DxContinuum Blog

How Predictive Clears the End-of-Quarter Discounting Logjam

May 11, 2016
By Kevin Brooks

Predictive analytics is transforming the modern B2B sales organization, bringing new insights and guiding strategies and tactics across the entire sales pipeline. But it can also have a positive impact on many related parts of an organization. Recently, we have been encountering a scenario that is very familiar to sales leaders: the logjam of discounting at the end of a quarter.


What is the Logjam?

You know the drill. Deals are on the way to signature, everyone feels good about getting the close and celebrating a well-earned win. But at the last minute an objection crops up. Contract negotiations stall while a sales rep seeks approval to offer a pricing incentive to get the deal across the line. Reps pace outside the legal or finance team department like some old fashioned scene outside a maternity ward, waiting for approval to proceed with a revised "best and final" offer.

Meanwhile, legal and finance teams are buried with last-minute requests for pricing concessions by a multitude of sales reps. Barely able to keep up in the best of times, they are now slammed with frantic, urgent, highest priority demands. As time drags on, prospects get frustrated and some deals may not make it across the line. Even those that do might kick off their service with a bad taste in their mouth.

A Better Option

Predictive analytics applied to an opportunity pipeline can be incredibly precise in predicting the deals that will close in a given quarter. Here at DxContinuum we regularly see 85% or better in predictive accuracy. What is less known is that a related application of predictive is to identify the most likely price point at which a deal will close.

When considered in the context of the end-of-quarter logjam of discounting, predictive analytics brings the following relief:

Reps can anticipate ending price points early in the sales cycle.

This is important, as it enables pre-approval of a floor below which negotiations are unlikely to go. Far better to have approval to discount and not need it than to not have it as the quarter's deadline draws closer.

Upcoming deals get the attention they deserve.

When reps spend their time working internal approvals and administrative issues, they aren’t out closing other business. A more efficient approach accelerates the sales cycle and opens up cycles that can be invested in late quarter and future funnel opportunities.

Legal and finance can spread out the workload.

When sales has a better view of price points, legal and finance have a more consistent and predictable workload. There will certainly be debates and discussion about pricing concessions, but when backed with data from an accurate predictive model that continuously adapts and improves its scoring, those discussions can resolve themselves quickly.

Unblock Success

Experienced B2B sales pros know that there are a thousand ways a deal can get tripped up at the last minute. Many are out of your control. However, success in sales often comes down to managing all the factors that you can control, and in anticipating problems before they can scuttle a win. 

Predictive sales analytics is often seen solely as an advanced sort of lead scoring, which is a bit like describing your CRM as simply a contact database. In reality, there are many use cases where predictive tackles real and vexing problems that get in the way of a sales team making their numbers. Unblocking the logjam of discounting at the end of the quarter is another way to consider this powerful and transformative new technology.

Kevin Brooks

Written by Kevin Brooks

Kevin Brooks is responsible for all sales and marketing at DxContinuum. He is a marketing innovator with more than 20 years of leadership experience in both startup and Fortune 100 software companies. His most recent role was Chief Marketing Officer at Ivalua, Inc. Prior roles include Senior Vice President of Marketing at iTradeNetwork, Inc. and Chief Marketing Officer positions at FoodLink Holdings, Inc., IQNavigator and TrueDemand Software. He is also known for co-founding the procurement industry media site Spend Matters, and for his marketing leadership at Ariba and ADP. Kevin is also chair of the board of directors at the Santa Clara Vanguard, a national nonprofit youth music and arts organization, and he holds a Bachelor of Arts degree from Macalester College.