Added on July 13, 2012 Ray Collis

Sales Limbo: Are You Still Waiting For The P.O.?

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Sellers are rightly reluctant to celebrate the winning of a deal until all the paperwork has been received, but it can be very slow in coming. Indeed, waiting for the P.O. is the equivalent of Sales Limbo.

There was a time when the signing of the deal was the culmination of all the seller’s efforts and the logical conclusion of the sale. Today however a surprising number of deals are becoming un-stuck even after an apparent agreement has been reached. That leaves sellers in limbo – waiting for the paperwork to be signed, or the Purchase Order to be issued.

Our research shows that sales limbo has 7 main causes, as follows:

1. The sponsor(s) fails to convincingly sell the decision. It maybe a case of last minute cold feet, a lack of confidence, influence, or commitment on the part of the sponsor(s). Maybe the sponsor has prematurely moved onto the next challenge assuming that his, or her work is already done. More fundamentally the problem may be that the business case, or justification for the purchase may not be strong enough.

2. A key stakeholder withdraws support or reneges on his/her commitment

3. A major internal or external change occurs. The main ones being

– a merger, consolidation, or takeover

– a market downturn

– a global change in direction

– a manpower change.

4. Approval/sign-off is not forthcoming either from; the buying team, from senior management, or from procurement.

5. There is a problem with the legals – a legal question is raised regarding contract terms, or compliance issues arise.

6. There is a problem between procurement and finance, for example with terms agreed not meeting finance approval.

7. Procurement has a ploy to prepare the ground for another negotiating round and perhaps the aptly named salami technique.

But, if these are the main reasons for deals going into limbo, there are many other underling factors these include what we call Business Case Limbo, Procurement Limbo, Legal Limbo and Political Limbo.

You can get the full white paper, including a range of tips and techniques for avoiding and getting out of sales limbo by clicking here.