About five years ago, a friend of mine talked me into joining a concierge physician. It’s expensive and the membership fee is not covered by insurance, but the depth of analysis in the annual physicals, time spent with the doctor during appointments, and accessibility to care were all attractive to me – especially the depth of predictive analysis and preventive care. But $3,000 per year? Really?
When I asked my friend if it was worth it, his answer was perfect: “Is it worth $3,000 per year? Nope. Is it worth $120,000 over the next 40 years? Absolutely. You have too many people relying on you, man. You need to be here.”
Done. I signed up and am very glad that I did. I don’t like that $750 hit to my Amex every quarter, but I love the feeling of knowing that I’m investing in the very best preventive care possible to improve my chances of living a healthy life into my 80’s, 90’s, and beyond!
I’m grateful for the way my friend answered the question because I would’ve analyzed myself out of most other answers. I would’ve thought: “I’m healthy. I’ll save my $3k a year until I start feeling bad.” I would’ve analyzed every year to ensure that I entered this program at the perfect time to optimize both health and finances … and the overall result would’ve been compromised.
Do you let your salespeople assign their probabilities to sales opportunities? Do you think “they know better than a CRM system” or “two opportunities at the same stage could have two completely different probabilities of closing”. Guess what? You’d be correct on both of those statements. But you shouldn’t let your salespeople assign probabilities to their opportunities.
When you do this, you’re trying to optimize each individual project, and the overall projection will be negatively impacted. Just like if I tried to be perfect in my healthcare every single year, then I would miss the big picture. Now, if you have five opportunities in your pipeline for the quarter, then sure, let your salespeople do their thing. (For the record, if you only have five opportunities for the quarter, you’ve got bigger problems.) However, most sales teams have 50, 100, or more deals in their pipeline. Take the subjectivity out of the equation and let the large sample size work in your favor. How?
- Define the stages of your opportunities. For example, Qualified, Proposed, Verbal Affirmation, Contracting, Won.
- Assign a probability to each stage.
- Hold strong and stay disciplined – the assigned probabilities must stay static to the stage, even if it does not make sense.
You’ll get a ton of pushback on this: “I know I haven’t done the proposal yet, but this is a done deal”, or “Yes, we’re a finalist, but I know they’ll go with their current provider”. That’s ok. They’re right, but it’s no way to manage a pipeline. When probabilities are assigned objectively, it all balances out in the end. However, if you let your salespeople subjectively assign probabilities, you’ll be victim to another moving part and several styles of judgment, giving you an inaccurate projection and no way to learn over the months.
