As a sales manager one of my least favorite activities was creating forecasts every month. One of the things that made it difficult was the fact that in my mind most sellers generated proposals too early when developing opportunities. They believed it was a step toward getting orders.
In my experience, a proposal represents activity but not necessarily progress.
There is a problem in issuing proposals too soon. Unlike fine red wines they don’t age well. My thought is that after proposals have been issued, after 45 days the probability of resulting in orders is less likely with each day that passes by.
For sellers having several stale proposals in their pipelines, forecasting amounts to pushing dates out each month. They will strongly defend leaving them in the forecast, primarily because if they are taken out it will become clear they don’t have enough activity to make their numbers.
I believe sellers delude themselves. If they add up all the revenue from each opportunity the figure may approach the GDP of a small country. Sellers conclude that if they can sell a relatively modest percentage they will achieve their quotas.
The problem is that for most stale proposals, buyers have already gone with another vendor and didn’t want to deliver the bad news or the opportunity is going to wind up with “no decision” that will ultimately be bad news for all vendors that issued quotes.
A Better Way:
- I suggest that after 45 days with no contact from prospects, the best course of action is to withdraw proposals rather than just remove them from the pipeline.
- Consider sending a letter to prospects (please don’t overnight it) by sending a snail mail letter return receipt requested that would cost you about $3.00. It will be more formal than an email and you’ll be certain that the person received your letter.
- In the letter indicate that you don’t feel you had done a good job of uncovering the prospect’s business issues and potential value and your intent is to withdraw the proposal but you would welcome a chance to have a conversation to see if it makes sense to consider issuing a revised proposal.
From here, it’s binary. The options are:
- You never hear back from the prospect so you should remove the “opportunity” from your pipeline/forecast. Oddly enough this is a positive result. Once dead wood is removed the seller and manager will have a more accurate picture of the health of the pipeline and can take the needed actions.
- The buyer contacts you and indicates the company is still interested. This is the desired result and gives the seller a second chance potentially to gain access to other people and to either issue a more compelling proposal or realize there isn’t sufficient value to warrant a buying decision (nor another proposal).
One of the core concepts of CCS® is that bad news early is good news. Realizing a loss after a proposal has languished for months isn’t “early” but I think we can agree it’s a case of better late than never.
By John Holland, Chief Content Officer, CustomerCentric Selling®