Two Factors That Impact Sales Win Rates
I get into a lot of conversations with sales people and leaders about winning business. Win rates are too low; I ask people what they think they need to do to increase the win rate.
Usually the answers have something to do with product/offering capabilities and competitiveness, and the standby-price.
But, as we dive into really understanding what most impacts win rates, we find two factors dominate: First, we are chasing the wrong deals. Second, too many of the deals we chase aren’t real.
Both of these are qualification issues, and the fastest way to improve sales performance is to disqualify more viciously.
What does this mean?
First, we chase the wrong deals when we haven’t defined and focused on our Ideal Customers! Our ideal customers aren’t just organizations of a certain size, or organizations in a certain industry, or functions within these organizations.
What’s Your ICP?
Recently, I had a conversation with a CEO of a start-up. His company was struggling to get traction, I asked, “What’s your ICP?”
After thinking a moment, he replied, “Companies in any industry, between $50-500M in revenue?”
He paused, “We can also satisfy the needs of large companies–those over $500M to billions.”
He paused, again, then said, “Some start-ups can use us …”
I then asked, “What organizations aren’t in your ICP?” He couldn’t respond.
Then I asked, “What personas?”
He quickly replied, “Sales—salespeople and any kind of sales manager can use our products.”
Hmmm … so much for targeting.
While that sounds like an exaggeration, too many organizations define don’t define their ICP or have far too broad a definition. As a result they chase everything, diluting focus and results.
Focusing on everyone is no focus at all. Our ICP needs to focus on the customers that have the problems we solve–and we don’t solve all the problems of the world. There are industry, market, firmographic aspects to the definition of our ICP. There are market maturity aspects (e.g. are they innovators or laggards), and there are firm “personality” aspects to the ICP.
The same applies to the personas we target within our ICPs.
The more narrowly we focus, the more impactful we can be and the better our win rates. Doing this, provides us a rich set of customers we can reference, credibly. It gives us much deeper understanding or the critical business issues we address. It enables us to focus on people who are aligned with our thinking in how we address problems.
Solving the Problem
Now that we’ve identified our ICP and are focusing exclusively on them, what’s the next critical element to improving our win rates? We know there is a high likelihood that our solution will be a good fit, but that is insufficient to drive our success.
The next critical element is, “Do they have the problem we solve and are they committed to doing something about it?”
“Well duhhh, Dave, we know that!”
I think we have to go much deeper than, “We think they have this problem.” We have to know that they are committed to doing something about it.
To know this, to validate their commitment to change, we need them to be able to answer two questions:
- When do they need to have a solution in place?
- What are the consequences if they don’t have a solution in place by that time?
If the customer can’t answer these questions, the probability that they will buy plummets. There is no urgency. While they may want to buy, they don’t need to buy. So trying to sell to them is a waste of your and their time.
Often, the customer may not know the answer to these questions. But we create great value in helping them develop the answers to these questions—and focusing our ICP equips us with the ability to do this.
While the answers to these questions is important for the customer and us in qualifying the opportunity, it gives us more as they go through their buying process. We know customers get derailed through their buying journey. Their attention gets diverted, priorities shift, or they just lose interest.
Knowing when they need to have a solution in place and the consequences of missing that date enables us to have fussiness focused discussions about the impact to them. We can remind them and re validate that need to buy–driven by the impact on the customer, not our need for a PO. (And knowing this drives forecast accuracy tremendously.)
These two simple things are fundamental to our ability to win. Plus, this is something that can be implemented very quickly, so we can see changes in our win rates very quickly.
Are you doing these two things to improve your win rate?