In my third year at HubSpot doing business development and sales, I noticed my success rate with deals going up -- though I hadn't changed my tactics very much. Many of the companies I tried to do business with in the preceding two years that went nowhere were now reaching back out to me to do business.
While it's true that I kept in touch with a few of these past opportunities, I certainly wasn't expecting this kind of success from "closed-lost opportunities" as they are often called.
So what exactly was going on?
I've blogged previously that, for me, jobs have a pattern -- I do well in the first year, but only because expectations are relatively low and I'm being lauded more for hard work than results. Then, the second year is a struggle, and I make a big mistake or two. But, if my boss has the fortitude to mentor me through these mistakes, I tend to outperform in the third year onwards.
I used to think this was simply a function of experience, but -- in sales, at least -- there is another explanation.
Right Product, Right Time
I realize now that one of the biggest reasons for not closing deals in sales is simply timing -- often, the customer just isn't in the right place for accepting or appreciating your product. Perhaps funding is an issue, or maybe the political alignment needed at the customer's company to utilize your product is not present. Indeed, this is why even great salespeople have win rates far less than 50%.
However, people tend to have long memories and, provided you had a good interaction with your prospective customer, they won't forget you and may eventually come back to you when the time is right. As it turns out, this is what's been happening to me with so many old opportunities.
That's why having an honest, thought-provoking discussion is always a good strategy for salespeople. You're essentially sowing the seeds for future sales if one doesn't materialize now. You're also growing your network of referrals, because closed-lost opps are still likely to refer someone to you if that person is a better fit. People inherently want to help, and simply asking for referrals can often spur that engine.
Now, as a salesperson, the timing of prospects showing a readiness to buy is hard to foot, with quotas that start when you begin your job and when you don't have the benefit of closed-lost opps. Hopefully, you're coming into a job with your own referral network to bolster your chances. But certainly, as time goes by, you'll have the benefit of closed-lost opps and be able to reach your quotas more easily.
When to Reach Out to Prospects
Okay, now for something a little more practical rather than just waiting for opps to come back to you like Godot: How does one gauge the right time to reach out to a prospect?
Certainly, external events like funding, the rise or decline of your business (depending on what your product does), new product launches, and partnership or hiring announcements could be catalysts for engaging with a prospect.
Features such as our Social Inbox and Google Alerts can you help you keep abreast of these developments. Other tools, like HubSpot Sales, can also tell you if prospects are opening your emails -- something that's really valuable when multiple people at a prospect's company are suddenly engaging with your content. Also, LinkedIn can tell you about various changes in your network.
Indeed, using such resources to research your prospect, their company, and their industry is the best way to engage them in that thought-provoking discussion I mentioned earlier.
Overall, there's never been a better time to be a salesperson.
Arjun Moorthy is the VP of Business Development and Partner Programs at HubSpot.