What does a birds-eye view of your quarter look like? Do you have a consistent stream of deals coming through predictably over the course of 90 days? Or does it seem like every quarter starts with a log jam of opportunities that always seem to stall until it’s treacherously close to quarter’s end when they all rush across the finish line at once?
If it’s the latter, you’re not alone — but it’s a key indication that your team is struggling to build a linear sales process. Here’s why it matters:
What is sales linearity?
The definition of sales linearity is when deals close in a predictable pattern on a week-to-week and month-to-month basis throughout the quarter. Instead of deals closing in bulk at the end of the quarter as reps rush to make their number, sales linearity is the practice of setting up and nurturing opportunities in a balanced way to close business regularly throughout the quarter.
Sales linearity isn’t just about closing deals earlier, it affects the entire sales management and sales forecasting process. Deals should be forecasted to close evenly throughout the quarter instead of by the last week or sometimes the last hour of the quarter and reps need to manage their pipeline properly to ensure opportunities are in the right stage at the right time.
Why is sales linearity important?
A linear sales process is crucial for improving sales predictability, which allows companies to have firmer control of their fiscal health. A linear sales cycle enables your company to:
- Easily predict when onboarding resources will be needed to support new customers
- Helps your company build better cash flow, taking the pressure off of finance and operations to do more with less
- Drives better margins, preventing the need to discount at end of quarter
- Creates a predictable revenue stream that fuels growth and other investment decisions throughout the company
So how can you get there?
5 Tips for Improving Sales Linearity
Jeff Williams, an operating partner at Bain Capital and an accomplished sales leader, recommends implementing a “30-day close” plan to finalize any deals that were committed in the previous quarter. This prevents deals from stalling and creates incentives for sales reps to prioritize wrapping up deals already under way before prioritizing earlier stage opportunities. In order to take advantage of this technique, it’s important to give both your prospects, sales reps and the entire revenue operations organization strong motivation to follow this target timeframe:
- Extend previous quarter promotions. Offer a 30-day extension on any promotions offered in the previous quarter and let them know prices will go up again after that extension period. Make it clear that your team is not willing to extend the promotion beyond that point.
- Incentivize early deals. Offer premium packages for customers who close earlier in the quarter so late stage pipeline opportunities won’t continue to lag. Structure special packages that offer customers additional goodies (e.g., access to more product capabilities or services) if they sign within a set timeframe, such as the first month of the quarter.
- Compensate reps accordingly. Build in commission multipliers based on how quickly deals can be closed so your sales team will proactively push deals through to a close. Offering an accelerator for deals that close within a set block of time and decreases over time will encourage reps to close earlier. For example, offer an extra 5% for deals that close within a month or 3% for deals that close within two months of quarter start.
- Focus on three close dates, not one. “In my career, I’ve learned that if all of your reps are driving to the last day of the quarter, then you can’t drive linearity,” Williams says. Instead of pushing for end of quarter closes on all pipeline deals, he incentivizes reps to close commits by the end of each month. By focusing on monthly, rather than quarterly close rates, your sales team can improve their ability to forecast where they’re going to land at end of quarter while generating a more predictable revenue stream.
- Get marketing involved. When everyone on your revenue operations team — which includes sales, marketing, customer success and ops — can see a deal’s sales activity, they can help drive sales linearity in their own way. For example, when marketing sees an opportunity is stalling, they can run targeted campaigns to provide air coverage to re-engage the prospect and help accelerate the deal. After all, it’s no myth that time kills all deals.
Want more? Listen to Jeff Williams discuss winning sales strategies in the webcast 5 Non-Negotiable Sales Forecasting Metrics For Every Sales Leader.