The quarterly closing puts any sales closing under pressure
The sales process flow and evolution is independent from the quarterly closing.
So why thy to fit the closing of deals just before the end of the quarterly closing as required by public traded companies?
Selling under pressure
We all know that if you are pushing the client to sign a contract or purchase order there are 3 possibilities:
- All ends fine and you close the deal.
- The prospect asks for an additional discount.
- The prospect finds you too pushy and turns away.
- The competitor takes advantage of your situation and exposes more confidence than you. And gets the deal.
The purchasers know you are under pressure to achieve your target in order to make the budget and to get your commission. They will take advantage of your awkward situation and get a better deal for them.
Investment in prospects
After all the investments made and efforts done for:
- Advertising
- Lead generation
- SEO (Search engine Optimization)
- Cold calling
- Nurturing
- Sales meetings
- Price quotes
- and negotiations that have taken several months, the closing of the deal needs to be achieved under great pressure and high speed.
All just for the sake of the quarterly budget and the quarterly closing.
All the investment made in the prospect is gambled against the quarterly closing.
If there would be no quarterly closing and the budget would not be limited by the quarter, the revenue of the company would be much higher. Higher revenue means more earning per share for the investors.
Thus more value for the share holders.
Advantage: Privately owned companies
Not having a quarterly close is an advantage for privately owned companies as their sales people are not under pressure of the quarterly closing. The sales process can have its’ natural flow and evolution.
All Board of Directors and shareholders of public traded companies should rethink this quarterly strategy as in the end they are in the loosing team.
How strong is the pressure exercised on you by your management to close deals before the end of the quarter?
How many deals slip through, decrease in sales value or are lost because of the increased pressure?
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this was pretty helpful.. not as much as the actual site though. keep blogging.
While the motivation and consequences may be different, I have found the pressure to close sales at the end of a quarter to be about the same in both private and public companies. Trying to change the mindset of shareholders may be nearly impossible for public companies, but private companies could go a long way by lessening the pressure on sales to create a competitive advantage.
[...] and close the quarters. How difficult this may sound, these complexities has a simple solution. Selling under pressure has been quite prominent in sales but there are ways to prepare oneself against these [...]