Great salespeople are optimists and realists, at the same time. They have to be.
New leads are gonna close, you say. Qualified opportunities? Gonna close too.
You’re looking for a way to help your prospects, and most of them need you! You’re in the business of “problem finding”, identifying the needs and pain points and unmet objectives with your prospects that you (and your product or service) can help rectify and achieve. Your optimism, passion for finding & solving customer problems, and belief in what you’re doing drives your optimism and pushes you forward.
Of course, not every lead and opportunity is going to close. Part of the reason why salespeople need to be such strong optimists is because their failure rate is so high. The best salespeople in the world hear “no” the majority of the time.
That’s where the realism comes in. When we at Heinz build demand generation & sales models from scratch (where no historical data exists), based on what we’ve seen at countless B2B companies, we expect 5 percent of leads to become opportunities, and 25 percent of opportunities to close.
Think about that for a minute. These numbers aren’t made up. They’re based on recent historical data across multiple comparable companies, and they imply that just 1.25% of your leads will become a closed deal.
They also imply that only one in four of the short-term opportunities you’ve already qualified will close.
One of the biggest problems with most sales pipelines is overly-aggressive and math. An assumption that more deals will close than is feasible or realistic. If your pipeline is so small than you need 40-50 percent (or more) of your opportunities to close, you’re working against reality.
There’s a reason we call it a sales funnel and not a sales cylinder. The walls close in, steeply, as you get towards the closed deal. Most prospects and opportunities don’t make it. (Deals that don’t make it to the finish line aren’t dead, most are then ready for nurturing, but that’s a topic for another blog post).
Look at the pipeline of deals you expect to close this month or quarter. HHow many do you need to close? If your math more resembles a cylinder vs. a funnel, you may have a problem.