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HELP: When to close lost an opportunity

Problem:

This specific case is related to a seasonal business, which is agriculture. Our problem is how to handle opportunities where interest/ability to implement exists but put on hold due to seasonal factors. For example, Agriculture is working around the clock during planting or harvest windows. All other matters unrelated to operations are put on hold. These windows are anywhere from 30-60 days.


We want to make sure we have accurate information on opportunity age, days to close, average age per stage, etc.. and make sure opportunities do not slip through the cracks.


Question:

When and how should we decide if an opportunity should be closed lost and reopened OR put the opportunity on hold in a way that is reportable. Currently, this is not defined.


Solution Idea (help here):

Systems: SF, Outreach, Atrium, Gong


We have, what I believe to be a strong sales process. Each opp stage (preparation, alignment, evaluation, proposal, commit, Closed W/Closed L) is defined with activities and exit criteria.


To prevent this from being abused "Hold Reason" needs to be buttoned up.


For an opportunity to be on hold, it needs to be an advanced opportunity, which is anything post-"Aligment" in our sales process (exit criteria: interest/ability to implement/urgency exists, pricing has been floated and in bounds, prospect can articulate how they would use our product/service to help solve their problem). We find a way to exclude this hold in the metrics (or maybe not because it's the reality of our market).


We can roll up the account status (active or hold) to the opportunity to show accounts that are on hold or active. An account should not be on hold for more than 60 days and must continue to show activity during this hold period with gifts "no action" activity to prospect.


Goal:

better forecasting, better reporting, better management, less missed follow-ups


--- Thoughts???




πŸ‘‘ Sales Strategy
☁️ Software Tech
🧒 Sales Management
2
mistamor
Contributor
+4
VP of Sales
Meaty question.

When should decide when an opp should be closed-lost? You need to define what each stage means.

Currently, in my company, I've defined "Lost" as any deal/opportunity that explicitly told me they went with another vendor or they are not interested in us for XYZ reasons.Β 

Otherwise, if they have not responded (ghosted) then I move them into another stage called, "Stuck."Β 

If they told me that they are holding off on this project until next quarter or next year or whatever it is, we move them into a stage called "Deferred."

My team uses HubSpot so each stage has a designated % associated. E.g. Lost = 0% chance to close, deferred or stuck = 2-10% chance to close.Β 

If you're keeping a deal open when it should be lost then your forecasting and deal win rate is inaccurate.

Another thing to mention is that you should define the lifecycle for each deal. Let me explain..

Avg days to close for a deal = 30 days

Every new deal/Opportunity has a 90-day lifecycle. Meaning, we have a maximum of 90 days to close a deal before we decide what stage they go into.

So if in the 90th day that deal is still not won, BUT:

1. They still show interest = move the deal close date 3 months out in the same deal stage it was in (e.g. Demo complete)
2. They said they are holding off for now = move deal into Deferred stage.
3. They haven't responded to at least 2-3 attempts in the 3rd month (of their 90 day lifecycle), move the deal into Stuck.
4. Went with another provider/no longer interested = Lost stage

So I created a framework for how to handle/manage deals.Β 

Hope this answers your question or helps.Β 
r_GoLions
Fire Starter
+1
Sr Sales Executive
Meaty question indeed! Thanks for the quick reply.Β 

I think deferred and stuck provide better visibility into the true reason for it being pushed out or on hold.Β 

A few questions though:

How do you prevent an opp from staying a loop of deferred or stuck. If a deal gets deferred and then is unresponsive, they then move to stuck? What is the exit criteria for stuck?Β 

Are these opps included when calculating "avg days to close"?

This helps. Thank you
mistamor
Contributor
+4
VP of Sales
Q: How do you prevent an opp from staying a loop of deferred or stuck. If a deal gets deferred and then is unresponsive, they then move to stuck? What is the exit criteria for stuck?Β 

A: You'd need to define this internally. In my sales process, here are some definitions that get the deals unstuck:

1) Prospect reaches back out and shows interest

2) You reached out to prospect after X time and they responded showing interest


** I think the 'Deferred stage' is more opportunistic than the stuck stage, which is why, MOST of the time, all deals in Deferred have a follow-up task assigned to it for X months out.Β 


** I just hired 2 new AEs. They will have deals that are in the 'Stuck' and 'Deferred' stage assigned to them to see if they can bring them back -- it's great for practice too.Β 

Are these opps included when calculating "avg days to close"? That's a great question - I'd have to double check how Hubspot calculates it internally. Hubspot has formulas that calculate this. I imagine your CRM may do the same. Does it only count avg days to close from the time it was created and then won ? >> Logically, it sounds like that would be the answer.Β 
AlecBaldwinsHairline
Valued Contributor
+5
SDR Manager
Cut your sales cycle in half (IE 60 days, then 30) if there is not going to be any clearly defined next step or deliverable from your prospect between now and that time frame, drop it like a bad habit.

Bother the hell out of them for thirty days with relevant content, attempts to set next steps, etc.

IF nothing, on that 30th day you thank them, breakup, close their file, and leave it open with - I'll reach out next quarter to see if this makes more sense then.

Half the time they come back.
mistamor
Contributor
+4
VP of Sales
what's the point of a break up email if the plan is to reach back out again?

r_GoLions
Fire Starter
+1
Sr Sales Executive
For the hope to inform a move to your recommended lead statuses of "deferred", "stuck" or "C/L"Β @mistamor? Do you not use break-up emails?

Here is one I use often that works really well. (credit to Richard Harris)


Subject Line: β€œProfessional courtesy of a reply is requested” or β€œStatus update please”


Hi {Name},

I understand things may have changed internally at your organization because that is how business goes sometimes.

To avoid either of us wasting time on something that is no longer a priority could you please let me know if I should stop contacting you or when is a better time for me to connect with you?

Sincerely,Β 
{Sender}
Show 3 more replies
Coffeesforclosers
Notable Contributor
+11
Director Sales and Market Development
Depends on sales cycle and data to back it up. Also how many were closed at 60 days then reopened withing 60 and closed in 60, then your sales cycle is 180 days and should bump the hold to 90 not 60
r_GoLions
Fire Starter
+1
Sr Sales Executive
Good question, I don't know the answer to that.Β 

How are you coming up with 90? Is that because if data showed this pattern of closed and reopened, you would suggest stretching the on hold window to 90?
Coffeesforclosers
Notable Contributor
+11
Director Sales and Market Development
Exactly, it was on the brink of converting and couldve fallen through the cracks if killed at 60.Β 
JdgDredd
Good Citizen
AVP - Sales
Heavy Question:

60 days is not a long period for an opp to be closed and reopened. Also when you are admitting this is the nature of your business. Closing opps and reopening them will mess up your sales opps count and your closed lost analysis.Β 

Β Most Opps stay open for longer based on how the sales discussion is going. If you use the HOLD stage then it's very easy to report off those opps pipeline and also show Mgmt that you have pipeline that has been delayed 60 days.Β 


r_GoLions
Fire Starter
+1
Sr Sales Executive
I agree. Even if the hold window is longer but the prospect continues to show interest (assuming he/she has budget and authority). It should stay open with a status to reflect where it’s at.Β 

Thanks for chiming in.
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