Why Don’t Sales Close?
In your experience, what are some of the reasons why a sale doesn’t close? Over the last decade of coaching and training sales professionals in many industries, here is a short collection of some common reasons that are shared with me. Which of these do you run into in your business?
- The prospect’s budget is being spent on other priorities.
- Your proposal was beaten out by a cheaper competitor.
- The sales person forgets to follow up with the prospect.
- The prospect says “We looked at your proposal and are not interested in doing anything.”
- The prospect doesn’t have any money to spend on your products right now.
- The sales person couldn’t get access to the right decision makers.
- The buyer was confused about the terms and conditions.
- The group of decision makers could not come to agreement as to what to do so they opted for no decision.
- The prospect couldn’t see the value in what was being offered.
- The buyer says they will “discuss it internally and get back to you” but never does and disappears later.
What Influences The Buying Decision?
Studies have shown that in a typical B2B (business-to-business) consultative selling process, shown below, one step of the process accounts for almost 80% of the impact that influence the closing of the sale:
Step One: Introduction & Opening 8% of sale impact
Step Two: Discovery & Needs Analysis 79% of sale impact
Step Three: Solution Presentation 12% of sale impact
Step Four: Closing the sale 1% of sale impact
As sales professionals we can almost mess up on the other three steps of the selling process and still close the sale. However if we mess up on the Discovery or Needs Analysis step, there is almost no chance of closing the sale.
What Should My Needs Analysis Step Include?
Many companies have not formalized what would be included in their initial Discovery Meeting or Needs Analysis conversation. As important as it that stage is in impacting the final buying decision, it is critical that companies have a clear outline of what the Needs Analysis steps should include. The sales industry is full of acronyms. Here is a helpful acronym that I developed to help my clients remember the five critical elements of a solid needs analysis.
P.I.M.A.T. PIMAT stands for Problem, Impact, Money, Authority and Technical. Let me explain each:
Early in your needs analysis you should ask questions that uncover what the prospects business problems, issues or challenges are. You can also ask questions about what goals, objective or initiatives are top priorities for the business. How can you successfully sell your product without knowing what problem your product is suppose to solve for your prospect?
Next you should be asking questions that uncover the consequences and impacts that the problem is having on their business. It is best to ask questions that help you understand the financial and/or personal affect the problems are having on the business or the decision maker. If the buyer is not discussing these topics with you, chances are their buying motivation will not be strong enough to lead them a close.
Next in your needs analysis you should be asking questions about their financial budgets. It is critical to know how much they have allocated to solving the problems at hand. Without this knowledge you are flying blind when it comes to preparing your proposal or estimate for them.
Towards the end of the needs analysis you will want to make sure to ask questions that help you understand who all is involved in the decision making process, what process they follow when making buying decisions, what criteria they use to make those decisions and what timeframe they are working with in their decision making. Without a solid understanding of these elements you will be travel blindly about, not have a map to follow on your journey to close the sale.
Finally, you will need to ask questions that help you know how to customize or modify your product or service in a way that meets the buyers technical needs. Common questions that deal with size, speed, color, configuration, design, the scope of work, etc are all topics that help you know what to include in your bid or proposal.
How To Defuse The Bomb Before It Goes Off
Sales professionals hate it when all their hard work and effort “blows up” in their face at the end of the selling process. We must learn the valuable lessons that lost sales teach us. The lessons are to defuse the bomb before it goes off. You do this during the needs analysis stage of the sales by asking good questions that are focused on the prospects problem, the impact of the problem, money, authority and their technical needs. When we slow our needs analysis down and cover these five areas effectively, we can increase our closing ratio substantially, maybe by even as much as 80%. So here’s to more closed sales using the PIMAT acronym in your needs analysis.
Until we meet again, remember, don’t just sell. Create value, do work that matters and make a difference for your clients!
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Terry L. Hansen is a popular speaker, consultant, trainer, and author on helping sales and marketing teams improve their ability to find more sales prospects, close more sales, and increase customer loyalty. Connect with Terry on Twitter (@TerryLHansen) or on LinkedIn (Linkedin.com/in/TerryLHansen). Contact him toll free by calling 844-205-5054 or email him at email@example.com. Visit www.TerryHansen.net to learn how Terry can help your company increase its sales productivity.