Closing deals by the end of the quarter
Best practices to get deals done on time, IE, before quarter or year end.
We’re coming down to the wire- it’s December 15th, 2021. The calendar year for most sales teams will either end on December 31, 2021, or (increasingly) January 31, 2022. It’s beyond time to implement a close plan on your key deals if you haven’t already- ideally, you’d start thinking about this a month or so before end of quarter, maybe a month and a half before end of year.
What is a close plan?
Think of a close plan as an insurance policy- it’s intentional work you’re doing to socialize the close of your deal with your stakeholder (ie, prospect, champion, or decisionmakers.)
Early in my sales career, I found myself hoping deals would close on time, figuring that the prospect knows I want to close this thing up as soon as possible. I didn’t know if it was professional to share my desire for a certain close date, or how to express this sentiment at all without coming across as too “salesy.”
In hindsight, that was a huge mistake. Buyers aren’t aware of your goals, your calendar, etc. They have no reason to sign on the dotted line by end of month vs. the first week of the next month unless you proactively give them a reason, or at least, explain that timeline important to you.
So the major point is, every prospect you’re working with, and hoping to close by the end of the month or calendar year, should be aware of your timing goals, and ideally, you should make them aware as early as possible.
Sharing close date goals early and often
The earlier you can share a close date with a prospect, AND get their buy in that this close date is realistic, the better the chance you have of hitting that close date.
Waiting too long is extremely risky because it isn’t realistic for your prospect to magically change their buying timeline late in the game. If your calendar year ends January 31 of next year, you should start socializing your desired close date ASAP, AND start to get a sense for how realistic that close date is, and who needs to be involved in that signature happening on time.
Try to do discovery around the close
It’s common knowledge that discovery happens on your first call with a prospect, but in reality, you should be doing discovery throughout the entire sales cycle.
Asking probing questions “around the close” is its own form of discovery. This narrative, or discovery questions, can sound like:
“My goal is to execute this deal before X date- do you think that’s realistic?”
“If not realistic… when do you think would be realistic?”
“If realistic… who else needs to be involved?”
“If Christmas and New Years are approaching… when do you plan to go offline for the year?”
“Who is going to be the final signatory if not you? Who else needs to be involved in the final approval? When do THEY go offline for the year? Are they aware of our desired close date? Do you have a sense for what they need to see in order to feel comfortable signing?”
“Do you have budgetary, security, legal and financial approval? Do we need to get working on any of those things now to make sure we’re ready to close by our desired close date?”
If your VP grills you about any deal you need to hit your number, you should be able to answer any of these questions above. If you can’t, you simply don’t know enough about your deal, and there is a floating risk of the deal pushing that you’re not addressing proactively enough.
Being realistic about incentives
Charlie Munger of Berkshire Hathaway fame famously said: “show me the incentive, and I’ll show you the outcome.”
Buyers have no real incentive to close your deal on time unless you provide them with an incentive. You can offer a time bound discount (which is a common tactic) - ie, a pricing proposal with X% discount conditional upon signature by Y close date, but that’s not the only trade you can make to try to guarantee hitting your close date.
You can throw in free training/deployment resources, a year 1 only discount, a delayed start date, etc. - there are a bunch of things you can offer that the prospect might value in exchange for hitting your desired close date.
The key is to float this trade as early as possible, when the prospect can still influence what happens. Then, it’s easier to hold the prospect accountable if the date slips.
Without an incentive, or awareness around why you care about the close date, your prospects have no clue that the close date even matters at all. A buyer’s brain will only focus on their own goals, and buying a piece of software December 24th vs. Jan 5th makes no difference to them unless (a) there’s something in it for them, and/or (b) you explain as early as possible that close date happens to be very important to you.
The buyers you work with probably do want to help you out if they can, but they’re not mindreaders, and they likely need to be coached and managed through the buying process, especially around timeline.
Bake in a buffer
If you start sharing desired close dates and getting prospect buy in early enough, you can and should bake in a week or two of buffer time- ie, Jan 20th is a better close date to tie a discount to than Jan 30th. People are natural procrastinators, so try to be realistic that there is going to be a scramble amongst every other vendor near the end of a month or quarter, and you don’t want to be caught in a massive list of vendors trying to get deals done.
Finally, if your fiscal year ends in December (Christmas planning) do NOT set Dec 29, 30 or 31 as your desired close date. The last work day before Christmas eve should be your absolute latest target close date (Thurs, Dec 23 this year) and you should make sure that no one involved in the closing process will be offline on or before the day you’re looking to close.
Handling adversity and unforeseen barriers
Inevitably, something is going to go haywire in deals you’re working at the last minute. This is why (a) buffer time is super important, and (b) buy in from your champion that the target close date is, in fact, realistic is super important.
If both of those elements are accounted for, you’ll have a much higher degree of willingness from your champion to help you problem solve when things start to go wrong.
Often times, late in deals, I find myself using the phrase “I’m growing concerned that…” If you’ve built a strong relationship with your champion, they will help address your concerns. If you’re concerned about something, and the person you’re working with has no idea how to problem solve with you, it’s a clue that you should that you start to ask which person within their org they need to loop in, and make sure you’re “multithreading” with more than just your champion.
Summary
You don’t necessarily need a big fancy mutual close fan document - the most efficient way to close on time is to socialize your desired close date early and often, try to float a trade in exchange for hitting that desired close date, and do separate discovery around how the close is going to happen, specifically and step by step.
Good luck, and happy closing everyone!
Thanks for reading EarlyGTM post #10!
Mike Marg, Principal, Craft Ventures
(for more thoughts on go to market, and occasional sports-related frustration - @mikemarg_ on Twitter)