Deal Qualification will determine the Winners & Losers in 2021/22

Deal qualification is the single most critical skill for sellers and sales leaders to master in 2021/22. Studies show that in good economic conditions 60-70% of technology projects don’t happen. We are about to enter the most difficult trading conditions that our generation has ever experienced. It is likely that 80% or maybe even 90% of deals will fail to mature or materialize over the next 2 years.

No-one truly knows what is going to happen. No-one knows how it will play out. No-one knows if the economic Armageddon will happen. But most people do believe that someone somewhere is going to have to pay for all of the Covid-19 stimulus packages at some point and that’s going to hurt a lot!

But what has this got to do with deal qualification models I hear you ask? Not much. Except that it means that competition is going to get much much tougher. Every investment dollar will be more precious and contested far more aggressively. Net new deals with be fewer and further in between. You won’t just be competing with people in your immediate area or sector anymore, you’ll be competing with every provider who’s looking to get their hands on the prospect's available cash. And that is why deal qualification will become critical… It is the providers who become the masters of knowing when to hold them, when to fold them, when to walk away and when to run (Thanks Kenny!) who will be the most successful...

People are people and they do have a tendency to behave in predictably unpredictable ways. High consideration B2B buying and selling is not an altruistic paradise. Far from it. We must never forget or under-estimate the personal motivations that drive people. Self-preservation and self-interest are incredibly powerful.

Your prospects aren’t going to deliberately deceive you. Well not all of them will mislead you on purpose anyhow. But many of them will deceive you, nevertheless.

Some will honestly believe that their project is going to happen. What they fail to grasp is that in an economic downturn all budgetary bets are off. Cash that has previously been ring-fenced will be reclaimed by the business and reallocated to areas with greater need. They are misinformed and delusional but at least their motives are pure.

Some buyers will deliberately mislead you for fear of looking impotent, powerless and irrelevant. These folks will nod and smile and keep taking meetings long after the writing is on the wall. Their delicate egos and inflated sense of self-importance will make it hard for them to call an end to the madness. They will know that the project is a non-starter, but they will carry on regardless. Such is their aversion to losing face and the embarrassment of having to admit that perhaps they don’t have quite as much power, influence and authority that they had previously suggested.

Some will be using you to demonstrate to their management chain that they are actively engaged and seeking new and innovative ways to weather the economic storm and drive the business forward. They will cite their activities with you as proof of their level of engagement and enthusiasm for change. They will burn inordinate amounts of your time in the process. They will require workshops and demos and proofs of concept. They will be actively engaged in the active evaluation of you and your offering. But is it real? Or is it just a smoke screen of “busy” work that they are using to bolster their internal reputation and demonstrate why they need to be kept on or promoted?

There will be some buyers who are overtly and blatantly using you as a commercially focused stick with which to beat your rivals down on price. They have already selected their preferred option and are using you to keep their chosen provider focused and keen. If you’re just “making up the numbers” then you’re never going to make your number!

People lie. Sometimes without realising it. Sometimes because they want to avoid having to express a difficult truth. And sometimes they lie because it is in their own best interest. Whatever the motivation, sellers must actively seek to identify these untruths continuously if they are to avoid wasting their efforts on zombie deals (dead deals walking) and be successful. Every seller has a finite capacity. As does every sales team. Clogging up your pipeline with zombie deals is a sure-fire way of wasting your valuable sales capacity and generating self-delusional forecasts. Zombies will suck the life out of your sales pipeline if you let them.

Sellers must look beyond the traditional deal qualification models of the past. BANT was created in the 1950s and hasn’t been credible or relevant for decades. Despite that, it remains one of the most commonly used approaches in the field.

Basing your sales process on arbitrary characteristics that are unverifiable or subjective isn’t helpful. Just because they tell you that they have a budget it doesn’t mean that they do!

Failing to constantly re-evaluate each and every deal to see if it’s worth investing any more of your valuable time and resources in them isn’t helpful either. Just because a prospect and a deal passes a set of less-than-helpful check points at the start of the sales cycle, it doesn’t mean that you should keep working it regardless.

“Working deals to conclusion” after some form of one-off notional qualification review is a recipe for waste, inefficiency and morale sapping disappointment. And yet that is exactly what many sales teams do day in and day out. The evaluation criteria you use to determine whether it’s worth engaging with a prospect are not the same criteria you should be using to decide if you should continue working on it.

Non-buying signals are much easier to spot than buying signals. Qualification should be based on observable behaviours and traits rather than solely on subjective questioning that misleads and misinforms. Just because you ask them a question it doesn’t mean that they will answer and even if they do it doesn’t mean you can trust what they tell you.

Sellers should use pre-engagement qualification criteria such as the SCOPE model defined below:

Embarking on a sales journey doesn't mean that you have to stick with it until the bitter end. And yet far too many sellers or their managers seem overly reluctant to call a halt to the madness even when the writing is clearly on the wall and it is patently obvious to everyone involved that you're not going to win it. When I talk to leaders about their win/loss analysis reviews it's quite common for them to tell me that it was "pretty obvious 6 months ago that we weren't going to win it". My response is always the same... So why on earth did you carry on working it? The answers I get are scarily familiar, the sales leader goes all misty-eyed and starts quoting Huey Lewis and the News lyrics from the 1980s at me. They talk about turning a "bad" one "good", and making a "wrong" one "right"... This is ludicrous. The return on effort just isn't there. They forget that the opportunity cost of turning a failing deal around is the 9-19 deals they could have worked if they had been qualifying their pipeline properly.

In addition to SCOPE’ing a deal before they start working it, sellers should also qualify the deals they are working regularly using in-process qualification criteria such as the DICE model defined below:

Next generation deal qualification is much more than an alternative set of evaluation criteria. Or at least it should be. It is a vitally important sub-process within the broader sales process. It should be part of the fabric of the sales organization. Sellers must be made to understand that it’s in their own best interest to do it. Sales enablement should explain why it’s needed and how to do it. Sales leadership should bring governance to the process and ensure that sellers in the field are actually doing it for real. Management reporting should show the results of the collective activity. If you’re not proactively flushing 5-15% of your pipeline a quarter then you’re probably not qualifying it properly. And if you’re not qualifying it properly, how on earth can you trust your forecast?

Those of you that have access to talk to me in my day job can find the formal report on deal qualification “How Tech CEOs Can Use Continuous Deal Qualification to Drive Sales Effectiveness and Productivity” at https://www.gartner.com/document/3996657. There you will find the full details of the pre-engagement (SCOPE) and in-process (DICE) evaluation criteria along with a set of 20+ questions that your sales enablement function can use to educate and motivate your sellers in the field. You will also find a 5-step implementation plan that describes how you can make this utopian state a reality. 

SCOPE every deal out before you invest any time in it. Roll the DICE every day to see that it justifies your continued attention and effort. If you’re not “feeling it” and it doesn’t make sense to stay in the game, then cut your losses and move on to something that you can win.

Go forth and qualify hard! Qualify harder and more frequently than you’ve ever qualified before! Qualify as if your life depended on it! Because, guess what? It probably does…

Rob

About me… By day, I am a mild-mannered research analyst helping senior executives in the technology industry to achieve greatness. Or at least, I try to help them to become better and move beyond the current state-of-the-union. By night (and by day to come to think of it), I am the proud father of 3 amazing individuals who desperately tries not to live his life vicariously through his offspring (and sometimes fails).