In sales you either win or you lose. There are no ties and there is no credit for almost.
So whether your deal is forecasted at 10%, 25%, 50%, 75% or 90% probability to close, it’s still worth zero dollars.
You can’t book a deal that hasn’t closed (signed).
You can’t bill a customer that hasn’t closed (signed).
You can’t get paid on a deal that hasn’t closed (signed).
So why do we still probability weight our deals? Very simply, It’s so finance and management can predict (best guess) monthly, quarterly and annual revenue numbers. They are making a calculated guess based on a salesperson’s ability to forecast a deal. And I can tell you that I have never met a salesperson that can 100% accurately forecast any deal. That is not, nor should it be a core strength of a salesperson.
Here is what I know to be the truth.
Sales is a zero sum game.
You either win or lose.
You either get paid or you don’t.
You either hit quota or you don’t.
You either make president’s club or you don’t
There are only two percentages that I truly care about and that is 100% or 0% period. You’re either going to close or not going to close and almost doesn’t count.
With that in mind, I believe the process of closing a deal should be simplistic and should be created for the seller and not finance or management. Let’s take the probability out of your deals and use a simple process to track your deals.
I have three stages in my process:
Opportunity stage – you have determined that there is a mutual fit and the deal is worth pursuing.
Consideration stage – the customer has told you that they are considering your solution/product/service.
Closed – Closed won is a signed agreement, and Closed lost is anything less than a signed agreement.
For those of you that still feel uncomfortable not having percentages to help track your deals, here is a rule of thumb based on simple logic.
Opportunity up to Consideration = 0% -49%
Consideration up to Closed = 50% – 100%
Closed = 100% or 0%
You have a 50/50 shot at closing a deal at the mid-way point!
The devil is in the details and for the purposes of this post I’m leaving out a lot of detail. In between each stage you need to follow your process to close, checking off the each step along the way. These steps move the deal along and help you determine whether a deal will close. The process and steps should be customized based on your deal type, complexity, velocity, size, market, etc. There is no one size fits all model, nor is there one perfect playbook.
As a seller, FOCUS on working “your” process, being honest about your deals, and working all the way through to the close, EVERY TIME. You do that and you’ll be on the 100% side more times than your peers. And let others worry about probability %.
If you’re interested in my thoughts on a detailed Sales Process including stages and steps just ping me.