Closing the Book on Closing
Let’s pull out all the stops on this.
Aggressive, constant closing is just about the worst thing most salespeople can do. Closing kills more sales than it gets, and ruins future sales by squelching relationships. If you still have those old “50 Closing Strategies” books gathering dust, get rid of them. If you still believe in ABC—Always Be Closing—I want to convince you once and for all to stop it.
And sales managers, please read on: because at every quarter’s end, when you exhort the troops to bring the numbers in, all you’re doing is telling them to close. And you are constructing a circular firing squad when you do it.
I’ve had a few things to say about this in the past, not just about closing but about the paradox of selling, and about why so much in sales these days works to defeat trust, hence defeat sales. As Yogi Berra said, you could look it up.
Don’t Take My Word that Closing is Bad: Take Konrath and Rackham’s
Jill Konrath is a highly-respected author, sales consultant, and blogger. She’s even less ambiguous than I am: “I will never, ever train people on closing techniques if they sell to the corporate marketplace.”
In Neil Rackham’s perennial best-seller SPIN Selling , he describes results of research on closing for both low-priced and high-priced goods.
• For low-priced goods, training sellers in closing techniques resulted in slightly shorter sale times, and a slightly increased rate of sale (76% vs. 72%). Meaning—a slight improvement by increasing closing techniques.
• For higher-priced goods, training sellers in closing techniques also resulted in shorter sales transaction times—but it also resulted in less sales—33% vs. 42% before being trained in closing.
In other words: closing may increase efficiency and slightly improve your results if you’re selling copy paper, and low cost add-on products (“you want fries with that” is actually a good use of closing: take note, McD’s countermen).
But if you’re selling any kind of professional services, or most anything over a few hundred dollars–the better you get at closing, the less you sell! Oh well, at least you get shot down faster!
Rackham’s data was from a few decades ago. Do you think closing techniques have gotten more effective, or less effective, in today’s times? Yup, that’s right.
The Real Culprits: Sales Management and the Training Industry
Salespersons have their own battles to fight. But their job is made immeasurably harder by those who design the sales environments.
Ask yourself, which business strategy works better: one that is executed consistently over a long time period, or one that is given a new endpoint every few months? It’s the same with relationships—business or personal.
In personal relationships, we talk about people who are commitment-phobic, or about players—those looking only for one-night stands. In effect, those are what the quarterly insistence on cleaning up the numbers makes your salespeople.
Following is a quote from a sales training newsletter I received a week ago:
Charles, with only three days to go until the end of the month (and end of the first quarter), it is time to push hard to exceed budgets.
This month we focused on planning and preparation, but it is now tome [sic] for all your hard work to pay off. As it is time to close, we have put up a small selection of articles on our homepage to help you.
Members can log in and search for thousands more articles and resources, including over 40 more articles all on sales closing.
Presumably somebody buys this stuff. But let’s be clear about what it is: the intellectual version of crack. It urges you to give up on long-term plans and relationships, and subordinate them to the siren call of the “here-now.” Worse, it is entirely self-centered—urging the seller to bend the client, and particularly the client’s wallet, to the will of the seller.
Here’s how Neil Rackham puts it: “When salespeople are under pressure to produce short-term results and are being told to get the business this month by whatever means necessary, they pressure customers and this creates suspicion and mistrust.”
Exactly. So if you’re a sales manager in a business that isn’t small-dollar and ancillary, and if you’re pushing your people to step up the closing at quarter’s end, then you are creating suspicion and mistrust. Which ruins sales in the medium and long term.
Who cuts off their nose to spite their face that way? Besides crack addicts, I mean?
Never mind. Just stop closing. In its place, substitute constant striving to improve results and relationships for your clients. If that feels too vague, then use Jill Konrath’s suggestion: focus on the Next Logical Step.
You’ll sell more. And sleep better too.
if closing comes out when a salesperson is desperate, the issue is how to avoid getting that desperate:
That takes filling your pipeline with more people wanting what you have than you can ever get to, which allows you to look at each deal as an opportunity to serve, not close.
While I’ll generally agree that aggressive and even non-aggressive closing techniques generally defeat long term sales and relationship building that isn’t always the case particularly in a corporate environment. There are at least two other factors to consider, 1) the people in those environments generally know that sales people are under quarter end deadlines so to some degree expect it (and also use it as a way to get better deals for their business btw) and 2) it’s largely the stock-market driven "measure by quarter" mentality that has given rise or at best strongly encouraged this behavior.
Don’t get me wrong, I’m NOT a [traditional] sales-person nor will I ever be. I’ve preferred and only utilized relationship building for the sales process in my own business and never had to cut a quarter end deal just to "get it done" but before we start ripping the process to shreds it’s fair to look a little deeper at the root cause. The people that build sales environments that strive for booking revenue before the end of the quarter are largely shareholders, we just don’t think of if that way because it’s a downstream effect.
Might also be good to actually have some more recent research rather than just conjecture about whether or not it’s gotten worse since the 10yr old data you use.
All of your points are well taken and I do agree whole-heartedly that relationship based sales are the way things are going but in large corporate cultures it takes time to turn things around.
Thanks all who commented and tweeted.
Warren, we probably agree far more than we disagree, but I’d suggest the test of whether you’re willing to serve rather than close comes when your pipeline is closer to empty than full. Though, to your point, if your pipeline is close to empty, you may need to look into some product development.
Scott, I hear you, we’re on the same page too, but I still feel squirmy when people cite the stock market quarterly pressure as the explanation that drives all this economically foolish behavior. Salespeople blame it, sales managers blame it, CEOs blame it: meanwhile, everybody admits that short-term focus kills relationships, sales and revenue. And profits! So the implication seems to be either that Wall Street is really ignorant, or that everyone else is seeing boogeymen where they don’t exist.
Honestly: if short-term behavior hurts economic value, and if the stock market prices stocks on the basis of economic value, then just how is that the stock market supposedly pressures people to behave in the short term? Something in that logic link is horribly wrong. Either the market is incorrectly pricing value (somewhat possible, I grant you), or managers are mis-perceiving the market’s mandates (also possible, I think). I tried to explore this subject a little further in a previous blog, The Open Letter Main Street CEOs should Write to Wall Street
Re more recent research, certainly more recent data is always desirable, but as Neil Rackham says, nobody has ever again attempted the size and scale of research that he undertook, and most likely never will again; so while we’re stuck with data that’s old, it may also be the best there ever was.
Aggressive closing sales tactics often fail big time—and have repercussions beyond lost sales.
In a recent post comparing Big Pharma with Enron, a blogger points the finger at Pharma’s sales-driven culture. He feels the industry’s wrong-doing “stems from the sales force, not consumer marketing. Pharma companies love their sales forces and when new drugs are launched it is the sales force that has to ‘meet their numbers’ regardless of how high they are.”
http://www.worldofdtcmarketing.com/files/8d310811bb1f08a958ab9e5e0f6980fb-1036.html
Charlie,
Thanks for the reply. My only additional comment is that there is a lot of irrationality in the stock market. Granted, I haven’t scientifically tested it but I don’t think rabid speculation devoid of fundamentals based valuations would be hard to document. If anything it seems to be getting worse. Might make an interesting little study actually.
The long and short of my point was that I think there is a larger machine at work driving the process than simply detestable closing techniques.
Also, apologies for typing and grammatical errors in my first reply, sometimes my fingers work faster than my brain and I hit submit before proofreading.