Trying to make your numbers and meet your company’s quota system? Perhaps you are selling programs with annual renewal cycles, including the option for upsell on a quarterly basis. You probably are barraging your customers with “time to renew” or your prospects with “time to buy before we increase prices” types of messaging.
The problem is, you are selling to many folks whose own selling cycles can run anywhere from 18 months to 36 months. Oops. Your quota system is not aligned with your customers’ sales cycles.
Your customers may not be on the receiving end of your 12-month contracted service program until Month Fourteen after they contract for your services. That means they may not perceive real benefit of your services until after it’s time to renew for Year Two of the program they signed up for last week.
By the end of Year One of your program, customers may make the choice not to renew with you and your company. Why? You didn’t deliver The Goods as Promised to them during the first year of service (e.g., driving traffic to their website, increasing number of qualified leads, you name it). They don’t believe that they will see ROI anytime soon during Year Two.
That’s what happens when you are focused on your quota system and your customers are focused on their businesses. Ouch!
How many of your current customers have a long sales cycle? Are you prepared to advocate for them over more than a 12 month time period? Are you prepared to advise them? Are you even interested in taking that type of role?
If you are selling products, services and platforms with annualized contracts, you may be selling on assumption – and your need to serve your quota system. You assume that your customers understand it’s going to take more than Year One, 12 months, for them to see the ROI of your offering. Your customers have other ideas and needs.
Your need to make quota is mis-aligned with your customers own sales cycles.
As a result, you simply become yet another sales person in their eyes. You fall short in earning their renewal business. Why? You didn’t make the time to understand their context.
To you, it’s all about serving your quota system, making your numbers. To your customers, your needs crash into the reality of the sustainability of their businesses. That’s when you, your company and your product/service/platform becomes expendable.
How many contracts have you sold without determining whether customer needs are aligned with your own quota system? This week, review your customer base as well as those companies you are prospecting. If you don’t know the answer to this question already, it’s time to ask them about the length of their average selling cycle.
Incorporating that one question may provide you with not only the reason your customers are pushing back on renewals, but also the opportunity for making a pivot in your own selling strategy now, and in the new year.
Babette N. Ten Haken, President of Sales Aerobics for Engineers®, LLC, catalyzes business transition, startup growth, and professional development. She works with non-traditional sellers, engineers, manufacturers, and technical startups on collaboration strategies that drive revenue.