Improve your Deal Closure rates by following this 1+1 formula

OR Why a single-view of your bid process matters?

SVP Sales: We already have a CRM tool!

Me: And what all do you use it for?

SVP Sales: Well, for sales management, funnel analysis, and team productivity. At the end of the day I have to meet my targets!

Me: And does it help you close deals?

SVP Sales: Well ..

Me: ?

SVP Sales: I mean as a B2B organisation, we use the CRM towards that objective but it is the means, it can’t help me close deals.

Me: If there was a tool which could help you close a deal, what would you like it to do for you.

SVP Sales: Now we are talking. It should help me answer questions specific to the deals. And thus, help me take decisions at the negotiation table. To being with -

Which are the deals similar to the one I’m trying to close now, in the recent past, and what was the outcome.

Me: Hmm .. and …

SVP Sales: When we have won deals in North, against this competitor, what has been our gross margin range?

Me: nice ..

SVP Sales: What are the chances of my win at this price?

Me: Yes and ..

SVP Sales: Wait .. do you have anything like this?!

Rightly so, today’s B2B sales heads have a lot of decisions to make. And if you are in solution sales (turn-key/projects/MTO/custom), every deal is unique, every price proposal different, and every negotiation challenging.

Let’s say you are at the last leg of the sales bidding process and are at the negotiation table. This obviously means you are a valid option for your customer and have at least 33%-50% chance of winning. Whatever decision you take here on can be the difference between a sale won or lost.

The key decisions at this stage therefore is how low should you go with your pricing .. or not? If you say this is our best price and walk away, what are the chances that the client will not go to the competitor. One part of this answer is determined by what has been your account engagement/mapping and how closely your proposition meets the client requirements (compared to the competition). The other part is squarely what commercials you have at the table.

Now for a moment let’s say you really had the answers to the following questions:

1. What is the probability of me winning this deal at a given price?

2. In the last 2 quarters, in this territory how many deals have I lost/won against a given competitor (for a similar deal in terms of solution elements/value) ?

3. What has been our GM % in the deals we have won/lost ?

4. What have been the recent deals in this account and the outcomes ?

5. What has been my win % against this competitor (for a given deal size, industry client) nationally ?

Would it be valuable? With answers to these key questions wouldn’t you be able to determine your own outcome.

So why aren’t these answers available? What’s wrong? What’s missing?

CRM has a rightful place in helping organizations manage their sales force better. It is good at providing a view - from the time a lead is identified till the time it gets closed. But and this is a crucial But - it lacks detail. Details about our internal pricing/solution elements. E.g. What price did we propose, what was our final price, what was our GM%, what were the different solution elements, etc.

To do a proper sales win loss analysis, the missing piece is having a single view of these internal, as well as the client facing elements!

Client facing elements include – what price did we quote? What was our final price? Who all were the key competitors, what was their price? What were the solution components? What were the client requirements, terms & conditions?

Internal elements include – internal pricing mapped to customer offer. GM% at each stage of our quote? Who were the partners in this deal, their pricing? What were the approvals given? What were the exclusions? Was this a one-off deal? How did we mitigate the risks?

And if you can have your sales team also capture external competitive data, it will be a bonus.

You require just two things to get this done – (1) a system that can help you capture>> link>> process>> analyse (the internal and client facing elements), and (2) discipline - by the team to judiciously capture the competitor info at each and every deal. That’s your formula to improve deal closure ratio – 1 (system) + 1 (discipline). Once both the internal and client facing elements are at one place .. insights will flow.

Not easy .. but even if you improve your deal closure by 1%-2%, you will have a positive ROI!

Here are some more examples:

1. What is my market share – by BU/territory/value?

2. Who is my closest competitor, for large deals?

3. Who are my top competitors, by industry verticals?

4. What is the % difference between our prices and that of our nearest competitor when quoting in this territory?

5. If we have won/lost deals in this territory (for a particular BU), which were the top-3 competitors and their average prices?

6. Which partners are offering me price benefits which are resulting in wins?

7. Has OEM-1 prices reduced in proportion to our total deal price for the recent 5 bids?

The core to decisive sales win loss analysis is having a central place to house all the data related to – bids, pricing, approval, and competition. So that you can connect the dots and win every battle at the negotiation table. Well almost!

Comments and observations welcome at hello@pricebid.co.