October 1st marks the start of the biggest quarter for most companies. At my first company called Open Environment – a middleware software company – we would do 85 percent of our business on the last week and 50 percent of our business on exactly the last day. We had our ten fax machines constantly going, dealing with all the orders (yeah, it was a while ago, before the time of awesome sales assistants, like Spiro).
As we approach Q4, what do we need to be thinking about? And how do you know whether you’re on track to meet your goals? Three simple numbers, my friend:
- Average deal size
- Win rate
- Opportunities created per week
Take a look at your win rate and the average size of your deal. Multiple all those together to figure out how much you should sell and where you are. For example, if you have 10 deals at $40,000 each, and win half of them, you’ll sell $200,000. If you know those numbers at the beginning of Q4 you should be able to roughly project what you’re going to sell. If they don’t match up to where you need to be, you’re fucked. (Want help winning more deals? Salespeople win 11% more deals per month when using Spiro.)
Once you hit Q4, there’s really no changing course. Most companies are not going to be interested in new proposals at Q4 because they’ve been gearing up all year long to meet long-term goals.
So, is there anything you can do for damage control?
Going back to the three numbers model: 10 deals at a 50 percent win rate with a $40k average sale will bring in $200k. If you need to change those variables, it’s unlikely you’ll change your win rate. You might get lucky, but you’ll only win so many deals and probably won’t radically expand it in Q4 because of the nature of the buying cycle at that point. What you CAN possibly change is the size of the deal.
Talk to ten customers and ask how they might consider increasing their buys from $40k to $400k. If you could figure out a way to get just one to $400k it would change the whole equation. Suddenly you get $760k worth of of pipeline. The way to convince them is to take a good look at how your product aligns with the company’s goals so you create the most value. If you can’t do that you need to find another fucking job.
Prevention, is, as the say, the best medicine. Avoid getting yourself in a bad situation in Q4 by paying attention to the three magic metrics (deal size, win rate, and opportunities created per week) and make sure they’re working in your favor.
Photo courtesy of Wikimedia