A Simple Formula for More Effectively Qualifying Opportunities
I hate to use the analogy, but it’s like playing poker. If you don’t have a good hand, fold early. The worst thing you can do is stay in for a long time and then be the last loser. That’s a good analogy for qualifications. You got to figure out early on, good deal or not. If It’s not, nothing wrong in folding early. But, not so good, if you fold late.
How do you apply the sales formula to qualify a sale?
The formula is Pain x Power x Vision x Value x Collaboration x Compelling Reason to Act. Those six variables are so critical to a sale, whether it’s a very complex deal or a very short sales cycle. That’s what I like about the formula. This crazy world of selling has got so many variables to it. To be able to look at a deal through those variables is a very important way to communicate with other people in the deal.
It’s also a very good qualification mechanism. If at any point, one of those six variables is not strong or not in place, I ought to be looking at those continually. I need to look to see: “Is the deal moving in a direction where it needs to go? Are we uncovering the right information we need to feel good about this deal?”
Do all six conditions of the formula have to be met before qualifying?
They’re not all going to be met at the beginning of a sales cycle, but there are things that ought to be developed over time. My experience shows that if you have pain, power, vision, value, and even a compelling reason to act, which sometimes is encompassed by the other ones, a deal’s going to happen.
It’s going to happen. But, is it going to happen with me or with my competitor? That’s where the idea of collaboration usually comes into place. The one that collaborates the best, helps mitigate risk, and moves someone through their decision making process in a collaborative style is going to win the business.
How can sales managers use the formula for their team?
It’s almost like a mathematical equation. One could argue that zero for any of those variables means no deal. As a sales manager, I would use that as my continual basis for quick debriefs. I’m going to ask:
- Do you know what the pain is for this deal?
- Are we at power? Are we at the decision maker?
- Do they have a vision of how our capabilities can help solve their problem? Is it differentiated? Does it favor us?
- Have we established quantifiable value?
- Is there a compelling reason to act?
- Is there a time frame by when they need to make a decision?
- Are we collaborating with the customer? Are we working with them to move them through their buying cycle?
The formula provides sales managers with very pointed questions to ask to assess the quality of the deal.
Follow the sales process and track the checklist
Most professions have processes in place. Architects follow a process. Chefs follows recipes. We certainly help flight crews follow onboarding checklists. Everybody has checklists, formulas, and guidelines. Too often is sales considered an art rather than a science. And so, there’s not always those recipes and checklists. I think a successful sales formula serves as that recipe or checklist for sellers to quickly ascertain if it’s qualified, if it’s moving forward, and if it’s a good deal.
Why is PPVVCC better than BANT?
I think BANT (Budget, Authority, Need, Time frame) are very important things to know in a sales cycle. What’s ironic about that is if as a seller, early on, can share BANT with me, then they’re pretty far down the road. As a matter of fact, I might be late to the game. That might be a very qualified deal for someone else. By just looking at BANT as your sole qualification criteria, you actually could be engaging in a deal that is very unqualified for you. Again, important elements to know during the sales cycle, but not your sole qualification criteria.