It’s that time of year.
When sales teams around the world are under pressure to get deals closed to meet year-end quotas.
I have worked with many companies in that situation.
And here’s what I’ve found:
The most successful executives apply five Q4 sales strategies.
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Q4 Sales Strategies
These sales strategies do not guarantee they hit quota. However, they do put these executives and the sales teams in with the best possible chance of success.
Here are the five Q4 Sales Strategies they use:
- Sort the wheat from the chaff.
- Determine whether there is enough pipeline to hit quota.
- Prioritize time and energy on high impact deals.
- Create a close plan for each high priority opportunity.
- Protect themselves against margin-eating discounts.
So here they are:
Five Q4 sales strategies you can apply right now to achieve year-end quota.
1. Sort the wheat from the chaff
Here’s the first Q4 sales strategy these executives apply.
They weed out deals that with the best will in the world are not going to close successfully in Q4.
It’s February 2017.
Sarah Jones is under pressure to boost her sales pipeline.
The pressure is coming from the VP of Sales. “Come on, Sarah, you’ve got lots of potential in that territory of yours. Let’s ramp up the pipeline.”
You can’t blame him.
The Board set aggressive growth targets for the year and expect the VP of Sales to deliver.
Sarah works through her Accounts.
She picks a prospect with whom she had a meeting three months ago. “I reckon there’s a decent chance with this one,” she thinks.
Sarah creates an opportunity in salesforce.
“It’s bound to close sometime this year,” she says to herself hopefully.
Of course, Sarah doesn’t want to put herself under any unnecessary time pressure. That means she enters the Close Date as December 31, 2017.
The pipeline has increased. Job done.
That scenario plays out in companies around the world.
There are three ways to sort the wheat from the chaff with Q4 deals.
a) Review Opportunity Stages and Get Real
In Sarah’s company, here’s what the pipeline looks like by the time we reach mid-Q4.
There’s a surge of deals due to close in December.
But how realistic are these opportunities?
For example, if the sales cycle is typically three months, then are the deals in the prospecting and investigation stages of the sales pipeline realistically going to close in Q4?
In other words, the first step is to review deals by Stage and Close Date. Remove dormant deals from the pipeline. Move deals that still have legs, but realistically won’t close in Q4, to a later date.
b) Review Opportunities by Created Date
Here’s another way to assess the strength of the Q4 pipeline.
Look at deals due to close in Q4 by Created Date.
Again, if the sales cycle is 3 months, carefully examine deals that have been open substantially longer.
Shake them out of the tree if they’re unlikely to close this quarter.
c) Analyse Pipeline Quality Metrics
In addition to the age, two other deal metrics provide insight on pipeline quality.
- Number of Close Date month extensions.
- Days since last Stage change.
This dashboard table highlights these quality metrics for deals due to close in Q4.
We can see, for example, the Oxted Manufacturing opportunity has been open 237 days, the Opportunity Stage was last updated 100 days ago and the Close Date has moved four times from one month to another.
I don’t know about you, but those figures do not give me a great deal of confidence that the deal will close in Q4.
So that’s the first of the Q4 sales strategies:
Sort the wheat from the chaff.
Doing this will help hugely in subsequent recommendations.
By the way, an easy way to obtain these reports is to download the free GSP Sales Dashboard if you are not already using it.
2. Determine whether there is enough pipeline to hit quota
This Q4 sales strategy recommendation is critical.
The answer to the question of whether you have sufficient pipeline to hit quote is a major influence on your Q4 sales strategy.
How do we know if the pipeline is big enough?
One option is to take the deals you have already won and add the full sales value of the pipeline.
That’s likely to give you a positive feeling. The two added together will likely exceed target.
Unfortunately, it’s not realistic. I doubt you are going to win 100% of your sales pipeline.
A more pragmatic way is to set a realistic probability of winning each deal. Then use this to calculate the Expected Revenue of the pipeline.
Remember, in salesforce you do not have to accept the default probability associated with each Stage. Modify these probabilities on individual opportunities.
Then, to determine whether you have enough pipeline to hit Q4 target, create a report based on Expected Revenue. Include both Closed Won and pipeline deals.
Compare the total value in the report with your target.
Now you have a choice:
- If the Expected Revenue exceeds target, focus on closing the deals you already have.
- If the Expected Revenue is smaller than your target, you need to decide if it is realistic to increase the pipeline with deals that will close in Q4.
It may not be easy to find deals that realistically will close in Q4.
The circumstances will be different for every business. However,
- Are there existing customers to whom repeat sales are possible?
- What about upgrades?
- Can you make cross sales to customers that bought certain products?
Only you know the answer to these questions.
However, in my experience, it’s a mistake to seek-out new pipeline with smaller prospects. Often, there’s an assumption these lower value deals will close more quickly.
However, it often takes as long to close a smaller customer opportunity because the relative importance of the deal is greater.
Ideally, don’t leave it until the very end of the year or Q4 to measure pipeline against target.
The GSP Target Tracker is a powerful way to compare won and pipeline deals with target throughout the year. For each month and quarter, it gives a clear indication of whether you have sufficient weighted pipeline to achieve quota.
3. Prioritize time on high impact deals
The third of the Q4 sales strategies sounds obvious:
Focus time, resources and energy on opportunities that make the most significant contribution to quota.
However, there are three dimensions to prioritizing Q4 opportunities:
- The sales value of the deal.
- The probability of winning the deal, and
- Whether multiple small opportunities can combine into one larger deal.
You can prioritize on the first two dimensions by creating a report that lists the opportunities by Stage, Amount and Probability:
You may also want to adapt the report to show the pipeline by customer type.
This helps you prioritize deals with existing customers that despite their Stage may have a higher probability of a successful outcome.
Consider also, whether there are Accounts with multiple opportunities.
In the GSP Sales Dashboard, we include a table and report that shows the pipeline by Account.
In this example, High Hill Estates has opportunities due to close in Q1 AND Q2. Is it possible to amalgamate these deals into one larger opportunity, with a successful close in Q4?
Easily identify the deals you and your team will focus on using a separate field “Q4 Focus” field.
Having done this analysis, the goal now is to stick to your higher priority deals. Don’t get distracted!
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4. Create a Close Plan for each high priority opportunity
Many businesses will create a Close Plan for important deals.
The Q4 sales strategy brings this to a head.
However, there’s no need to overdo it.
Create the close plan using a simple rich text field on the Opportunity.
Alternatively, enter it into the Chatter feed for each Opportunity.
This is the approach used by many of our customers has the advantage that managers, colleagues and other internal stakeholders can comment and collaborate on the close plan.
Here’s another common element of this Q4 Sales Strategy:
Agree a Go / No Go Date with the customer.
This is not the date you expect the deal to close. Nor is it a commitment by the customer that you will win the deal.
Rather, it is the deadline date by which you and the customer will aim to close the deal. One way or the other.
This date for example, might be 15th December.
The outcome may be a win or a loss, we don’t yet know. The Go / No Go date is the point at which you both agree the deal cannot be closed in Q4 and you will instead revisit the opportunity in the New Year.
In salesforce, record these dates in a custom field. Track them through a report and Q4 dashboard chart.
The previous Q4 sales strategies are about identifying realistic deals, prioritizing effort and achieving a successful outcome.
The final Q4 sales strategy takes a different approach.
5. Protect yourself against damaging discounts
We all know discounts and volume related deals are sacrificed in return for Q4 close dates.
Indeed, many companies have inadvertently trained their customers to leave purchases to the end of each quarter.
However, this Q4 sales strategy is to keep track of the rationale for each discount and give-away.
For example, you give a discount or preferential terms because the customer agrees to buy 100 units over three months (e.g. in a framework agreement).
Keep a record of the rationale for the discount or special terms.
That’s because, let’s say, it turns out the customer only ever orders 80 or 90 units.
You won’t always go back and negotiate a retrospective price increase. However, this information is invaluable when negotiating future discounts.
Use this information now when the customer is putting you under pressure on a Q4 close.
Look back over historic deals. Did the customer fulfil their side of the bargain? If not, use this information to strengthen your negotiating hand.
The Chatter feed on each opportunity is a good place to record the rationale for discounts and other terms given away in return for customer commitments.
That’s the fifth of the Q4 sales strategies that successful executives apply:
Keep track of the rationale behind the agreement and make it easy to find when you are under pressure.
Our blog post, 10 Expert Tips To Improving Discount Control gives more advice on avoiding unnecessary give-aways.
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