Let’s get one thing straight, if you’re not closing, you’re not selling.
You can do all the hard-work with prospecting, presenting, negotiating and all these lovely tasks we sales people do every day; but without a signature, it doesn’t really mean anything.
So how do you close a deal? It all comes down to these 4 things:
- The agreed action plan from the very first meeting.
- The procurement cycle internally.
- How well you handle objections.
- Risk analysis.
1.The Action Plan.
From the very first meeting, you should be entering with nothing but an intention to listen and ask questions. Your job is to ask probing questions to unlock as much information as possible. This will help you better position your product and increase the likeability of closing.
Let’s assume you found out they are looking for solution X. You need to ask questions about which functionality are they looking for? Which stakeholders are impacted? How long the issue has been going on for? What the ideal scenario looks like for them? Timelines? Budget? Who else are they talking to? Decision-makers? Etc.
Now get this, here’s the magical statement. You say:
“Mr Prospect, if I could show you the best investment that does 1, 2, 3 based on what you’ve just told me – are you in a position to spend $100,000?”
This is called an upfront contract, which should be done in every stage of the sales cycle. You do something, in return for your prospect doing or promising something in return. Another thing you can do to try and find out when you will close is asking:
“Let’s assume all goes well, and there’s a good fit, we agree on pricing and all is good – when do you think we can sign by?”
Never be afraid of asking any direct questions, and always make sure to leave every meeting with a clear and agreed next step.
2. The Internal Procurement Cycle.
After your presentation/demo you need to start asking about the internal approval cycle.
For example, is your lead the person that will sign the document eventually? Or does it go to his manager, then to the CEO?
Or if it is a subsidiary of a big parent company, do they have the authority to sign or does it need to come from the parent company? And if they do, what is the maximum limit they have approval for?
Some companies have budget restraints, and to get approval for extra may be a tedious process that can end up killing the entire deal. Best way to overcome this, is ask from the very start what the decision-making process is. Who signs, and what is the approval cycle. So when you follow-up, you know exactly who to follow-up with.
Once you’ve figured out the approval cycle, you need to start connecting with their legal department. Obviously you’ve sent over a contract that they will 95% have comments about, and request changes on. How long will you keep going back and forth? This can delay closing, especially since the legal team have a million other things to work on. So it’s always best to use simple terms and conditions, to avoid friction while protecting your company at the same time.
Once legal is out the way, you are in touch with procurement directly. At this point they will most likely try and negotiate a lower price. Which is why, you should always leave room from the very start for what else you can offer, to close faster. Maybe a 5-10% price buffer, or a free month or two subscription till implementation is completed.
Last but not least, once signature and money transfer takes place, it’s best to ask for a copy of the transfer to confirm it.
3. Objection Handling
Objections come from fear, and are usually the reason to why some deals are never closed.
An objection is a concern related to the prospect’s specific situation. So the best way to handle an objection, is with a question.
Ahh it’s too expensive for me.
“What exactly is expensive?”
But it doesn’t connect with my existing workflow.
“Why do you need it too?” – This allows you to see if you can potentially have a workaround for the need, or if it is something you can customize in exchange for additional services. You can also counter the question with:
“What if we did a custom integration just for you, would you then take it?”
By handling objections seamlessly, you give more assurance to the prospect and immensely improve your chances of closing.
4. Risk Analysis
Throughout the sales cycle, you always need to calculate all the potential risks that may affect the closing of your deal.
Some things will be in your control, others wont. For example during a management restructure, or a currency deflation or inflation, there isn’t really much you can do.
If there is competition involved in the opportunity, then you need to at least know how many and where they are located. This will help you price strategically and reduce risks of rejection.
If your competition is already a registered vendor for the prospect, that posses a greater risk for you as they already have an existing relationship. Which means you’ll need to know exactly what your solution can do versus your competitions and vice-versa.
Identifying risks along the journey helps you plan accordingly. You start doing scenario planning where if x happens then I need to 1, 2, 3. The same if y happens, or if z happens.
You should report these risks weekly in the forecast meeting, to think collectively how we as a company can tackle all of them.
In conclusion,
It all comes down to what you know and what you don’t know. The more information you collect, the higher your chances of closing; period.
