How do you look at deal health?
Most businesses we work with have long forecast calls looking at when deals will close… They make calls based on rep confidence with perhaps a hedge or gut feeling.
Deal health shouldn’t be subjective, it should measure the evidence.
Healthy deals are where the buyer’s own words and actions support all the important variables of the opportunity. Not just a rep’s optimism or the CRM stage it is at. It has to be about the buyer’s behaviour.
Why do deals slip so much?
Happy ears and desperate ears. Rep’s hear “this looks great” and move it on a step or put it into commit.
Or they’re under pressure to get the deal done - perhaps they are under pressure and behind their targets, perhaps management is also behind and the forecast calls are becoming pressure cookers.
Either way, the calls are made based on weak information and this goes up into a forecast. The number is based on hope and then come the due date, they slip, over and over.
Of course you can put this down to poor deal cadence from the rep, but it is more than that. Forecast calls are almost always about when a deal will close, or how it can be closed. You likely have lots of talent but are you really using this to execute as well as you can.
What should you be scoring?
There are many great ways and methodologies to measure a deals health, also ways in which those can be used to drive leadership into said deals.
Let’s look at MEDDPICC for this article and frame it with a buyer’s behaviour lens as an a single example to test against (although there should be many more).
Identified Pain - Has the buyer described the cost of doing nothing in their own words?
Metrics - Is the value quantified, how, and did the buyer produce the numbers?
Economic Buyer - Have you met them, or only heard about them - what skin have they put in the deal?
Champion - What has your champion done for you that carried personal risk?
Decision Criteria - Did they share this, or did you assume how it will be measured?
Decision and Paper Process - Do you know every step to buy, does your buyer know every step and has shared this?
Competition - Who else is in the deal, including the do nothing option - what have you actually heard?
We also like to cover one more:
Compelling Event - What happens to them if this slips a quarter?
How do you score a deal based on Evidence?
Score each factor from 1 to 5 on EVIDENCE.
1 is assumed
2 is heard second-hand
3 is stated by the buyer
4 is confirmed in writing
5 is proven by a buyer action
Let’s say your buyer books you time with their CFO - this is a 5. Whereas the Champion who said “leave it with me” - can only be a 3.
Why use a spider graph?
As a leader you’re looking at lots of deals. Spider graphs give you instant visuals on a deal. With today’s use of AI, you can drive a score beyond what the rep says. Take two scores and you will have your forecast hedge - start to build your forecast on the measure you feel comfortable with.
Sure your ‘active’ pipeline may take a short term hit, but your teams will learn to spend time where it matters and you will get two outcomes - More wins and less slips…
Go find three deals and work the numbers, build the spider and then decide which number you should be forecasting!
Kaizen-One is a commercial transformation consultancy for B2B SaaS and technology companies. We diagnose before we prescribe, using evidence to show leadership teams where their commercial engine is really underperforming and what to do about it. If your forecast feels more like hope than evidence, let's talk. kaizen-one.co.uk
The scores shown are illustrative and do not represent client data.
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