shift away from the problem that your solution addresses (don’t worry—they’ll likely shift back!), or the person you’re selling to leaves the company. There are myriad reasons why this time may not be the right time for that deal. So closing out an opportunity as “closed-lost” is totally okay, and certainly better than spending your emailing and calling time on a deal that’s never actually going to come to fruition. Remember, your time is your most valuable asset in enterprise selling. So being dishonest with yourself about the likelihood of a deal closing, and letting it take up time and space in your pipeline, is actually far worse than closing something out.
When to Close-Lost Something
When should you close something out? Well, the easiest is when you’ve tried to handle the prospect’s various objections and she still gives you a direct answer to a direct question that she’s not going to move forward right now. This is almost the best-case scenario (aside from a win!), because you have a clear understanding of where you stand and the opportunity to ask specific questions about why she didn’t want to progress. Was it competition? Was she not convinced of value or that she actually had the need? If that’s the case, then it’s probably low likelihood that you’ll be able to get her later. The more likely scenarios, though, will be the prospect not having the budget to purchase, or the prospect largely going dark—which is usually indicative of some sort of issue with priorities changing, an unstated lack of budget, or an unwillingness to go to bat to purchase the solution. This case is actually not bad, because presumably the prospect still has the need for your solution. It’s not a “no,” but a “not now.”
How can you know when it’s time to close something out, even if the prospect isn’t telling you directly? First, you can make sure that you’re not in this situation of indeterminacy by making sure that you always have the next meeting on the calendar. That way, you’ll have a call in which it’s much easier to suss these things out. Of course, if you have a call scheduled and the prospect misses it, or somehow makes it hard to schedule a next meeting, your spidey senses should pick this up as the beginning of a deal going sideways. If you aren’t seeing specific movement forward, and instead you’re seeing a series of broken micro-contracts on the part of the prospect, the deal is probably on its way down. In these situations, it’s actually better to just be direct and give the prospect an offramp. Remember, you want to have a mindset of plenty, not scarcity. You don’t want to grasp after this opportunity when there are thousands of potential accounts to be addressing. Spend good time with good opps. Recognize when the prospect may be trying to let you down easy by not saying no, even as his actions say no, again and again.
Address these situations head-on. It might be as simple as an email that says something along the lines of “We’ve missed a couple follow-up appointments. While I think that our solution would be extremely valuable to your organization, as we agreed that [some citation of ROI that is specific to them], I don’t want to occupy your time if it’s unlikely we’ll be able to help you out. But I’d really like to know so I can prioritize my time effectively, and also not bother you unnecessarily. Are you still interested in working toward becoming a customer? Is now a bad time? Or does it turn out that this is something that doesn’t make sense for you after all? I can take the truth, but I would like to have clarity!” Or something like that. Always be respectful, and don’t burn bridges, because you’ll just be resurrecting this opportunity again in three months. And who knows: maybe your contact moves to another company in the short term and was so pumped up on your solution that it’s the first thing he wants to purchase in his new role. Provided you weren’t a jerk when you closed the book on that opportunity, that is!
When you choose to close out a deal and not work it anymore, make sure that you document the reason in your CRM. This will position you to pick up the opp later if it’s potentially resurrectable (you’ll create a new opportunity on the same account). It will also help you better understand what is driving lost opportunities, which can help inform your product roadmap. If you lost the deal to competition, make sure to have a picklist of options in the CRM so you can see who you’re losing to. If the reason was pricing or value perception, have a text field in your CRM that lets you capture closed-lost notes, and make sure that you, and your eventual reps, take the time to record information there. You will likely be resurrecting these opps in two or three months, by which time you will have forgotten all the current context, unless you note it now. Think of it as jotting down a treasure map for your future self, so when you pick up the opp, you’ll be that much closer to winning it the next time around.
Coming Back Around
One thing that early-stage companies have a problem with is one-and-done prospect engagement. They get the appointment set, they do a discovery call and validate pain and lack of good existing solutions, they do the demo and follow-ups to build excitement and consensus, and then something goes sideways and the deal is shelved. As discussed above, it happens, probably way more than 50% of the time. So this is to be expected, and you definitely don’t want to leave opportunities sitting open in your pipeline taking up resources.
But what’s shocking is how often founders and other sellers don’t circle back around after a certain amount of time. If the timing was off, but everything else was primo, when will the timing be right? Ask! Note it down, and re-engage at that time, with a new opportunity. Or if it’s not clear when the right time will be, re-engage in 60 days regardless.
example“Hey there, Jim! We spoke a few months ago about how TalentBin can help you accelerate your technical recruiting, but it just wasn’t the right time. We’ve shipped a ton of great new features, making the solution even better, and from what I can see on your jobs page, you are still hiring lots of engineers. Want to hop on the phone and catch up on what’s new in your world, and the new hotness we’ve made?”
To the point about inevitability I touched on earlier, until the prospect stops having the need you solve (for example, no longer hiring, goes out of business) or implements a competitive solution (thereby soaking up the demand you sought to fill), they should be considered a target. And given that you’ve taken the time to sniff out a variety of things in your discovery and demo process that your competition doesn’t know until they do the same work, you should harvest that investment!
importantMake sure that you are looping back around on those opportunities that you have closed-lost. Don’t leave them open in your pipeline, limping along with no particular next action. Rather, close-lost them, and at the appointed time, as reported in your CRM, make a concerted attempt to pop that prospect back to the top of the funnel in a new opportunity. You’ll be amazed what a fresh pass through the funnel—with renewed urgency and an opportunity for the prospect to see what new features you’ve shipped (and by implication, what awaits them after they purchase)—will do for close rates.
Now that we’ve talked about what a trip through the funnel looks like for any given opportunity, how do you manage a few dozen of them at once? Depending on the length of your deal cycle, and your average contract value, you can imagine working between a dozen, 50, even up to 100 deals concurrently, each spanning 30, 45, 60, or maybe even 180 days from beginning to end. This goes back to one of the most jarring things about selling for the first time: trying to manage that many concurrent threads, and herd those cats toward a finish line, is a shockingly large adjustment from non-sales work.
And while a holistic rundown of how best to manage a pipeline could be a chapter unto itself, these are some general guidelines.
You’re reading a preview of an online book. Buy it now for lifetime access to expert knowledge, including future updates.