You’ve had a week to digest the results of Q3…and you’re still just as stunned and shell-shocked as you were at 11:59 on September 30th:
How could you have missed your Q3 number, and by so much?
As recently as in the last week of September, the mood around the office was incredibly optimistic. Your reps felt good about closing the outstanding opportunities they were working on through to the final hours. So what if the quarter’s sales results would look more hockey stick-ish than you would prefer? Hitting your number was what mattered.
A week into Q4, and you’re still trying to sift through the Q3 post-mortem, with no clear answers. Just why did you miss your number in Q3??[image source_type=”attachment_id” source_value=”39495″ align=”center” width=”500″ height=”334″ quality=”100″]
1) Your big deals didn’t come in
The enterprise-level beast is a wild one to tame. Trying to lasso an enormous bucking bronco and tie it down is much more difficult than dealing with a tame little foal. The fact of the matter is that opportunities with a higher-than-average selling price – far above your typical ASP – close at a lower rate than smaller opportunities. This is just the cost of selling to enterprise-level customers; there are more hoops to jump through, more decision-makers to deal with, more complexities to sort out.
If you had counted on three $50,000 deals closing in Q3, and only 1 actually did close, that represents an unexpected shortfall of $100,000. No wonder you missed your number! Those large deals might deliver a massive boost to your progress against the goal when they do come in, but when they don’t, you’ll really feel the miss where it hurts. The key to dealing with larger opportunities is two-fold:
- Get them locked up early – Don’t leave the final details to the last minute – they’re never as easy to deal with as with smaller opps. For instance, enterprise companies have much more complicated legal processes, so make sure to get started on all that paperwork early. Even if they don’t sign till the last day, you want to ensure that pen to paper is the absolute final step they have to take
- Adjust your expectations accordingly – It would be foolish to treat your opportunities with above-average ASPs the same as you would treat your other opportunities. Not accounting for larger opportunities is one of the most common reasons sales forecasts are inaccurate; don’t make that mistake.
2) You didn’t do your homework on your pipeline opportunities
Who owns the sales forecast? If your forecast relies primarily on the word and intuition of your sales reps, you have to know: there’s a better way to actually forecast accurately. Sales reps have ‘happy ears’ and tend to be overly optimistic, believing that every opportunity will close. It would be naive of sales managers to accept all rep feedback as the word of God; instead, data-driven sales managers should be diving into late-stage pipeline opportunities and measuring them against historical benchmarks to get a sales forecast they can rely on.
What about your pipeline review meetings, especially in the last month of the quarter? Do you have a clear idea of what a winning opportunity looks like, and thus were able to help your reps prioritize the best opportunities to work on? Did you provide sales coaching guidance to help them advance tricky opportunities down the funnel?
Finally, how diligent are you and your reps when it comes to CRM data entry? After all, bad data might have thrown your entire sales forecast out of whack from day 1 of the quarter. If a late-stage opportunity had pushed into next quarter and the responsible – or should we say irresponsible – rep forgot to change the close date in Salesforce, you were probably misled into thinking that opp would close. You have to instill a sense of discipline and make sure all data entry into your CRM is airtight.[button size=”large” align=”center” full=”false” link=”https://offers.insightsquared.com/pipeline_mgmt.html?blog_source=Organic&blog_medium=Blog&blog_campaign=Pipeline%20Management%20″ linkTarget=”_blank” color=”blue”]Learn More About Managing Your Pipeline»[/button]
3) You didn’t plan accordingly
Finally, you might’ve missed your number in Q3 because you set your team up for failure! Or rather, you didn’t give them the resources they needed to succeed and hit the goal. The well-worn cliche about failing to plan and what not certainly holds true in sales management. You need to make sure that you have the things in place you need to hit your target, including:
- Head count – All the opportunities in the world won’t make a lick of difference if they’re sitting there idle because your SDRs and closers are too busy to qualify, work and close them. Make sure you know the capacity of your current sales team, and make the necessary hires – accounting for ramp time – to help you hit a higher goal.
- Pipeline – Similarly, all the best sales reps in the world won’t matter if they don’t have any opportunities to convert and close. If, halfway through the quarter, it looks like your sales pipeline is woefully empty, you can pull the right levers to generate more pipeline. Whether that’s a heavier emphasis on marketing spend, or a dedicated outbound prospecting strategy, depends on your company and team. Whatever the answer is, be sure that you have it well before the end of the quarter.
Missing your number in Q3 was a terrible feeling, one you don’t want to experience again in Q4. Figuring out why you missed in Q3 can go a long way toward addressing your shortfalls in Q4 and ensuring that you close out the year as strong as possible.[image source_type=”attachment_id” source_value=”22194″ width=”632″ height=”250″ quality=”100″ link=”https://offers.insightsquared.com/12-must-ask-questions?blog_source=organic&blog_medium=blog&blog_campaign=12questionssales”]