Sales Secret Weapon: The Essential Close Plan

OK, I confess the headline grabber I wrote isn’t correct.  A Close Plan should NEVER be a secret, it should be the opportunity roadmap.   I bet if you were driving someplace you’d never been to before – you’d use a map – A LOT. Here are some thoughts on why I ALWAYS use a Close Plan for important deals.

A Close Plan is a jointly agreed upon set of steps that buyer and seller jointly agree need to happen to finalize a contract.  It’s a way of ensuring that the opportunity is progressing and avoids surprises along the way. Since most prospects aren’t as familiar with your process as you are, it’s important to be clear and set expectations of exactly what will happen and how long each step will take.  Other authors have made the point not to call it a “Close Plan” in front of your prospect (since it may be seen as ‘dehumanizing’) and prefer Engagement Plan – that’s great too.  I simply state : “Here’s a list of things that need to happen in order for us to begin the project on time”.

Don’t show up with a timeline and announce to the prospect – “Here’s the plan”.  Instead, mention that you need a planning session to jointly understand what needs to happen between now and the project start date.  Setting up the discussion to create the list of steps that need to happen for “XYZ Project” (the prospect usually has a name for the project they are acquiring software for) is important for several reasons:

(A) It allows the prospect to feel ownership for action items – it’s their project.

(B) Allows them to openly discuss what needs to happen on their side to check each item off the list.  (How often is a key person on vacation at a critical moment? Or last minute someone realizes the Board needs to review the decision – and they won’t meet till next month?)

(C) Allows you to share what happens in your organization for a contract to be executed.  Prospects may assume you can make everything happen immediately. Until you explain the reality, don’t expect any empathy when you don’t deliver on their optimistic expectations.

Timing is Critical

For software/technology businesses, each quarter close is essential.  Management and Sales teams are measured on performance to quarterly targets.  Revenue predictability is critical for every function of a Software Company, from Management, to R&D, and especially to Consulting Services.  All those teams need to know when the revenue is happening in order to have appropriate resources lined up and ready to go. Therefore, timing the close is critical to a technology sales person.

Customers may be trained to expect a discount at the end of a fiscal year (or quarter) – so that may be worth acknowledging, “We both know my company end-of-year is coming up, so you might be expecting an extra discount…”,  If you are really taking care of your customer – you will clearly signal when you’re giving them that final price. I had an SVP of sales once say directly to my customer, “Two things are critical here…Price and Time. If you can commit to the timing of our agreement, I can commit to our best price.”

In order to effectively write and maintain commitment to the CP, the customer needs to understand the benefits to THEM for having the close plan.

Benefits to the Customer of Having a Close Plan
  • It manages their project Start Time – without an agreement, the project gets delayed.
  • Helps them ask the right questions internally of what needs to happen – and plan contingencies as things change.
  • Allows for resources to be properly assigned and slotted (both during the close…i.e. CFO signature, Contracts Review…and Project Mgr assigned to begin project)
  • Clearly signals when final contracts will be negotiated, terms and conditions approved and pricing finalized.  (Avoids last second demands that can stall in legal review).
Benefit to the Seller of Having a Close Plan
  • It clearly shows what needs to happen to reach agreement.

The seller only needs one reason – to understand what needs to happen to close the deal.  It should be constantly reviewed and validated. Ask questions such as, “Are we on track to completing these open-items?”… or “If I complete steps X,Y,Z…are you still confident we will be signing by that date?”

Thinking of the Close Plan as a checklist of items that need to happen also identifies some items need to happen in sequence, and others that can happen anytime.  Identify the real bottlenecks early and stay focused on them.

Using the Close Plan During the Negotiation

If done properly, a jointly-agreed to CP is a commitment from both parties to work on a schedule.  Identify areas where negotiation will happen, and what stage final pricing and proposal will be reached.  Customers understand that proposals and pricing can’t be finalized until the contract terms are reached (since things in the contract can impact costs, liability etc..) and therefore you should identify the time to negotiate.  After that time – any further changes to the agreement may add cost and delay. Cost and delay equal RISK, and everyone should work to minimize risk as much as possible. The parties should feel a sense of urgency to get the tasks done on the checklist and if handled well, is a good sign for how the companies will work together once they become partners in the actual project.

The level of detail you go into while creating the Plan will depend upon the value of the deal and the complexity of its moving parts.  How many parties need to be aligned?  How much risk (to the project or even  the sale) is there?   Good sales people make good habits of using a Close Plan, and constantly re-visiting it during a sales cycle.

May all your sales cycles be progressing!