The average win rate in B2B software sales is around 20%. Yours might be higher or lower, but then again, these numbers don’t get reported on in a consistent way anyway. Some sales teams define win rates as won opportunities divided by total opportunities created in that period, others only count the qualified opportunities, or even opportunities that reached a certain stage.
What does seem to be consistent across most teams is a recurring reason why deals are lost: poor qualification. You came in way too late, competitor X had already influenced things, previous attempts had lead to nothing, or the prospect never was going to be able to afford your solution. For whatever reason, you agree it just wasn’t the right opportunity. After it was lost.
But here’s the thing. The next time around, the exact same scenario plays out again. Once more, you spend precious time and energy on something that you will label as a waste of time later on. It’d be easy to simply blame the rep for being too pushy or enthusiastic to chase the deal, but the reality is that for many of us, rational reasoning seems to get suppressed in the heat of the moment. Our judgement gets clouded into Positive Delusion – the ungrounded hope that it might all work out.
So what to do?
Yes, we do need hope and optimism, but not if it leads to poor decisions. Three simple practices can help avoid the downside of Positive Delusion in sales.
1. Insert a fresh set of eyes in the early stages
All too often, qualification is just a subjective set of poorly defined criteria which the rep assesses in a pretty solitary way. Improve the process by creating a qualification review that involves the Solution Consultant, or the Front Line Manager. While there might be some apprehension for yet another review, the reality is that inserting some objective reasoning early on in the cycle will free up time later down the track.
2. Start with the end
This saved time should be spent on pipeline activities. Work out a Sales Productivity Model that shows how many opportunities will have to be generated to get to target. This will often serve as a wake up call; you simply can’t afford to waste time on bad opportunities. Pipeline generation requires focus and discipline; clear activity targets on lead generation are at the very heart of that.
3. Do Win/Loss analysis
The rather lose practices sales teams tend to have on reviewing successes and mistakes not only limit their ability to learn and improve, it also hinders accountability. At the very least, collectively agree on the “Lost Reason” before you log the lost opportunity into your CRM. Data is delusion’s ultimate nemesis, but only if it that data is valid.
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