Close - but no cigar

The IT industry is going through a blip. Or is it a downturn? Maybe it's a recession? Or is it simply a slowdown?

Whatever its economic fortunes, one thing is clear in the IT industry today: salespeople are under increasing pressure to convert fewer qualified leads into more sales. The pressure to 'close that deal' has never been greater.

In more and more organisations in the UK, IT purse strings are being drawn tighter than ever. And, in many cases, they are being held by much more senior figures, much further up the company ladder than 18 months ago.

A qualified estimate of return on investment (ROI) is now the cornerstone of any successful pitch. And the business benefits of products and services must be crystal clear to IT purchasers before they will buy.

All the while, marketers are continuing to feed as many potential customers as they can into the top of the sales funnel.

Salespeople are studiously following up every lead, however tenuous, that appears in their sales pipeline. But the inescapable fact is that there are fewer deals out there.

Add into the equation the longer sales cycles, as well as the increase in man hours it takes to close a deal, and it's easy to see why it has become a matter of survival to some IT vendors to secure every potential bit of business that comes their way.

Closing the deal. Getting the customer to sign on the dotted line. Bringing home the bacon. This is what sales success has always been about.

But with the step change in the way orders are being won, are different skills required to close a deal in today's tougher technology market?

Feel the pain
Good salespeople know that closing deals starts with showing an understanding of a potential customer's business needs, and the problems their business is trying to overcome.

It is almost always on this solid foundation that skilled sales professionals build towards the close.

Roger Brennan, business development manager for EMEA at outsourced sales lead company TSL, believes, however, that some vendors still focus too much on the technical advantages of their products and services, and not enough on establishing the common ground on which they can do business.

"Do not focus on the technology. Focus on the client's 'pain' points and how you can resolve them," he said.

"Companies do not buy technology, they buy 'pain management'. And technology is just the solution to that pain. IT salespeople who just sell technology usually sell less."

As purchasing power moves away from being the sole domain of the IT department, and buying decisions are increasingly shared with senior, strategically-orientated personnel, the sales pitch must change.

This new breed of customer is potentially alienated by too much technical jargon and detailed specifications.

What they really want is someone who can solve their business problems and explain how technology will do that in plain English. Sellers who can quickly establish this rapport are making the first steps towards closing.

Successful salespeople also agree that a convincing demonstration of the potential ROI of a product or service is another key component to closing a deal in today's tough sales environment.

"Buyers want sellers to cut out the fluff," explained Dudley Larus, vice president of marketing at call centre software company Amcat.

"In difficult economic times, companies are looking for very targeted solutions that will either make them money, or save them money. Solutions that can't really show a clear, viable and fast ROI become incidental."

Is there really a budget?
And yet, as successful vendors know, even with the most skilful pitch and close, if there isn't really a deal to be had in the first place, some leads can be a waste of valuable company resources.

Speculative sales enquiries can be rife in a market where IT budgets are uncertain. Salespeople must confirm from the outset whether the prospect of closing a deal is a real one.

"Ensure that there is a deal to be done and that you're in pole position," advised Gary Lowrey, chief executive at sales and marketing management company InitioStar.

"In the current climate there are many occasions when projects are abandoned due to, for instance, organisational changes, budget cuts or a change in business objectives.

"At all points in the decision process, your team should look for confirmation that there is a real budget for the project and that it is backed by senior management.

"You should confirm support for the project and your proposition at the highest possible level."

To help achieve this, Sarah Sherman, at i2 Technologies, believes that the continual research of a prospect is important and can help keep them close.

"Many salespeople fail to research - and then continue researching - their prospects during a sales cycle," said Sherman.

"Checking up daily on customer company news gives an excuse to call, shows that you are truly interested in their business and can provide more ammunition in closing a deal."

Get buy-in at all levels
Once these basic foundations for successfully closing a deal have been laid, building towards closing becomes more focused on the individuals involved and any internal politics that affect the sales process.

More and more IT salespeople have to be prepared to set out their value proposition with a series of different pitches to different levels in the buyer's organisation, prior to closing the deal.

"Understand the personal agendas of the key buying influencers," recommended Brennan. "They will require different pitches depending on the contacts.

"For instance, a chief financial officer will be interested in the cost and the savings, while the IT manager might be concerned about integration with existing systems."

By covering all of the people involved in the process, and ensuring that they are in favour of your proposition, you start to remove the potential barriers to closing the deal.

"Look out for those within an organisation who have a political influence but who are not necessarily part of the formal decision process," explained Lowrey.

"Ensure that those who are 'for' remain so throughout the decision cycle. Those that are 'neutral' or 'against' [need to be] contacted and convinced to support your proposition."

Most of all, according to Lowrey, successful closers usually start by looking for ways to build relationships throughout the target prospect "right up to board level, using all levels of management within your own company".

Yet it remains crucially important to identify early on in the sales cycle who is ultimately the most relevant decision maker within an organisation.

It is with them that business will be closed. Sellers often have to move their focus away from initial contacts once they have secured buy-in.

At the end of the sales cycle, if the decision maker within the organisation is not engaged in the process, the business cannot be sanctioned. Closure will never happen.

Be a problem solver
Not only must you be talking to the right people but you must be listening to them. Understanding a company's needs is not the same as understanding those of an individual.

"Salespeople fail to close business most often by not listening carefully enough," warned Sherman.

"Not just to the brief, but to the specific concerns of the individual person they are selling into - reading between the lines and understanding the politics of the organisation."

Once they have established solid contacts with the key personnel within the organisation, today's successful closers reiterate their value proposition and iron out any worries that remain about their products or company in the mind of the person with whom they will close.

"You must now minimise the perceived risk associated with choosing your product or solution," continued Sherman.

"The prospect may never have done business with you before, and they may be concerned that your technology will not work, that you will go out of business or that you will not meet their deadline and the project will over-run the budget.

"Pre-empt these perceptions by offering reference clients to your prospect, so that they can speak first-hand to someone who has already purchased your product or solution."

Drive them to a deadline
Most experts agree that the moment of closure is one that occurs naturally in a sales cycle. Yet there can be moments when the process needs a nudge. Giving the potential client a deadline to work towards is an old favourite.

"A top tip for closing a reluctant customer is finding a deadline," said Kevin Magee, sales director at business intelligence software company Information Builders.

"There is nothing like a deadline to focus the mind. If the customer hasn't got a deadline, impose your own."

Don't panic!
Traditionally when an order deadline arrived - real or perceived - even the most experienced salespeople were known to suffer from nerves.

Often, a fear of the deal falling through at the last moment after a long and exhausting sales cycle, would manifest itself in panic discounting.

However, in the current market, margins have been squeezed to the extent where there is often nowhere to go. Here, a good sales manager can make all the difference, according to Brennan.

"At the end of the day, a prospect is looking for the most competitive solution that is most likely to give the best results, with the least perceived risk," he explained.

"So don't give your salespeople authority to negotiate price on their own in a closing situation. Price discounts should be a management decision on a case-by-case basis.

"Get your sales people to focus on the sales value proposition and how the benefits of your product or service outweigh the cost of purchase."

Offering discounts as cheap incentives sends negative messages to customers. Today, every customer wants to demonstrate that they've got a good value deal, but offering them a knee-jerk discount to secure business at the first sign of hesitation can smack of desperation.

It can have an adverse effect and weaken a customer's buy-in to the value proposition.

In the current market, most customers will want to negotiate, but good closers have rigid parameters within which they will operate. A weak negotiation position, i.e. one with open ends, jeopardises the closure of the deal.

"When you have negotiated and have come to your final agreement, be prepared to walk away if it's not accepted and really mean it," advised Chris Stone, chief executive at software supplier Northgate Information Solutions.

"If you really do mean it, it will show in your body language and other non-verbal signs and the client will know that you mean it."

Still asking for it
While we can see how the emphases have shifted dramatically for IT salespeople in the past 18 months, there is still one thing that has remained constant throughout. And it's one mistake even seasoned salespeople still sometimes make.

After setting up the close over a number of weeks - getting buy-in from all quarters, hammering home the value proposition, showing understanding of business processes and needs, negotiating a win/win price - some salespeople simply don't ask for the business.

"Always ensure that you end a negotiation with the client by asking: 'Is there anything else that we need to do?'" suggested Ryan Ward, a UK sales manager at salesforce.com.

"And then respond to their reply with the closing question: 'In that case, please can I have your business?' It's amazing how many people don't actually ask for the business and make it clear what they are asking for."

Three steps to success:
There are three key points to successfully closing a deal, according to Nigel Curtis, a UK sales manager at salesforce.com.

• Get commitment throughout the sales process. If you get to the closing stage but have no commitment, you're unlikely to get the business.
• Make sure that your prospect totally understands your value proposition and what it brings to their organisation.
• Find a champion in the buyer's organisation who has something to gain from the deal: they will more than likely do most of the selling for you.

The six golden rules of closing:

• Be passionate about what you sell
• Understand your customer's pain
• Relationships, relationships, relationships
• Use structured problem solving techniques
• Offer a solution that your organisation can deliver
• Ask for the PO!

Ram Ramchander, general manager of sales at Biomni.

It's just a case of ABC

"ABC (Always Be Closing) is the kind of trite advice that David Brent from TV's The Office might give to one of his junior sales execs.

"It is certainly one of the more overused sayings in sales and one of the more dangerous pieces of advice. If you are always trying to close, then the customer is going to get thoroughly hacked off.

"The true ABC of sales is: always be planning and progressing toward the close. From the outset, you need to be thinking of closing - selling is closing - working toward a deal, a conclusion, an agreement."

Kevin Magee, sales director, Information Builders.

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