I talked about “bad data” in the pipeline the other day. You can see the post here. Today I’m going to talk about the lack of close dates or inaccurate close dates. Technically speaking you could say the lack of close dates or inaccurate close dates IS bad data and you’d be right. That being said, the lack of close dates or inaccurate close dates in the CRM is far more destructive than the other types of bad data and therefore I felt it deserved it’s own break down.
An accurate close is at the heart of a strong pipeline. Knowing when a deal is going to close is critical to managing commit and to forecasting. The close date is at the center of understanding when revenue or bookings will come through the door. Not knowing this makes it very difficult to manage the business.
There are two reasons close dates aren’t accurate;
- lack of sales rep discipline
- sales reps feelings.
Lack of sales rep discipline, although just as damaging to the pipeline , is a much easier issue to fix. When close dates are days or even months in the past, you know you have a CRM and pipeline discipline and management problem. Your sales people and sales managers are not being disciplined in managing the pipeline. They just aren’t changing the dates in the system.
It’s inevitable, deals will slip, thereby rendering the original close date wrong. When deals slip, when original close dates are no longer accurate, it’s the obligation of the sales team to change them in the CRM and “push them out” to a future date. There is no excuse for old close dates. If a strong pipeline review process is part of your cadence, then close dates should be dynamically shifting on a regular basis. It’s sales managements job to ensure close dates are accurate and up to date in the system and to the extent they aren’t, they get evaluated and pushed out.
The other reason close dates are inaccurate is because they rely on a sales person’s feelings. Sales people are notorious for putting their finger in the air and “guessing” on when they think a deal will close. This guess work is always heavily dependent on how a sales rep feels. If they’ve had a good conversation with a prospect, the deal will be given a closer close date. If the prospect tells them the deal is theirs but she just needs to get the CEO’s approval, the rep sees it as a done deal, even though they’ve never talked to the CEO and have no idea about her decision criteria. When close dates are left to the “feelings” of sales people, close dates are wrong.
To fix this problem, sales leaders need to demand evidence of close and build in mandatory steps that must be accomplished in order to close a deal. Just as when a lack of discipline is present, it is sales managements job to remove the reliance on feelings when it comes to the pipeline. During the pipeline review cadence, heavy emphasis should be put on evidence of close. In other words, push the sales team to provide evidence on why the deal will close when stated. Ask thorough questions digging deep into the sales process looking for evidence the deal close is accurate.
When the sales rep says it’s a done deal and they are just waiting on CEO approval, ask if the CEO has seen the proposal already. Ask the rep if they know what the CEO’s decision criteria are and HOW they know that. Ask why the CEO has to approve and if they knew CEO approval was required earlier in the sales process. If they didn’t know, expect the close date to be inaccurate. If they did know, ask what proactive steps they took ensure they would get CEO approval.
Accurate close dates are heavily dependent on the strength and sophistication of BOTH the sales rep and the sales manager ability to perform a strong pipeline review. Remove the “feeling” from close dates. Sales reps feelings are almost always wrong. We are an optimistic bunch. It’s why we are in sales. Unfortunately, feelings don’t do much for us but create bad close dates and crappy pipelines. Replace “feelings” with evidence and dig deep into the deal. It’s the only way to keep em honest.
Close dates are critical to deal movement and a healthy pipeline. Create a culture of discipline and don’t allow feelings to come into play. Demand evidence from your sales people. It will force them to dig deeper and remove their reliance on gut. Who needs gut, when you have proof.
Don’t miss the other posts in my Pipeline Movement Series:
Pipeline Movement Part 1 – [Sales Management Tips]
Pipeline Movement Part 2 – [Bad Data]
Pipeline Movement Part 4 – [Increase Sales with a Good Sales Process]