Let me get something off my chest. I fundamentally do not agree that the further you are through a set of sales stages increases your chance of winning. It just doesn’t.
The value of Sales Stages
Sales stages are a useful, STAND ALONE, indicator of where in the sales process you are. Typically they cover stages such as “suspect, prospect, assessing needs, proposal submitted…. Etc”. Whilst in an ideal world the sales stages will reflect the way their customers buy, for many they don’t.
Sales stages are brilliant for sales management, so they can assess the current stage of development for the opportunity. But, and it’s a big but, this doesn’t relate to probability of winning.
Sales Stages are not a gauge of probability.
Many playbooks and sales processes link stage with the probability field, infact many CRM systems do so as standard. This means that as salespeople check fields and move through the sales stages the probability increases. As many of these fields are for internal review purposes only this has no bearing on whether the customer perceives greater levels of value in the offer.
Case Study Example.
Let’s look at a recent example. One of our customers had a specific deal where they were up against an incumbent company. The customer was happy with the performance of the competitor who offered a very similar (dare I say it commoditised) offer. The sales person wanted to pitch themselves as an alternative. This involved a few days’ worth of effort (and associated cost) for the proposal development and approvals in the company.
On completion of the proposal the sales stage moved from ‘assessing needs’ to ‘proposal submitted’. The probability went up from 40% to 70% as a result. Movement to 70% added it into the ‘Commit’ stage for the forecast and 70% of the £150,000 value was added to the weighted forecast.
Our assessment was this. They were competitively disadvantaged from the outset. It was not true that submission of a proposal meant they had a 30% greater win chance. In reality they were as unlikely as they previously were to win this business and this was not even at 40%. This was a long shot and more like 10-20%. Yet £105,000 was added to the forecast and included in the executive briefings. They lost the deal to the incumbent.
So what can you do?
First we recommend that you uncouple sales stages and probability, allowing the input of probability either manually or with the ability for the salesperson to overwrite the field with a true value.
Next, set up a standard and objective approach to qualification that will help you understand win chance. This will help you to ‘score’ opportunities against the key dimensions of success, the things that make a difference to winning and losing in your business. Our tools/approach provides the fundamentals but we suggest many will want to customise for their specific situation. Once you have the opportunity scoring fine-tuned to your particular business, this will prove to be a better gauge of win probability. Use this alongside sales stages to highlight the current development stage and you are all set.
You now know where you are in the sales (buying if you can) process and win chance. Armed with this sales management can be more data driven and make better choices. Good selling!