Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.
By Gerry Langeler
The quote above comes from a Sales VP for whom I have great respect. And it rings true in every definition of a “deal.”
- If you are a Sales VP selling your company’s product or service, and the sales process with a specific customer seems to drag on and on for reasons you cannot ascertain, you’re in big trouble.
- If you are the CEO pitching your company’s stock to VCs or angels and can’t seem to get the investors to make a decision, you’re in big trouble.
- If you are an Engineering VP and are attempting to get your CEO to spring for a new set of development tools, and that CEO seems to be taking forever to get back to you, you’re in big trouble.
The harsh reality is that all sales processes have a cadence. If you have properly qualified your target, and then stay within that cadence, there is a reasonable chance you’ll get to “yes.” But if not, you are almost certainly going to, someday, get to “no.”
We see this all the time in our portfolio companies. One firm was told almost exactly a year ago they were going to get an order with two commas in it (read over $1M) on July 24, 2010. As that day approached, they were told that a reorganization had occurred at the customer and the order would have to wait until the new boss arrived and blessed it in September.
When he arrived, that new boss had many other higher priorities on his plate, and so finally in December was ready to review the proposal. But the team that had championed the proposal had not taken to the new boss, and had moved on to other firms. So, the new boss said he’d get their replacements in place, and let them re-propose if they wanted to.
The replacements were hired in early 2011, and after a few months of getting their feet on the ground decided to proceed. They went as far as a detailed work plan and deliverables set – including not just the first order, but a follow-on planned for 2012. But still no order appeared.
Then it was revealed that the new team was going to go to the rank and file employees who would have to work with the new product to be sure to get their buy-in. That meeting happened, but no feedback was received for weeks. Finally, now almost a year after the initial near win, an email arrived saying the potential customer had decided to “go in a different direction.”
It should not be a surprise. Any good sales leader can tell you that the scariest thing to hit a sales cycle is a management change. Here, we had at least two. But more important, any deal that goes from “you’ll have the order in date x” to silence is a deal that has a very low probability of closing – whatever the reason for the silence.
So, what do you do about it? First, you need multiple communication channels into the decision maker(s). This doesn’t matter if they are internal or external to your organization. Our firm in the example above had too much reliance on one or two “champions” – who, when they went silent, or went away entirely, left our company blind to what was going on at the customer.
Second, you need to be very realistic on the probability of success when the sales cycle suddenly takes a detour, when you suddenly feel like it has broken cadence. Take that potential “deal” and assign it a much lower probability immediately. Refocus your efforts on other deals that are still marching to the drummer you want to hear. Don’t let “hope” replace “likelihood.”
So – what about raising money for your company? As venture capitalists, we sincerely try to get you a crisp answer in a reasonable time. But we, too, fall victim to the law of priorities of the moment and sometimes the law of the crow (oh, a shiny new object!). If you have pitched us, and we break cadence and go dark on you, it’s a bad sign. You should feel free to call us on it and ask for clarification. But if you don’t get a rapid response, assume the worst and move on. We actually tend to get to “yes” fairly fast, with lots of building to yes signals along the way. If you aren’t getting those signals, assume time is killing your deal.