No matter how confident you are in your sales team, you know that every deal has some risk in it until the day it closes. While the most successful reps do what they can to proactively minimize this sales risk throughout every stage of the sales cycle, it can oftentimes blindside you, especially when it comes from the buyer’s side of a deal. Without recognizing that early enough, you'll find yourself powerless to eliminate it — at the most inopportune time in the quarter.
“The majority of times I see a deal slip out of the quarter at the last minute is because reps — and even the most senior executives — were blindsided by a step in the process,” says Jake Mars, VP of Sales at Alteryx. “And a lot of times it’s not necessarily the rep who didn’t miss a step, but it’s the prospect who didn’t understand their own internal buying processes.”
Sales teams often trust that their champion or buyer has the authority or knowledge to take the deal across the finish line, but sometimes that’s not the case. In a recent webinar, Jake Mars and Kevin Knieriem, Chief Revenue Officer at Clari, share 3 common myths sales teams believe about their buyer that introduce risk into a deal — and how to avoid them.
Myth #1: Your buyer has the power to make the final purchase
Understanding the path to close is key to ensuring the viability of a deal, and part of that formula is knowing who is needed to execute the deal. According to Mars, a mistake that many newer sales reps make is believing their contact or buyer has the power to make the final purchase. Unfortunately, this isn’t always true. “Title does not always equal power,” Mars says.
Just because someone is a C-level executive does not mean they have a budget, he warns.
“I've met very powerful CIOs, and I've met CIOs that are basically ‘retired in chair,’ where they don't have any ability to spend and don't have any budget,” Mars says. “Yet, at the same time, I’ve met people at the director level or the VP level where they’re running an incredibly powerful program or an initiative, and they can yield a ton of power and have a very high ability to spend.”
Sales risk solution: Make a strategic request
Understand who has the political capital and ability within an organization to move your deal forward. If you're not sure, test it out: Make a request that requires some amount of internal clout.
“If your contact is a real player, they'll make it happen,” Knieriem says. For instance, ask for an alignment meeting between your CEO and theirs, or request access to a few key stakeholders.
“Understanding how you're going to work with a customer is key,” Knieriem says. “You need to understand how they do business and if you're not getting alignment with them or if they're not able to tell you how they do business, then you quickly know that you don't have someone that can help you move your deal forward.”
Myth #2: Your buyer knows how to navigate internal processes and politics
If you’re dealing with a company that’s never bought your type of product or service before, or has only done it once or twice, it’s a mistake to assume anyone in the company, even at the executive level, is fully versed in the buying process. Even if the company has bought a similar product in the past, it doesn’t guarantee that your contact has.
“You need to know what are the major steps that need to happen with your prospect that will lead to a signature,” Knieriem says. “What are the sequence of events? What are the actions to close? What are the steps they need to take on their end to make this happen?” If you can’t answer these questions, you risk having the deal go sideways.
Sales risk solution: Ask the right questions
Ask the right questions to uncover any steps in the process not originally documented, then create a mutual action plan that is shared with your buyer (and other key stakeholders) to educate them on typical steps based on your experience working with similar companies. This will ensure that no key parts of the process have been overlooked.
“The mutual action plan is absolutely mission critical for us,” Mars says. “It has every step in the process and is shared, and agreed upon, with the customer.”
Your action plan should cover all of the required processes, including expected timing and which stakeholders need to be involved. Outlining and understanding the entire procurement process is vital.
Knieriem recommends asking your buyer about what their process looks like and how budget is handled.
“How does the company make a decision on budgeting something that is not in the budget?” Knieriem says. “This something we've all hit in our careers: We're selling something that got people really interested, but it's not in the budget for this fiscal year. How do they unlock it? What kind of decisions are they going to have to make internally?”
Will they be able to go fight for funds that might not exist, which could require cutting something else out of the budget or convincing others that their request should take priority over others? Knieriem recommends considering the following:
- How is your buyer motivated?
- How is your buyer compensated?
- What are the metrics your buyer is tied to?
- What’s the strategic growth initiative in the company your buyer is most focused on?
All of these questions help inform your team whether or not your buyer is equipped to fight for your deal.
Myth #3: Your buyer can make the purchase alone
If your deal is single-threaded, meaning there is only one contact on the deal, then your deal is at significant risk for a number of reasons:
- The decision-making process often requires several sign-offs from various stakeholders
- If your single economic buyer leaves the company, you have to start the selling process from the beginning (assuming you can even schedule a meeting with someone else at the company)
- The actual buyer is not always the end user of the product and without buy-in from the latter, implementation and adoption can be a challenge, reducing your chances of renewal.
Believing that your buyer can make the decision alone opens you up to huge risk, says Mars. “By only dealing with one person within an opportunity, it’s hard to tell if they’re in the power base or whether they have the juice to get the deal done. And frankly, without additional validation, you could end up working on a science experiment with them for weeks, months or even quarters.
Knieriem cautions that it’s important to have access not only to your sponsor, but also the influencers and trusted advisors within the company, as well as any executives who need to be involved. “If you know there are 3 stakeholders in an opportunity, and you can get 2 of those 3, you might have a pretty good chance of winning,” Knieriem says. “If you get all 3, it’s a home run, but if you only get 1, you'll probably lose. It’s a lot of hard work, but you need to be able to get other constituents in an organization on board.”
Sales risk solution: Identify additional stakeholders
If you feel your buyer is reluctant to let you get outside of them even though the deal is moving forward, find out why or educate them on why it’s important for the deal to have additional stakeholders involved.
“You may need to explain to your champion why you need to validate the deal with other stakeholders and how getting more people in the boat will help everyone de-risk the deal,” Mars says. “You always want to make it sound like you’re trying to help them, because at the end of the day, you are. More stakeholders mean more validation, which means a better chance your contact will be able to get the deal done and get the product they need.”
One way to capture, track and gain visibility into all key stakeholders is by automatically pulling contact data from your rep’s calendars and email threads. Clari's Autocapture automatically pulls all your missing contact data, and associates those contacts with the proper opportunity in CRM. We found that on average, 70% of the sales rep contacts never make it into CRM, which means critical influencers may not be visible to the rest of the revenue operations team.
With Autocapture, the entire revenue team has better visibility into whether a deal is multi-threaded or not. This allows the sales team to get the necessary stakeholders involved early on and marketing can send valuable content to all key decision makers (rather than just one) to help close the deal faster.
Don’t overlook sales risk from your buyer
It’s hard enough to completely de-risk your deal. Make sure you’re not adding unnecessary risk by falling for any of these three common myths about your buyer.
Verify your contact’s buying power, validate that both you and your contact understand the entire buying process for their business, and consider Clari Autocapture to mitigate risk and pull in stakeholders that are associated and engaged with a deal.