“Target Close Date” Must Be Kept Sacred!
The “Target Close Date” is one of the most important aspects of pipeline, forecast, and deal integrity. Anything else in our deal strategy can change, but the Target Close Date must be kept as sacred!
Now before I get everyone piling on, saying I’m totally unrealistic, that I don’t recognize the realities of sales, or that the customer is the key determinant of the close and it’s out of control; give me a chance to explain my position.
There will always be good reason to change the target close date–but, that’s the point–there has to be good reason, any changes must be done thoughtfully and purposefully. But too often our problem is:
- We don’t set a target close date based on a compelling event/sense of urgency based on the customer’s needs to have a solution in place.
- We set unrealistic target close dates, with no commitment to meet them.
- As things “slip” in the sales/buying process, we have a day for day, week for week slip in the target close date.
Let me dive into these a little further:
We don’t set a target close date based on a compelling event: Most of the time sales people set a target close date based on when they want to close the deal, when they need the PO to make their number. The target close date must be established based on when the customer needs to have a solution in place and operational. Now there’s a lot in that sentence, let me break it down further.
We must understand what’s driving the customer to make a change and when they need to have a solution in place. Sometimes, it’s pretty easy, they have a looming new product launch, they have a new plant, they have a deadline for their customers–all these drive a sense of urgency and hard deadlines by which a customer must make a decision and have a solution in place. Sometimes there isn’t a hard deadline or an event we can leverage. In that case, we must help the customer establish a sense of urgency and a deadline by which they want to start achieving their desired goals. The only reason customers buy is to achieve a desired goal. It’s our job to understand this and to help them establish a timeline by which they must start achieving it. We can help the customer establish that timeline or sense of urgency by focusing on the consequences of not making a decision or changing. Are they losing sales? Are they losing productivity? Are they losing cost savings? Are they losing customers and share?
If the customer has deadline–real or self imposed–to start seeing results, then they have no deadline for making a decision. One might question if in this case the opportunity is really qualified.
So it’s critical that we and the customer are aligned around the business reasons and urgency for making a decision and having a solution in place.
Once we and the customer agree to the date they expect a solution to be in place, with the customer, we have to work backwards from that date: How long will it take to implement the solution, how long does it take to ship/install the solution components, what lead times (for instance if we have to build the product like a machine tool) do we have for being able to provide the solution? What is the contracting/procurement process like when they do agree on our decision, how long does that take? All these help us establish a date of when the customer needs to make a decision and provide a PO? We arrive at this collaboratively early in the selling/buying process. These set the cadence/schedule we and the customer must execute in order to meet their goals and objectives.
We set unrealistic target close dates: Sales people are always optimistic. Or they might be driven by pressure from sales management. So target close dates are set unrealistically close. They don’t align with the customer sense of urgency–but are driven by when we wish we could get the PO. In the process, we find the customer doesn’t have the same sense of urgency. Or we’ve been unrealistic about all the things that need to get done to meet the target close date–both those things we have to do, and those things the customer has to do (keeping in mind, they still have to do their day jobs.).
So we almost never meet those dates, and they slip and slip and slip……..
As things slip in the selling/buying process, we have a day for day, week for week slip in target close date: We and the customer establish a target close date with the best of intentions. We understand the deadlines, and sense of urgency. But over the course of time, things happen. Attention gets diverted, things take longer than we or the customer had planned. We lose a day here or a week there. Traditionally, we let the target close/decision date slip. This is particularly prevalent when the customer has no deadline or sense of urgency about having a solution in place.
So we slip the date, updating CRM. Then more stuff happens, more delays–all with good reason, and the date slips further. We re-adjust the target close date again. Managers, rightfully are getting upset. Is this deal real? Are we going to close it? Why is the slippage happening?
Think about it from the customer point of view. They may miss their deadline. I worked with a client that provided manufacturing equipment to Consumer Package Goods companies. In one situation, the project slipped so long, the customer didn’t have the manufacturing line in place in time, which caused them to miss orders for the Christmas season, which represented 80% of their customers’ expected revenue from that product line! Even absent an event driven deadline, every day or week the decision slips means the deferral or loss of business value.
So as activities slip in the selling/buying process, with the customer, we need to rethink the schedule–working backwards from the fixed target close date, adjusting the schedule so we get buying/selling activities complete in that new schedule. It should be an easy process to explain to the customer–it’s simply good project management discipline. Customers should be used to that from their own internal project management processes.
What Does This Mean? Well the most important thing about keeping the Target Close Date fixed is the customer starts achieving the outcomes they expect from the new solution when they need or expect them. So we create great value by enabling the customer to achieve their planned goals on schedule.
From our point of view, it drives far greater integrity in our pipelines, forecasts, and business results. The rest of the company can more effectively plan their work/activities to meet the deadlines we need for the customer. Inventory can be purchased and manufacturing time scheduled more easily and effectively. If we provide services, the availability of skilled resources is always critical, driving greater schedule integrity in our close dates enables the managers of those teams to plan more effectively. In short, it improves our own company’s ability to plan and execute more effectively and efficiently.
Sure things happen, stuff comes up. There are legitimate reasons to slip the Target Close Date. But we are far more impactful, effective, and efficient when we do this purposefully and thoughtfully. We and the customer should have exhausted all alternatives to keep the original date, achieving the goals and outcomes we’ve established. Only then, does it make sense to slip the date.
Look at your performance over the past year. What percent of your deals come in on time? What percent slip? What are you doing to drive integrity in this process–both for you and your customer?
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