I stopped believing in Santa Claus when I was in 1st grade. One night in December, I was looking around our living room and realized that not only didn’t we have a fireplace – we didn’t even have a chimney!
I asked my Dad how Santa would get into our house since we didn’t have a chimney and he said, “We have one. You just can’t see it because it’s behind that wall in the corner. But don’t worry, Santa can still get in.”
I was not convinced. The next day at school I checked with a higher authority – the 2nd graders. They straightened me out and explained that my parents were Santa Claus.
Although the news was not welcome, it did cause me to shift my present-getting tactics. Beginning with that Christmas, I gave my wish list for Santa directly to my mother and asked her to send it to “him” for me.
Somehow, that seemed like a better approach that sticking a letter in the mail addressed to a made up character living at the North Pole.*
Since I’ve been managing sales for a while now, and my son outgrew Santa about 25 years ago, December has taken on a different meaning for me. It now signifies the end of Q4.
For many companies, Q4 is an extremely important quarter. It’s usually the quarter with the biggest number. If you are behind for the year, it’s your last shot to make the number. If you’re ahead, it’s time to squeeze in every last deal that will help your reps finish the year with big commission checks.
And for some reps and managers, your Q4 performance will determine whether you have a job in January.
Here’s how to teach your reps to have a strong Q4.
First you’ve got to have an accurate picture of where each rep stands. It’s time to clean up the pipeline. If you’ve been using Perfect Forecasting, this will be easy. If not, check out my post on it and then keep reading.
Identify deals that can close this quarter. Review every opportunity with a Q4 close date and ask your rep, “What is the next step needed to move this deal forward to close this quarter?” Follow this up by asking, “What action will you take to make this happen? When will you do this?”
Push or kill any deal without an actionable next step. Be ruthless here. If there is not an actionable next step, then how real is this Opp? At best you can push the Opp’s close date to the next quarter – but only do this if there is a legitimate next step that will occur then. Otherwise, kill the Opp and move on.
Run the numbers. From this point forward, every manager and every rep needs to know his numbers:
- Quota, Booked, and To Go.
- Committed Deals.
- Upside Deals.
- GAP.
Create your plan based on the numbers
Committed deals should have a very clear path to move them to won. The steps to move to won should be well defined with dates and responsibilities spelled out.
Upside deals depend on conditions that you may influence but don’t control such as successful completion of a POC, obtaining signoff from a CFO at the 11th hour, or successfully negotiating legal Ts & Cs.
The GAP is the difference between your Booked + Committed vs. Quota. If you’re having a good quarter, you’ll have no GAP. In that case, focus your efforts on blowing out the number. If there is a GAP, help your rep build a plan to fill it.
Here’s what I’ve learned when closing out Q4.
Most reps are overly optimistic about their pipeline. They’ll say an Opportunity has a 50% chance of closing. Translation: “I have no idea if this deal will close.”
Reps are not always sure what the next step should be. That’s why a pipeline review with you is so critical. I run through a few Opps with the rep . Then I have him cleanup the rest once I’m sure he knows what to do. Sometimes I’ll pair up reps to help each other do a pipeline deep dive. Reveiwing deals with another rep is one of the best ways to eliminate fluff.
Know the Process. Make sure your sales reps know every step of the process required for a customer to place an order. This begins with the customer’s processes for technical approvals, financial approvals and legal approvals then continues to include your internal processes for completing the sale. Too many end of quarter deals slip because of a missing signature, a delayed credit approval, or someone leaving early for the holiday. You can avoid 95% of this by knowing the sales process.
Reps don’t like to move Opps to Closed Lost. Too bad. As managers, it’s our job to guide our reps to focus effort where they’ll get the best return. Q4 is not the time for “hope”, it’s the time to focus 150% on real winnable business.
Fill the GAP by pulling in deals from Q1 to close early. Here’s where you, as the manager, can really help your reps. Look for larger Q1 deals and discuss them with your rep. Some prospects will close early for a small discount. Others will have end of year money to spend. Still others may have planned to order in January but would be willin to buy now if they were asked.
Calling in favors. If your rep is working to close a deal with someone who they’ve built a relationship with, they can ask for a favor. I’ve done this with resellers and customers before. The conversation is simple:
“Is there anything you can do to help me bring in this sales before the end of the year? It would really mean a lot to me.”
or
“Do you have any other orders you could put through before the end of the year? It would really help me out.”
I don’t like to call in personal favors from customers, partners and resellers often, so I reserve this for times when it really would help.
When everything else is done, refocus on building pipeline. At some point, your rep’s list of Committed and Upside deals will become very small and there will be nothing left to do but wait for the POs.
Other reps may not have found enough to cover the GAP. In both cases, it is time to refocus on aggressively building pipeline for Q1. I’ve found that this activity, which is usually neglected at the end of the Q4, provides an unusually high return. For some reason, prospecting during crunch time in Q4 always seems to churn up additional Opps.
Wrapping it Up
Q4 is a time when effective sales management can make or break your year. I’ve listed some practical steps to ensure you have a solid Q4 close.
Once you’ve got your team all moving in the right direction, don’t forget to savor the moment. Leading a sales team that is hitting on all cyclinders and crushing Q4 is a phenomenal experience.
If you want help preparing your team ready for a strong Q4, contact me here. I’d love to hear from you.
*What I got for Christmas that year.
GI Joe with the King Fu Grip.
This was oneof my all time favorite Christmas gifts – even though I knew it didn’t come from Santa.
Giving my wish list directly to Mom clearly paid off!
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