Greg: How you doing Kyle?
Kyle: I'm good today. And how are you?
Greg: My life is great. I have an interesting question for you today. So we've got someone who wants to know when do I resurrect an opportunity vs create a new one? I know from your time at Gigya you've got some thoughts on this? So, I want to know what you think.
Kyle: Yeah. My background, I've mentioned in the past, is primarily around Enterprise Sales. So this really applies to like, if I try to sell to, you know, Nike, and the deal dies and I have another deal with Nike should I create a new opportunity or should I just move that back up to 20% and do my thing? Versus if I'm a super transactional company, let's say I'm Drift and I'm selling to a company that swipes my credit card and I move on, do I create opportunities there and I bring that backup? And my thought is definitely in the Enterprise space, it's important to define what an opportunity is. I don't think companies actually really clearly say an opportunity means this. And in my mind, an opportunity is a meeting with a person who has the potential to buy your product.
So I typically set that threshold pretty low. It's a meeting with a person. So someone at a various level within a company that has the potential to buy. So they're kind of in your ideal customer profile or at least your TAM (Total Addressable Market). The person is generally a director and above, depending on the company you sell to and the level you sell to. And you got a meeting with an interest to hear about your product. In my mind that is when an opportunity gets created.
You know as you go through your cycles to sell to them, there are a few things that will happen. They'll say no, they'll say yes, they'll go dark or they'll say I'd need to hold on. If they say yes or no, it's pretty straight forward. If they're dark or if they say I need to hold on, those are kind of the same thing cause just because they didn't buy now doesn't mean that they won't. So if they go dark I typically recommend you should move the opportunity to Closed Lost and you should have a reason being it was because they went dark.
If a person says: hey, I need to specifically hold on for three months while we get some budgets signed in or get through a big project, in my mind if you should have an intermediary stage, typically like 20%, just on hold. So let's say you're ops are on 50% and you in the middle of a review and they say look we've got to pause, that should go on hold for no longer than six months. If it's going to go beyond two quarters I think that's there's just too much that can change for you just to pick up the opportunity run with it right where you were. So you might as well Closed Lost as time.
That if it's going to be someone in the six-month range it makes sense to hold it and have some sort of a nurture campaign to keep these things are going and then picking up again at the right time. That creates some weird incentives which we can talk about but that's definitely my thought on like, I can't think of a situation where you moving op from a 0% back up to 50 and keep it going. Because from a reporting perspective you want to understand this opportunity, like, given an opportunity with a likelihood that closes and if you are taking two independent shots at closing a deal, but you only treat it as one opportunity, you are completely fudging your numbers and it's not reflective of reality.
Greg: That makes sense. I'm going to push you little bit, on moving it to hold and you are much more versed in sales than I am, but my thought is just by the nature of how quickly companies change and how quickly there is turnover among decision-makers, it feels like even if you move it to Closed Lost, you should probably reach out in six months to try and close it in six months.
Kyle: I don't disagree at all. So all the opportunities we track internally, these always have a next step date. And that next state date is the trigger that sends an email notification either to the rep or various people internally saying next actions to happen and if you Close Lose a deal for timing there is always a rep can either manually input a date. If they don't input a date that's in the future we're just gonna automatically bump that out to six months, with the intention we need the process to review whether or not we should reengage with this company or not.
Cause I think if you allow for people to just hopefully find that account, it's not gonna happen. Maybe if you're selling Enterprise and you have 10 accounts in your pipeline, that's a different scenario, but realistically you need some sort of a process for reengaging with accounts and in my mind, that's just like storing next step data on an account for a next opportunity.
Greg: Gotcha. But then, in that case, can you get rid of the on-hold and move it to Closed Lost if you want to reengage soon anyway?
Kyle: So, if a prospect says talk to me in three months, you just say Close Lost for timing and then generate a new opportunity when they do or are you saying you move it back up after three months, assuming you can get some traction again?
Greg: Yeah, like what I'm thinking is if they say, talk to me in three months, I can either Close Lose it and set up a follow update or, I don't see why it's a terrible thing to just leave it in its current state for three months and just adjust your close date.
Kyle: Okay. Okay, so where I push back on that piece specifically is you often want to do pipeline reviews and an opportunity that's sitting at 75% that's realistically not going to close in the next two to three months isn't really 75%. There are too many things that can happen in those three months that should imply that it's not... because 75% in my mind is indicative of how far along they are in the process. It's like a progress bar. You know progress bars go fast and they go slow, and they go fast and they go slow. Progress bars show how far to completion you are, not how close you are actually are to completing in terms of time or speed. So an opportunity 75% is not a 75% likelihood of closing. It means it's completed 75% of the steps. But if you know that they are taking a pause for three months, you have to assume that things are going to change in a material way and that you are not really 75% anymore.
Greg: Okay. Gotcha. So it sounds like the on-hold is like you are kind of threading the needle cause if it's more than three months I think you would probably prefer to just close it and if it's like a month it is acceptable to leave in the current stage. So, there's like this middle ground that the on-hold was for?
Kyle: One of the rationals behind this is oftentimes you do account shuffles, right? We're going to take accounts from everybody kind of mix then around so that we just mix up who the sales force is, it's every two months to us. And so, one way that reps will try to protect their accounts that they like is they'll keep open opportunities. So if they had ten opportunities of 75% not about to close, they're essentially hoarding their accounts. I heard some call it like licking something. If you have food and someone wants a bite of it, if you lick it they don't want a bite of it anymore. That's essentially what sales reps are doing by holding these accounts open. But if they move off to on-hold, that's like a clear delineation saying: look, they're not about to close now, but I've got a real opportunity to close this at some point. They just need to pause for some period of time.
If an offer is on hold, I think a rep should have the ability to retain that for six to nine months but beyond that? If you haven't had traction in six months, that account should be Closed Lost or you can lose that account. But if you are able to make meaningful progress with this opportunity, then it should be at the right stage and you should own it. Like that's your deal for some period of time. Of course, different companies are going to have different perspectives on the length of time there but that on hold is like a way to show: it's not active, but it's certainly not 0. I want to protect this because I think I can get it going. So within some of the ditches, that keep it from left to right, I should be able to keep this account.
Greg: Gotcha. Does your opinion change if it's a new logo opportunity versus an up-sell?
Kyle: Interesting perspective. So if you're a new logo I definitely feel this way. If your sales rep, mmm, I guess companies handle up-sells in two different ways and what I've seen and you may see something different so I'd love to get your thoughts. They'll either have the account managers responsible for up-sells or the sales rep tied to account is responsible for the up-sells. Some companies just do things differently. If I'm managing account managers or I'm an operations person, I'm less concerned with account managers hoarding the accounts the way that sales reps do, cause sales rep tied more closely to commission and they think certain accounts are stronger than others. If a sales rep has an up-sell, realistically up-sells should be relatively quick. Because if you have sold to a company before they're going to make a decision right away to move up or move down or say: I need to pause for a significant period of time.
So I would say up-sells should either be in the progress of being closed or they're just not at a good time right now. I could be convinced that on-hold makes sense. Given my like my pitch on why on-hold is the way to go, do you agree based on where you were before or do you still think not having that is the right way to go?
Greg: So I think I'm a fan of on-hold in theory because, and when I say in theory, it's because there is a very specific usage and there is a very specific window of time where it gives you more information. And that's the goal of everything we're doing is how do we get a better insight into what's happening.
Greg: So there is definitely a very real scenario where it gives you more insight which I'm a fan of. I think if I was running sales I wouldn't have on-hold because I would just be too worried about everyone abusing it and not wanting to lay down their close rates.
Kyle: So you think that sales reps will like put stuff on-hold rather moving it to Closed Lost so that they're inflating their win rate?
Greg: Yeah. I think there's like this weird energy that sales reps have around marking something that's lost and just see too often where ever there's like this future stage or on-hold stage or deal delayed stage there are so many things that end up there, that when you really talk to the rep there's no chance this company buys.
Kyle: You're probably right. There is a lot of hoarding that can happen where like: hey man, you've got 30 ops in your pipeline but 20 of them are on hold this doesn't make any sense. Like your pipeline has 10 opportunities. That's really where it's at. This is predicated on a strong operations team and strong automation and like clear reporting. And most companies are pretty not that solid at that so I think that you're probably right. In most companies that do put this in place don't have any reporting or fact stop mechanisms to prevent abuse. And so I think it does get abused. But I think that it, it's a communism, if you can get it exactly right, at the right time without any abuse, it would be fantastic but the reality is that everyone always screws it up. So that's kind of my thought. If you can be really solid and prescriptive, you can make this whole on-hold thing work. If you're gonna wing it and hope reps don't abuse it, you're gonna set yourself up for failure.
Greg: Right, here's what the ultimate question is: given what you feel about on-hold and I'm kind of agreeing with you, what percent of your clients would you recommend to do this?
Kyle: I'd probably tell all of them. Let me think about this for a second cause that was my gut reaction.
Greg: No, you want to tell all of them but in three months when their data is totally muddy, cause 30% of their pipeline went on-hold, you're the screw-up.
Kyle: Okay. The number of ops on-hold is a metric that should be considered. Would you agree?
Greg: Sure. But to what end? Like, play that one out.
Kyle: It's like a canary in a coal mine. If I go to a company and they're like we have like this on-hold stage. The first thing I do is take a look at it and see what percentage of the total opportunities are considered on hold. If that was greater than 25%, I would probably say: you have a problem. People are hoarding opportunities. There's no way that a quarter of your entire deals are on hold in a meaningful way. It should be like a handful of deals. Because I think that you're right, the point you made of like, reps think every deal is going to close and so they really want to hoard stuff.
I've had this problem myself, right? It's like, the deal went well, the call went well. I really push reps to disqualify things. They should be looking for things why something's not gonna work rather than making things work all the time.
You should have a mechanism for reps to, for people that truly say things are on hold. But there should be clear reasons for doing that like, they're doing that because they've got another project that's ahead of us. So this has happened with Salesforce consultant. Like, look, we want to start doing Salesforce Consulting with you guys but we've got to wean off Hotspot first. That's gonna take a little while before we are ready to move off Hotspot. Okay cool. Let's keep that project aligned. Your start dates are in place. That's real. But if it's just like: hey we had a great call, I think your pricing makes a lot of sense, why don't we talk and then they just go dark, so I move it on-hold, that feels wrong.
A lot of it will require good management at the middle level of like managers sitting down with their team and say: okay, who is our champion? Are they like galvanized to close this deal or are they just telling you what you want to hear? Have you spoken to the holder of the budget? No. Okay then you probably don't have a real deal here that's on-hold you're just like trying to hoard this account.
This comes back to if you have a solid operation and management leadership team that's really clued into deals, it makes sense to have this. Again this is more towards the Enterprise side, where you don't have so many deals it's worth each one being reviewed very closely. If you're hyper transactional where it's one call closes, sales managers just can't stand on top of that cause there are just too many to keep track of. It lends itself more towards the Enterprise space and less towards transactional companies.
Greg: One more point on like the canary and the coal mine. I think what would actually end up happening is, you have this report that shows on-hold is on the increase, this is a problem. What ends up happening is, the VP themselves are gonna say: just get rid of that stage.
Kyle: That could happen for sure. With such a knee jerk reaction, it's not really addressing the problem. Like lick the spoon. Nobody is going to use your spoon after you've licked it. So reps will always find a way by saying. We used to have this problem at a company I worked at, our rule was: if you've touched an account within 90 days, then you would be able to attain that account. We wouldn't be able to take it away from you. So like every 89 days, every sales rep would say like: hey, happy Labour Day. Hope you're doing well. And that would count as an interaction and so that would remove the account from potentially taken away from them which I don't like either. There needs to be some mechanism to really shuffle accounts around without allowing people to just hoard their own accounts.
Greg: I think that is like a whole other problem.
Kyle: It's like a major major major operational challenge to make sure, cause like, I guess this is getting into another question but like what's your thoughts on shuffling accounts, period?
Greg: I am a fan of having the inflow and outflow of accounts from reps name to automated.
Kyle: So there's some consistent process of doing that?
Greg: Yeah, at Keep Trucking if you had reached out to an account a certain number of times, haven't gotten a response, it will automatically move you out and give you a new account.
Kyle: So a rep would be working a smaller number of accounts but they would always be cycling in and out based on what activity you've added them.
Kyle: I had a guy that works at a company here in Bend and he said his revenue ops team, delivers him ten leads a week. That's all he gets. At the end of the week, those leads are taken away and he only works those ten so he's doing tons of research and really reaching out to them directly. At the end of the week, if they don't respond with a meeting, they move on and he moves on to a new ten. So the ops team are constantly identifying people that are in buying mode and he's only getting a few people but he's got to be hyper prescriptive about it. Anyways, he's getting these very few leads and he's having to process them and try to reach out to them before they're taken away. But it sounds like that should be its own podcast topic that we should cover.
Greg: Yes. We've talked about creating new ops, resurrecting ops. So in your mind is there ever a time when you would prefer to resurrect an opportunity?
Kyle: No, I cannot think of a situation where a rep goes: they're Closed Lost because they don't have a budget. The company calls you and you say I'm gonna move it back up to 95%. The only caveat to that would be if you moved enough to Closed Lost, and you say: hey, they're gonna go with a competitor and within the next day they call you right back and say: look that competitor fell apart we actually want to go with you guys. That would be that's not a brand new opportunity, that's really the same deal.
I could also be convinced if a company called me and said we did pick that competitor but it turns out we made a mistake and we actually want to go with you guys because they screwed up x y and z. that feels like it's the same opportunity. It was temporarily misclassified. That feels like a situation where I'm breaking my own rule and I tend to like to be consistent. So in that situation, I would probably create a brand new lead or a new opportunity. Because you could still totally screw it up. You can still totally win it. The competitor could come and beat you out again and you would want to know that in two separate instances that we lost to a competitor. That would be a rule. What about yourself?
Greg: I am with you on that.
Kyle: You should be intentional about it, right? It shouldn't just be reps way in and say: yeah I want to open this ops because they feel like it. They should go to the ops team and say: look this is a real opportunity still. I was moving it to 0% because I thought this. This is what's different. I think we should open it back up. And it should be intentional.
My guess is companies don't have the bandwidth for that. They're just gonna let the reps do it.
Greg: Correct. And how many of the companies we work with is the VP of Sales also Sales Ops?
Kyle: For sure, yeah.
Greg: Cool, so it looks like we have everything. As always let us know if you have any questions. Kyle, thank you so much.
Kyle: Yeah, thanks, man.