Opportunity Qualification for Account Managers: 7 Recommendations
One of the most frustrating things for accounts managers is to see the deals they were heavily relying on closing by the end of the month fall apart at the last moment or get pushed to the next month or quarter. A very common reason for that is the lack of proper opportunity qualification. When insufficient details have been discovered during the initial conversation, the chances are high that certain factors are not going to be taken into account when evaluating whether the deal is going to be closed by the end of the month or at all. I already elaborated on the risks of not qualifying the deals in the previous article and today I would like to focus on what to focus on in order to effectively qualify the deal. So let’s review the 7 recommendations for opportunity qualification based on my team’s experience here at Wrike.
Ask second and third-level questions
Discovery phase is a critical part of opportunity qualification. In order to be able to realistically forecast the opportunity, the salesperson needs to do a great job asking questions which include both general ones and those that enable her to dive deeper into the customer’s use case. Not asking the second and third-level questions creates a risk of misinterpretation of the use case as well as insufficient data to evaluate the opportunity. For example, when we get in touch with clients here at Wrike we can start with general questions such as “Could you please tell me about the teams working in your organization?”. After the client provides information on that, we would ask follow-up questions such as “Could you elaborate on the size of those teams as well as how they collaborate on a daily basis? Also I would be curious to learn what solutions those teams use today if any to manage work”. With the details discovered during such conversation, it could easily be the case that the wall-to-wall rollout of the solution that the rep was planning initially would be a way more complex exercise, because, e.g. 2 out of 5 teams are using competitor’s solutions, 1 team is not sure whether it wants any solution in the first place, etc. but while it may be frustrating to learn those details, getting clarity into the current situation is always better than operating blindsighted. Yes, the close date of the opportunity may move from the middle of this month to the end of the quarter. But as long as all the legwork has been performed, the probability of closing this deal could be increased dramatically.
Confirm what the decision-making process looks like
Each organization has its own decision-making process. It could be as simple as the owner the rep talking to saying “Yes, send me the paperwork” and as complex as going through the 10 stages of the procurement process with approvals required from finance, accounting, HR, legal, and other departments. That said, even if the rep managed to sell the value of the solution to the key stakeholders, there’s no guarantee that the deal is going to be closed overnight. It’s imperative that the salesperson asks the client what the decision-making process looks like. Questions here may include:
The main risk of not understanding the decision-making process is not that the deal is not going to be closed, but that it could be closed significantly later than the salesperson would be expecting. So if she relies on this deal to hit the monthly quota, ignoring the process may cause major disappointment.
Listen carefully and make notes
While this recommendation may seem pretty obvious, many opportunities tend to fall apart because salespeople do not listen carefully to responses the clients provide to their questions and do not confirm the things that are not clear. For example, the client might mention “If we have the budget for that we might grow the team by 10 team members in the next 3–6 months”. If the rep wasn’t paying attention, he may make a note that a 10-user expansion is guaranteed within the next 12 weeks, create an opportunity in CRM and forecast it. But at the end of the day, the client might not get the budget and any account growth would be put on hold for the time being. Reps need to pay attention to everything the clients are sharing with them, and if something is not clear it would always be a good idea to pause and confirm what the client meant. All the information discovered needs to be thoroughly documented in CRM, so that when the salesperson returns to this opportunity in 3 months, it would be possible to review what has been discussed, what the client shared and what’s the plan moving forward.
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Confirm whether other solutions are being evaluated
In the last 5 years, we witnessed a trend of growing competition within SaaS solutions. Not too long ago it felt like the pie was so big, everyone could take a slice without the need to fight for it. Now the situation has changed dramatically. Even when it comes to small and mid-sized deals multiple solutions are often being evaluated including both existing vendors and alternative ones. That said when account managers discuss with clients somewhat noticeable upgrades they should always keep in mind the possibility of the competitor’s solution being in play. If previously the options were likely to be “to upgrade”, and “not to upgrade”, now there’s a third one — “migrate to the competitor’s solution”. So whenever the growth opportunity is being discussed, it’s critical that account managers ask the clients whether the competitors’ solutions are being evaluated. If the answer is yes, it would not hurt to once again review the client’s requirements for the deal and prepare a clear list of arguments on why your product would be a better fit compared to competitors’.
Be prepared for unexpected factors with large deals
What is certain about large deals is that they require a bigger commitment from the customers — both from the perspective of the budget and making changes to business processes. That said, when account managers discover large opportunities it’s critical that they do even more thorough investigation than usual. While in many ways the process of closing such deals would be similar to smaller ones, they may require additional stakeholders on the client’s side to approve them, longer timelines, and, as an example a mandatory review of multiple vendors even when your company’s product would be a preferred solution. So I strongly recommend lowering the expectations to close such deals quickly and being prepared for multiple rounds of negotiations, demos, Q&A sessions, and legal reviews. If a regular deal cycle in the company is around 1 month, a larger deal may take a whole quarter to close which should be taken into account when forecasting such a deal.
Always qualify the inbound opportunities
Every now and then account managers receive inbound requests from customers to upgrade. This is especially common in the SMB segment where AMs are working with relatively large books of business. Account managers — especially those who are relatively new in the role — may get excited about the opportunity to close the deal quickly and immediately send the paperwork needed to get the deal signed. However, unless it’s the last day of the month and the deal needs to be closed quickly to be counted toward this month’s quota, I recommend reaching out to the customer and doing discovery to better understand their requirements. Here at Wrike, we’ve had hundreds of cases when the client reached out for a small upgrade, but after asking several clarification questions it became apparent that there’s potential for a much larger upgrade and the delta MRR of the deal could be increased dramatically. Obviously, there would be scenarios where customers know exactly what they need, but not qualifying all incoming deals creates the risk of missing out on larger opportunities that would’ve otherwise been successfully closed.
Value surpassed the budget but there are exceptions
Value selling is a critical part of the account manager’s job. The ability to connect the solutions the product provides with the challenges the clients are facing is the key to closing the deals. And the initial response from the customers like “We don’t have the budget for that” in many cases just a part of the sales process. If the account manager is capable of showing how, e.g. the product can save $3,000 per month for the company, would it make sense to increase the spending on the product by $300 per month? In many situations this question is rhetorical. There are exceptions, however. Clients may indeed not have any budget available at the moment. So it would be the account manager’s job to find a creative solution. It could be a switch from annual to quarterly billing, agreeing on a 30-day delay in payment after the invoice is received or something way more complex like the buyout program that is becoming more and more common among SaaS solution providers who are trying to close deals with clients already locked in contracts with their competitors. So putting the value first should be the rule of thumb kind of scenario for account managers, but they should always have some options prepared should the budget be an issue.
The better the account managers become in qualifying opportunities, the more accurate would be their forecast and the higher percentage of the deals would more likely be closed. This is a skill that should not be taken lightly and that has a dramatic effect on AM’s results and career progression.