Is this scenario familiar? One of your Advisors comes to you seeking advice on how to close the wonderful prospect that has been in his pipeline for 4 months (and one that you have been asking about for the last three months). He has made 4 or 5 calls on the client, has identified the client’s problem, articulated the solution, but just can’t seem to close! So, management and the client team put their heads together to come up with a closing tactic that will create some urgency on the part of the client and motivate him or her to sign the documents, fund the account, and move ahead … only to return to the same discussions about the same client a month later. Over time, the prospect becomes a stale item in the pipeline and eventually falls off, forgotten as an opportunity that was just not going to happen and unworthy of spending more time, frustrated that the prospect just “does not get it.”
The conclusion? We need to improve on our closing skills! But is that the right conclusion? Often, not. Instead, it is what Sales Benchmark Index, a friend of ours in the sales consulting industry, has measured as “the number one contributor to longer sales cycles” – stage reversion.
For a more detailed look at the opportunity to drive more growth with enhanced pipeline velocity, download the Speed, Efficiency, and the Fallacy of “Relationship Selling” whitepaper by David Greene below.
Download the Speed, Efficiency, and the Fallacy of “Relationship Selling” whitepaper.
What Is Stage Reversion?
Stage reversion means that while the Advisor believes she is in one stage of the sales process, in reality, the client remains in another, earlier stage. For example, you believe you are ready to close because you have identified the need and have a solution for that need. But for whatever reason, you have overlooked the fact that the client has not recognized the need. Or, it might be that you moved out of the second call, but failed to verify the decision-making process, and therefore have been trying to close without an important decision-maker or influencer in the room!
So often as we strive to come up with the best closing tactic, we neglect the fact that at least one key step in the early stages of the sales process has been missed and we, therefore, have not yet even earned the right to ask for the business.
Stage Reversion? How Do I Know?
It is fundamentally critical that your sales organization has and uses a consistent sales process aligned to your client buying process and further has the capability to measure the various metrics within that process. There are two primary ways to assess whether you are encountering a problem with stage reversion:
- Calls-to-Close – What is the best-in-class target for calls-to-close in your client segment? If you are in the HNW segment, that target should be no higher than 3. If you are serving the Mass Affluent, 1.5 to 2. While one additional call at times may be warranted, consistently exceeding that target suggests there is room for improvement and that you are missing something in at least one stage of the sales process – either key steps in the process have been overlooked or your prospect simply is and never was a prospect.
- Defined Sales Process Exit Criteria – Does each stage of your sales process have defined requirements that must be met before moving on to the next? With such criteria, sales managers can easily understand through effective questioning exactly where each prospect is in the pipeline to ensure your Advisor has earned the right to move on to the next stage of the process.
The Causes of Stage Reversion?
The most common causes of stage reversion are:
- Lack of a consistent sales methodology to which the entire team (Advisors, Sales Managers, and Executive Management) is committed. Without this and a common nomenclature, you simply cannot claim that you have a sales culture, and you likely have significant room to further maximize your sales capacity.
- Due to the urgency to close business and generate production, Managers and Advisors spend too much time on the late stages of the cycle, primarily focusing on closing skills.
- Advisors lack practical, application-based sales performance training, are ineffective, and/or simply overlook the critical components of the earlier stages of the sales cycle … and find that they can’t move ahead or have to go back, taking up valuable time in the quest to meet their goals.
- Management does not have the time and/or skill to (1) understand what is breaking down in the sales process; and (2) effectively coach to resolve the deficiency.
- If you do not already have one, ensure that you have a clearly laid out “stage-gated” sales process (aligned with your clients’ buying process) with exit criteria for each stage, to which you can track and to which the entire team is committed.
- Assuming that has been solved, spend more time and focus – training, coaching, and practicing – on developing skills in the early stages of the sales process, which will lead to more effective and efficient closing.
- Ensure your sales leaders are truly bringing value to their Advisors, giving each the time and coaching needed to recognize areas for improvement and thereby develop into top-level Advisors. And if they aren’t, give them the training and coaching they need. THEIR effectiveness is key to moving (and sustaining) the revenue dial!
- Improved close ratios
- 25% or more increase in sales revenue production
- More prospects moving through the pipeline (increasing production that much more!)
- Top-of-class status in the industry