4 Steps for Getting Out of the Short Term Focus Trap
I was working with an insurance client some years back that had a very interesting pattern for closing sales. The company had a quarterly sales cycle, and each quarter roughly 55% of sales was brought in during the last 3 weeks of the quarter. Was this due to careful co-ordination with the buying cycle of prospects and skillful sales pipeline management?
As you might have guessed, the reason was much simpler. Because of the time horizon the whole team was cruising at 40 mph, metaphorically speaking, for two months of a quarter, and for the last month of the quarter speeding at 80 mph. Risking fines i.e. putting bonuses, personal health and relationships at risk.
External conditions usually lead us to short term focus. Companies have the quarterly results announcements, most of us in sales have a monthly cycle for determining our commissions and bonuses. It makes perfect sense to focus on the month or quarter at hand because it’s directly related to our next pay check. But this only makes sense in the short term.
I’ve been balancing short and long term objectives throughout my career. When you’re selling a training seminar that is 3 months away, you rarely hear the objection that your customer has something planned for that week already. If you’re selling a seminar that is due next week, you get that objection on 7-8 calls out of 10. This makes a huge difference to conversion rates.
While most businesses goods and services don’t lose their value quite as dramatically as with seminar tickets (and hotel rooms, airline tickets, etc), the difference in conversion is still comparable. There are strong psychological forces that work against you if you sell, focused on the short term. Your prospect can tell when you’re extremely eager, borderline desperate to sell them, and this diminishes your credibility as someone they can trust. It’s not uncommon that close rate drops by more than 5X when you sell, focused on the short term. Also, the discounts customers ask tend to be notably bigger.
The good news is that there’s a way out of the short term focus trap.
Step 1. Acknowledge there is a long term.
Take a closer look at buying cycles in your business and decide what’s an optimal time horizon. When you’re selling cars it may take 3-6 months before a business buys their first vehicle, and 1-2 years before they’re ready to replace a significant part of their fleet. Take this into account when you’re planning sales goals and activities, and when you’re planning you pay checks.
Also, acknowledge that you want to be in the business you’re in for at least 1-2 years. Without a longer-term view you’re better off chasing one-off “lucky” sales (and skipping this post).
Step 2. Set longer-term goals.
Take the reasonable time horizon, and set your sales goals for that longer period. Then start matching your existing customers and deals to your longer-term goals. Some patterns will emerge, you’ll see which months look good already and which need more effort. And the earlier you acknowledge that, the sooner you can take action to improve the situation.
A good habit here is treating your annual salary as a benchmark for success instead of your monthly pay, even if the rest of the world (including your boss) wants you to think in shorter cycles.
Step 3. Balance your goals with being customer-centred.
Making decisions is not easy for most people, and applying pressure doesn’t make it any easier. Don’t get tense if a customer decided to postpone the purchase this month. Instead, be as positive about it as possible. This will be remembered, increasing the odds that a deal will be closed in the future.
Look at yourself as an assistant decision maker, not a sales person, and good things will follow.
Step 4. Know the difference between a postponed decision and a NO
Measure the length of your personal sales cycle i.e. how long does it usually take for customers to make a purchase. And then treat deals that fall out of the norm with caution. Don’t be afraid of losing deals. It’s better to get a definite NO and realise you need to talk to new prospects, rather than have a low-quality sales pipeline that keeps disappointing you month after month. Good old active sales pipeline management!
I remember when Pipedrive’s CEO Timo, who I had the pleasure working with in our training business, once made a decision that there shouldn’t be any available slots in his training schedule 3 months going forward. After a bit of a sprint he accomplished this objective and started working on dates 4-5 months away. He was more relaxed and confident in sales meetings, had less pressure to make compromises on price and he started a long streak of excellent sales results. Needless to say, this had a positive impact on his pay check, all because he had gotten out of the short term trap.
Implementing these 4 steps is not easy, this is not your “double your sales in 15 days”– type advice. It’s about changing your attitude and habits, which is never easy. But the good news is the results are solid and solid-lasting.
Good luck! And if you more good approaches for getting out of the short term trap, please share them in comments.