Why Do 95% Of Customers Buy The Last Day Of The Quarter?

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If I’m to believe the pipelines I spend lots of time reviewing, there is an odd phenomenon, at least 95% of customers make their purchase decisions and issue POs on the last day of the quarter.

At least that’s the data sales people tend to share with me. Every pipeline I look at says the same thing.

I got to wondering about that. Since we are in Q4, I think it’s remarkable and very kind of customers to come in from their holidays on December 31, to hand us POs. I worry them might get writer’s cramp, signing all the POs because every sales person they deal with has probably set the same close date, regardless of what the customer might be buying. We ought to at least give them bottles of champagne so they can celebrate the New Year.

Hopefully, you realize my tongue is planted firmly in my cheek. But go look at your pipelines, I bet at least 95% of your deals will, it will come in on December 31, even though that’s about 10 weeks away.

What’s happening here?

Well, actually, a lot of orders do come in the waning days of the quarter because we have trained our customers to do this. They know we are most likely to give price or other concessions at the end of the quarter when we really want/need the business. So even though they may have decided, it’s in their best interest to wait until the end of the quarter.

But there are orders that will come in on October 22, November 13, December 16 and other days in the quarter. Of course there are a lot of orders that will also come in January, February, March, April……..

The reality is sales people are, too often, choosing the closing date they want to try to make happen, the latest date the need to make happen, or what their manager is forcing them to make happen. But in reality it’s largely wishful thinking on the part of the sales person.

And we know what happens. A few of the deals do happen (perhaps with those discounts), we struggle to pull a few from next quarter into this quarter, and a very large number don’t happen, slipping into the next quarter (probably showing up in the pipeline at March 31.

We waste lots of time playing these games, each and every quarter. We see the same results–or lack of results–each and every quarter.

What would happen if we changed our approach? What would happen if we used the date specified by the customer based on what/when they are trying to achieve something, not when we want/need them do do something?

Lots of good things would happen. We’d be in lockstep with what our customers are trying to achieve. We’d be much more accurate in our forecasting. We’d stop wasting time on stupid games, freeing it up to find more business.

It might just produce far better and more consistent results…….

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