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Emanuel R. Carpenter

I believe the first step is to analyze everything. You could hire an outside consultant or do some of the things consultants do such as:

1. Interview prospects that did not buy from you and find out why.

2. Interview customers that purchased from you and ask them what made them buy.

3. Determine what a truly qualified lead is.

4. Do some quality control on cold calling efforts in the form of recording calls or giving reps #s that go to people who will critique the call (like a secret shopper). This will make sure leads are truly qualified instead of just a waste of time for sales reps.

5. Have sales managers or consultants go on visits with sales reps to determine deficiencies.

6. Consider alternate ways to get leads such as associations, referrals from happy customers, or creating a website specifically for lead generation.

7. Be willing to make adjustments to every process, which could include the need to fire underperforming salespeople and sales managers.

8. Reward sales reps for bringing in new business and make it a part of their performance review.

Once these things are done, the true reason for underperformance should be revealed.

Brett Keirstead

To all who posted comments: thank you very much for providing insights and suggestions they were extremely helpful! I took the concepts and ideas from this blog along with numerous other sources (including Gerard himself) and instituted as series of steps to help resolve our challenge. Step 1 was to document with rigor our opportunity qualification criteria. It was clear we were considering too many 'suspects' to be opportunities. The second thing we did was document in great detail our expectations for milestones and verifiable outcomes in the sales process. It was obvious we were making our own judgment as to our position in the buying cycle as opposed to relying on confirmation from the client. The third thing was to modify our Salesforce.com solution to provide for more detailed tracking and analysis of the stages in the sales process. It helps to have a centralized repository and tracking mechanism to keep everyone consistently on track. Fourth, we doubled down on our efforts to get access to Power (or Economic Buyer in Miller Heiman terms). It was evident when we did an account by account review that we were not at a high enough level in an organization to understand the true status of the client's evaluation cycle. Fifth, we built several new tools for the sales people to help in the discovery and requirements gathering process. We created several online survey tools to share with prospects in advance of key meetings and created a traditional Sequence of Events letter to gain mutual collaboration of the buying process. Sixth, we ramped up our marketing and prospecting efforts. We did a quick analysis of all the contacts, lead and attendees from the media events web participate in and sponsor and realized we were generally seeing the same people attend. We started a concerted effort to make additional contacts (industry and within our prospects) beyond the same titles we had been marketing to prior. We also expanded our sales message and efforts within the social media channels (LinkedIn, Facebook, Twitter). Lastly, we greatly tightened our discount policy and eliminated our 'early adopter' program. Too quickly we were jumping to price concessions in order to win new accounts. This 'land grab' was a very big success and built the initial group of core customers that allowed us to establish our brand and market presence (and become profitable and stable as a business). However, given our success, the pending upturn in the market, the advent of our busy season, and the desire to increase our ASP, the timing is right for a change in our policy.

The net result (although very early) is that we have greatly reduced the number of opportunities we are truly considering qualified. We have begun to isolate the Economic Buyer and are improving our access to higher levels within the organization. We are also setting more realistic expectations with all our constituents (internal and external) as to our overall quality and depth of our funnel. We are spending less time with unqualified leads and more going deeper with truly active prospects. The recent new wins we have had came with more detailed information, better expectations and a much higher ASP. We have already created several new 'enterprise level' opportunities that we are managing through a more rigorous process for a Q4 close.

Our company is a fast growing, successful, 2009 Inc 500 honoree that is transitioning from 'start up' to 'maturing high growth'. The recession and seasonal slow down for our industry was a perfect time to re-orient our sales organization and set ourselves up for the next round of growth. We are heading into our seasonal busy season with a great deal of confidence and I want to thank all the people who contributed ideas on here for their help. Good luck to everyone for a great finish to 2009!

Brett Keirstead
Vice President, Sales
Jobs2Web (www.jobs2web.com)
2009 Inc 500 Honoree

Claudia Kuzma

Hello Gerhard,
Interestingly I've had a few thoughts on this recently. I'm looking at it from a Macro view in terms of solving the problem.
1. Management needs to do their homework to
ensure that they are setting quota at what the market is bearing (this will directly coorelate to funnel health)
2. There are technologies that map to CRM packages like saleforce.com which enable sales to focus on those opportunities that have a higher propensity to close (one that is top of mind is http://www.bluetidemanagement.com/)
3. A good sales person will be seeking to create value for their prospects and this entails the use of new tools as you recently outlined in Sales 2.0 alongside mapping the solution to their needs (without a need there is no sale)
4. Focusing on customer buying behaviors which will move the sale to closure with direct communication and understanding of the buyers process for acquiring the solution (many times we focus on our sales process and not on the customer buying process and this causes disruption to the end goal of closing the sale)

Many thanks for all the good content and sales dialogue! All my best---Claudia


I believe that we are experiencing a major shift in the length of the selling cycle which will not significantly improved until CEO confidence improves. The good news, from Vistage, is three quarters of improved confidence. We are headed in the right direction! But a long way from where we were. So, the key is to be there with your solution when confidence motivates deferred buying decisions. Sales people should be vigilant!

Patrick Bubna

Have you experienced a similar situation in your career?
Yes, a lot of our clients are having this experience right now (we are a sales training team in Austria).

If you have, what did you do about it? How did you recover?
After having made sure that their customers problems cannot be immediately solved through increased sales efforts -e.g. their market has broken up like car or steel industry - we suggested they should use the time with creative relationship building. This means: talk with your customer at every level. Check out new ways of common product development, new communication channels, new marketing approaches etc.
Not surprisingly, sooner or later they would go and do something with a new mindset. The results vary a lot, but the quality of the relationship has grown.

How would you go about diagnosing this problem?
Ask questions:
Step one: what are the symptoms of the problem?
Step two: What are the possible causes of the problem?
Step three: what are the possible solutions of the problem?
Step four: Make a decision and act on it!
Step five: Check your results and modify the course if necessary

Which segments of the sales pipeline would you look at more closely?
We believe that that the key to success lies in the very early parts: Targeting and collecting information.

How would you get the closing ratio back to previous levels?
Closing is a logical outcome of all the things done or not done before

Joanne Black

Many of my clients have had this experience. It is true that clients are cutting budgets and canceling projects.

I suggest the following steps to remedy the decline in close ratio:
1. Analyze "qualified" opportunities. Where did the leads originate, and who qualified them? Pipelines are often "smoke and mirrors."
2. Determine the number of qualified opportunities that were referred. Typically, when salespeople receive a qualified referral, (The prospect wants to talk to them, and the salesperson wants to talk to the prospect) they convert a sales prospect to a paying client over 50 percent of the time.
3. Accelerate your referral process and get only real qualified leads in your sales funnel.
4. Ensure salespeople are asking enough questions and are getting honest answers.

Ultimately, it's never about closing. It's always about steps that were overlooked earlier in the sales process.


Have you experienced a similar situation in your career? Yes

If you have, what did you do about it? How did you recover? Focused on 2 things; increasing qualified lead generation (does not affect RATIO however) and selling/re-upping more contracts with existing customers to stabilize revenue goals.

How would you go about diagnosing this problem? Ask the customer/sales team LOTS of questions and brainstorm regularly on what is working/not working. If you manage a team you may even want to institute a group incentive to motivate helping each other.

Which segments of the sales pipeline would you look at more closely? This would be obvious once you have diagnosed where the issues lie.

How would you get the closing ratio back to previous levels? First, I would not panic and react too quickly. The most recent quarter has been tough for everyone. The best bet might be to offset the revenue shortfall by increasing lead gen. I also would NOT put more emphasis on CRM/reporting/bureaucracy; that is usually the first response by management but you get paralysis by analysis.

gerhard gschwandtner

Thank you Chad, Steve and Peter for sharing your insightful comments. The Sales VP and I had a long conversation about his challenges and he would like to send his sincere thanks to all of you.
Have a great week-end.

Peter Malamas

Hi Gerhard: yes I think we have all experienced this type of challenge in closure rates at some point in our sales career if we have been at it long enough! Since this is a technology company I can relate pretty well to this question....

A close rate decrease of this magnitude is a very serious issue, since your sales team is going to need to be working about twice as hard to just maintain the same sales revenue levels. So in addition to the very good advice above, I would also suggest some essential conversations with your Marketing and Product Development folks to bring them into this process.

In my view consistent communications between all these disciplines is paramount to your success. As a Sales management pro, breaking down some of the interdisciplinary “communication silos” that may exist in some companies between these departments and people is one of your most important challenges.

Marketing: has there been a change in our marketing messaging or marketing channels we are using that has affected the inbound lead flow quantity, quality, or demographics? Are we getting fewer leads or less qualified leads in comparison to when the close rates were higher? Do we need to optimize our messaging to address a change in our prospect's needs? or do we need to “change channels” and focus more on emarketing such as viral, social networks, or email campaigns to attract a different demographic and engage our prospect in a dialog vs. traditional channels? What is being said about us in blogs and social communities? Are we doing the best possible job of communicating the unique competitive differentiators that we can articulate to our prospects in a compelling way?

Product Development: What product benefits are key to our current customers? What is the marketplace demanding and what are the latest features being added in competitive offerings? What is the Help Desk and Customer service rep hearing from our existing customers, are there any trends developing that point to a new product need? Are we missing anything? Are there unique competitive benefits that are provided by our product?

If you're not articulating and actually providing unique competitive benefits, you’re selling a perceived commodity. You will need to cut prices to win deals, resulting in profit margins and closure rates that will suffer drastically!

Steve Early

Helpful pipeline diagnosis strategies may include the following as part of an account review:

Fit - Why is what we are selling a good fit for this potential customer?
Urgency - Tell me what is driving the customer to do something now - why will they move forward?
People Map - Tell me the names of all key players involved in the decision. Tell me whether they are supportive, neutral, against, or don't know. Tell me who your inside coaches are and the role(s) they play.
Decision Process - Articulate the company's decision process for me.
Mindshare - To what degree has the company embraced our key messages? To what degree are competitor messages sticking in their heads? Are there messages we are trying to deliver (differentiators) that they "don't get" or aren't sticking with them?

While any of these areas can be causing you to fail, you will probably find that Urgency is a problem area. Reps won't be able to articulate urgency. So the question becomes; how can you create or fuel urgency? Help the rep work on strategies to do that (beyond "buy today and I'll cut the price"!)

You may also find that their People Map is very thin. They're dealing with one person, or two people. Economy is forcing decision making higher up into organizations. It is more complex and companies have higher expectations for ROI. Reps need to be dealing with multiple people that will influence the decision and can act as coaches to help them succeed.

Start reviewing any key opportunity that is 30-90 days away from closing now.

Chad Burmeister

Have you experienced a similar situation in your career? 50% lower close ratio... Seeing that now yes

If you have, what did you do about it? How did you recover? Double down on lead gen

How would you go about diagnosing this problem? Ask questions

Which segments of the sales pipeline would you look at more closely? Funnel

How would you get the closing ratio back to previous levels - more opps!

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