Why won't this deal close?

Your high-value deals are at risk, and chances are you don't know why.

Pipeline management continues to measure net new revenue as a function of volume and change over time (conversions), but not risk. This model also assumes that buyers have complete information, and sellers do not. It's a mass production model, and it's breaking at the seams.

You don't need complicated algorithms and analysis to assess sales opportunity risk.

Top sellers manage risk all the time, which is why they hit quota with 2x coverage. Few document what they do, or can explain how they do it. Top sellers manage risk based on their experience, just like top athletes and performers with years of experience.

Recently I posted an unscientific poll in the SalesStack community. It's a simple What-If scenario that many have experienced at the end of the quarter.

It's Q4 and 3 deals have stalled, you're in contact with 2 of them, and one has gone dark after expressing a lot of interest...

What do you do ?

A/ Discount to "sweeten" and close.

B/ Charge hard and get the ink you need.

C/ Assess the risk factors and prioritize based on your best chance of winning.

D/ Call in your C-Levels to talk to their C-Levels to get past the roadblocks.

Thanks to the community we got a few great responses:

Ryan O'Hara, VP of Marketing and Growth at LeadIQ, responded "I’m leaning toward D … definitely not feeling A."

Cory Bray, Managing Director at ClozeLoop, answered "C is my answer. Specifically, I'd look at how strong I conducted discovery and I'd also measure rapport. Based on my observations, I'd then take the appropriate action...which might be one of many things."

Both responses indicate that experience and risk assessment play a critical role in closing high-value, high-risk deals, and that discounting is not the preferred option.

A selling process like BANT, ANUM, or MEDDIC is designed to limit risk by proactively qualifying prospects, but does not provide for ongoing disqualification as new variables and contingencies arise. Not acknowledging new variables can lead to "happy ears" and unpleasant surprises, such as closing calls that don't close and missed forecasts.

As Tom Williams, CEO at DealPoint points out, opportunity qualification is not a binary decision. Deals can be more or less qualified, and that changes over time. Risk factors that go beyond BANT, ANUM, or MEDDIC help to further clarify potential closed/won deals.

Deal risk assessment sounds complicated, but it's not. It's just just hard to get started because managing risk is what banks and heath insurance companies do, not sales managers. To begin, compile a list of risk factors particular to your opportunity, and group them by 5 common themes. (Note list is by no means complete, nor does it address weighted analysis.)

1. Competition: Who else is potentially in the deal? Even if they haven't been mentioned?
2. Culture: Is the organization ready, willing, and able to embrace change? If not, why not?
3. People: How many critical decision makers have you contacted inside the account?
4. Process: How significant are the problem(s), and how much process needs to change?
5. Tools: Will you disrupt or displace existing workflows and tooling in their tech stack?

If you go into a high-value deal review with a simple risk assessment framework, you can better calculate a confidence interval to measure your chance of success. That's it!

Deal risk assessments give you a significant advantage in several ways. First, you can stress test your own assumptions - especially optimism and sunk cost bias. By measuring what you know vs. what you don't know, you give yourself a fighting chance to win the deal.

Unknown risk factors are the biggest threat. These factors involve internal account politics, preferred vendor relationships, poor process management, procurement, and much more.

One of my favorite questions to ask before submitting a proposal is simply "Why won't this deal close?" Asking this question allows an internal champion to share the risks they are managing. Sellers have an opportunity to then make a strategic decision.

With an internal champion inside the prospect account, and an established a relationship built on trust, the answers to that question can be a veritable gold mine.

I can choose to address the prospect's concerns to shore up my proposal. However I may also determine that the prospect is not prepared to move forward at this time, and therefore disqualify them to focus on other deals with a higher probability of closing in the near term.

Simple risk assessment frameworks will help you prioritize high-value, high-risk deals to maximize limited sales resources as well as contradict some of the assumptions that inevitably find their way into sales conversations. A more complex, weighted analysis can lead to better confidence intervals and better forecasting.

In today's crowded markets, the risk of "no-decision" is both significant and complex, but not insurmountable. Risk assessment may be unorthodox, but it is not difficult to do, and can result in more effective pipeline coverage, more accurate revenue forecasts, and happier customers too. Use process and measure data to manage risk and streamline your pipeline.

About the Author: Chris Ortolano is the founder and principal at Outbound Edge, a sales consultancy, and creator of SalesStack, a Slack team for B2B Sales and Marketing pros.

Chris helps sales managers focus on using data and process to win more deals and solve problems associated with pipeline activity, analytics, and effectiveness.

Contact [email protected] to learn more about how sales process and tooling can convert your pipeline into a sales flywheel. Request a no-obligation 28-point Deal Risk Assessment for sales managers and reps to reduce risk and eliminate unpleasant surprises.