So with the end of the year coming up again, it’s time to once update a classic SaaStr post.  It may even be our official SaaStr Holiday post, really.

On why the best sales teams just close so much on the last day of the year (be it Dec 31 for many of you, Jan 31 for others).  When there really is no need to buy then … at all.  Not really.  Especially these days, when in most categories, things are just harder than at the start of the year.  Sometimes, a whole lot tougher.

There are some real mysteries in SaaS. Even now that I understand them, I still see them as a bit of a mystery. Let me list a few:

  • Why do customers buy a ton of seats up front, when they could start with a few and buy more later?
  • Why do customers buy so much on the last day of the month? Great for sales reps looking to hit their quota. But why are customers in on it?
  • And the Greatest Mystery of All: Why The Heck Do Customers Buy So Much on December 31?

I mean think about it:

>> Nothing is going to get implemented at the very end of the year, even if it is purchased. Why bother buying then, if you’re not ready to deploy?

>> No one is left in the procurement department to issue a P.O.

>> Nothing extra is left in the budget. If there was budget to burn, it would have already been burnt earlier in the month of December.  And even if there is budget left, you generally can’t burn it on a recurring revenue product.  Because budget generally has to be spent in the timeframe when a product is used.  “Budget burning” works much better in products like Adwords where the expense really can be recognized in December.

>> No one is around. Your purchaser’s boss is off for the holidays. Some people are still working hard in the office — but probably not people that buy and deploy software. I mean, c’mon?

>> No new leads are coming in. Leads dry up at the end of the year, for natural reasons. No one is looking to buy anything new between Christmas and New Year’s.

So apologies in advance to those that disagree with me here. I know some will. But let me tell you what I’ve learned. Mediocre sales teams don’t close much at the very end of the year. Because there’s no intrinsic reason for the customers to buy then. Call me on January 6.  (And within sales teams, the very best often close a lot on Dec 31, and the rest … don’t.)

And yet, the great sales team close an amazing amount at the end of the year — even in tougher times.

And the reason is simple, because it can really only be one thing. It’s not the slick pitch. It’s not the hard sell. And it’s not even the amazing product. And it’s certainly not really, not truly, some Soon-To-Expire-Last-Chance-Amazing Year-End Discount.

No. It’s only one thing that would get me to buy on December 31, or you, or most customers.

It’s the relationship. It’s giving back. It’s when a sales rep has done such a great job helping the prospect through the discovery period, the trial period, the learning, the exploration … when the rep has truly added substantial value to the prospective customer’s discovery and decision process … that the rep has earned the right to ask for something back.

That something back, The Ask, is to exceed their year-end goal.

As the year ends, see who pulls in those amazing extra deals on December 30 and 31.

Those are your potential future leaders, either as individual contributors, or managers. The ones that truly not only understand the product and the pitch — and not even just how to deliver incredible value during the sales process — but the magic of how to connect that value to a signed contract.

And that drives down sales cycles, increases close rates, and drives up your revenue per lead. Magic.

(Note this is an update / refresh of our classic post)


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