Deal Slippage

Deal slippage is a huge issue for all sellers, but also for buyers. Let’s dive into what drives deal slippage.

Most deal slippage is not really deal slippage. Let me call it “faux slippage.” This slippage has nothing to do with the buyer, their sense of urgency, or when they need to have a solution in place.

Faux slippages is a result of seller error. It occurs for any number of reasons, including:

• The salesperson doesn’t have a deep understanding of why the customer buys and when they need a solution in place. They have some casual conversations, get rough ideas, then use the most optimistic idea for a target date.
• Deals are not well qualified, again the seller doesn’t understand the need to change and when a change needs to be put in place. We’ve talked to the customer, we want to sell them something, and we mistake these conversations for intent to buy and change.
• Pure wishful thinking. The majority of pipelines I see are filled with low quality or bad opportunities. Opportunities outside the ICP, opportunities we hope to close by sheer force of personality and will. These target dates are not only fictitious, but the opportunities should never have gotten into the qualified pipeline in the first place.
• Target close dates are driven by the sellers’ needs, not by what the customer seeks to do. “I need to close this by the end the quarter, I’ll just double down on my efforts.”
• Target close dates are set to placate managers, “When do you need me to bring this in?” Alternatively, “We need to hit our numbers for the quarter, I need you to pull this in!”
• We set target close dates based on our past experience, not based on the customer need. “Our sales cycles are 30-45 days, so lets set the close date for 37 days from now.”
• We really don’t care about the close date, we care about the win. We establish a date, slip it, slip it, slip it, until we somehow get lucky enough to win, or we just forget about it.
• We don’t understand the work that needs to get done by both the customer and us to reach a decision.
• …… and on and on…..

We act as though target close dates are important, but we don’t tend to focus on the importance and the basis for selecting a certain date. One of the things I look at in every deal review is the number of times the target close data has changed. Several years ago, I sat in a review of a critical, very large opportunity. The seller confidently declared he was bringing it in by the end of the quarter, “Trust me!” I asked one question, “Over the last 15 months, the target close date for this deal has changed 11 times, what’s different now. Why should I believe you now?” You can guess the response, you can guess whether it was closed by the end of the quarter.

I’ll stop on the self inflicted wounds we create in creating target close dates. Again, the majority of what I see in deal slippage is sales error.

Target close dates, rather decision dates, are difficult for customers too! A great way to look at it is to look at all the projects a customer has underway, regardless of whether they are buying, or it’s just some sort of project they want to do. Look at the projects you have within your own organization. What percentage of the time do you meet your deadlines? How often do you slip them? Think about the projects that do make their target completion date, what is different about them? I’ll come back to these later.

For complex B2B selling, these change projects are difficult! The customer doesn’t know what to do because they haven’t done it before. They haven’t put together a project plan with realistic milestones and target dates. They tend to be optimistic, underestimating the work that needs to be done.

We can provide a lot of value in helping the customer develop these project plans, setting realistic goals and target completion dates. As much as we may want to pull in the decision/order date, sometimes we serve them and ourselves best by pushing it out, setting more realistic targets based both on the work that needs to be done and the fact they have their day jobs and a lot of other intrusions. But in helping the customer establish a more realistic project plan and date, we both increase our probability of winning and have a more accurate projection of when the project is done.

Let me take a diversion here, focusing on the importance of strong project management. As we develop project plans, we set establish the goal of the project and when the project is expected to be completed. From that point, we work backwards, establishing milestones, and the activities needed to achieve those milestones. Initially, there is some backing and filling, perhaps adjusting the goals and target completion based on better understanding of the work that needs to be done, but the target completion becomes sacred. As the project progresses and delays happen, the target completion is never changed. Great project managers rework the milestones and activities to keep that sacred date.

These principles are great practices in helping the customer establish and manage their change/buying project. And we can provide deep expertise in helping the customer achieve their project goals and target date.

But how do we help the customer establish those dates: When they must have the solution implemented, producing results, when they must make a decision to achieve those goals?

This goes back to a deep understanding of what the customer is trying to achieve, why it is so important for them to achieve it, and what happens if they don’t–or don’t achieve it when they wanted to. Sometimes, outside factors drive the dates. Regulatory changes, laws, critical events drive the entire project schedule and urgency. This external factor keeps everyone focused and locked in on getting the work done.

Sometimes the urgency is driven by a major problem, a crisis that if not met immediately results in adverse consequences to the customer. Care must be taken in working with the customer in establishing this project plan. Too often, the plans and goals may be driven by a sense of panic. We can recognize the urgency and help the customer establish a realistic plan. We can help them build contingencies and buffer. Sometimes they tend to be unrealistic in their expectations, and in our urgency to get a PO we support it. But that’s a sure prediction of failure–at least not meeting the goals when the customer wanted to.

Sometimes, there is nothing compelling that drives the sense of urgency. The customer might recognize the value of the change, they might be fully committed to making the change. But if it slips…… they’ll get back to it, recognizing they are deferring the the results they expected, but it’s OK. Something more important came up, it diverted their attention. Or they just lose interest, they get distracted, or it wasn’t that important in the first place. I suspect a huge number of opportunities fall into this category. The customer is genuinely interested, they want to change. They may even understand the consequences of missing that target “go-live” date. But they are OK with it. Unless we can do something, with the customer and executive team, to solidify their commitment and intent to change, there is a high probability of things slip-sliding away. Everyone is well intended, but shit happens.

How do we deal with this? Can we increase the urgency with executives or the buying team? Can we look at the expected outcomes, getting them to agree they really want to see them achieved by a certain date? Does not getting this done stand in the way of their ability to do something that might be more important? Is it such a hassle factor of the problem so great that we just want to get it to disappear? Whatever we help the customer to arrive at, developing a sense of urgency and target “go-live,” we have to keep that excitement up, we have to keep reselling the reason they need to change, confirming it through their process. We have to recognize and help the customer recognize how easy it is to get diverted or derailed. We have to make the process as easy and painless as possible.

When we look at the customer side of things, one thing becomes clear. The target go-live is driven by them and the nature of the change they want. And it is probably always longer than what we want, but in establishing our target close dates, we have to be driven by the customer commitment, and their target completion dates. No amount of wishful thinking or quarter end discounting will have an impact on that.