Prioritizing the right deals - A guide on deal risk metrics
How much of your sales pipeline are you actually converting? How often do you feel to inflate the forecast numbers as the actuals are not gonna cut it? It’s natural for managers to expect their reps to convert all the deals which are easy to convert. But are they really able to perform that way? Deal Prioritization can be the solution that you are looking for.
What is Deal Prioritization?
Not every deal in your pipeline should be given equal attention, high-growth companies tend to lose many deals which they could have converted as they don’t prioritize converting deals in time. In the high-ticket SaaS market, where the pipeline conversion rate is just around 5%, prioritization is a need not an option. Focussing on the deals which are likely to convert and respectively reallocate resources to get the best value out of the sales pipeline is Deal Prioritization. It can be done on the basis of various metrics depending on the organization. The best way could be to design and analyze a risk-scoring mechanism for the deals and based on the same create a priority queue with high-conversion deals on the top.
How to Prioritize deals?
Many sales metrics can be used to rank the deals followed by the creation of a priority queue. Most importantly, the metrics should always depict the risk associated with the deals, no matter how big the deal amount is, high-risk deals should never be prioritized as that would just be a waste of resources. Here are some important metrics you should always consider while assigning risk scores to the deals:
Prospect Responsiveness This metric enables us to see if a prospect is responding to emails and whether or not meetings have been planned. It is an important metric as unresponsive prospects may always stay unresponsive and all the resources put in the deal may go to waste.
Contacts Engaged This metric checks the number of unique contacts to whom emails were sent or who were added to meetings. By comparing the number to past data, we can determine the potential risk in the transaction.
Recent Meetings This is the attribute that determines the activeness of meetings based on not only the numbers but also the trends in meeting frequency. Outliers from the trend should be given a lower score.
Time in the current stage calculating the ideal execution time for each stage based on past data a manager should compare it against the current deals, and the deals which exceed this time limit without any strong reason should always be flagged and moved down the queue.
Deal Amount Though deal amount should not be a deciding factor while setting up the priority queue, there is no denying the fact that it still is an important metric. Rather than just making a queue with a descending trend of deal amount, you should check the trend of changing the deal amount in a particular deal judging the sentiment of the sales rep associated with the deal.
Using AI in Prioritization
We listed all the important metrics of risk scoring, but it still is not an exhaustive list. In the modern SaaS sales market, basic risk scoring might just not be enough. An emerging trend of AI in sales shows that you can do much more with the power of AI. Here are some additional risk metrics you may be able to use with the help of AI:
Buyer Sentiment To be able to judge the sentiment of the prospect in all the communication can become a game changer as it can affect both conversion probability and deal amount. Using AI for sentiment analysis along with automated data capture can provide advanced deal insights increasing the win rate by a lot.
Opportunity Risk It examines a deal's present stage, which is then compared to historical and real-time conversion data to determine the likelihood of a contract being won. Nothing can be a better metric than the projected conversion rate taking various risk metrics in consideration, this master metric can become the go-to factor for the priority queue.
Real-Time Insights The best use case of AI in sales is the ability to perform real-time data analysis. To be able to spot dynamic deal risk scores along with actionable insights can become the best feature a sales rep can ever ask for.
Prioritization would surely help you reach the conversion rates you desire, but only to an extent. And using AI in risk scoring is just the tip of the iceberg ie. AI in sales. To learn about more use cases of AI and understand the successful implementation of AI-integrated sales pipeline read: How to empower your sales training with modern revenue intelligence platforms