End-Of-Quarter Sales Rush Costs Companies Money

The market is pushing companies to hit incredibly high numbers, quarter after-quarter and month-after-month. To comply, firms turn up the pressure tactics and close last-minute deals in unnatural ways.

- Ken Krogue

Ask any organisation what’s happening in the sales department on the last few days of the month and the entire last week of any fiscal quarter. You’ll probably get an uncomfortable laugh and a shake of the head.

SALES TEAMS ARE CLOSING DEALS,AT ALL COSTS

The market is pushing companies to hit incredibly high numbers, quarter-after quarter and month-after-month. To comply, firms turn up the pressure tactics and close last-minute deals in unnatural ways. Data shows that sales reps give better terms to customers who wait until the last minute – with both sides knowing they can rely on dropped prices and a sure closing, thanks to the end-of-the-month company push.

It is a vicious cycle. And companies know it. Yet they continue the practice, month-after-month and year-after-year, perhaps unaware of how much it’s really costing them.

InsideSales Labs, a division of our company, InsideSales.com, recently conducted research analysis on 9,8 million sales transactions from the anonymous data of 151 US companies over nine consecutive quarters (Q1 2014 through Q1 2016).

Collectively, these companies annually sold a combined $54 billion, averaging $360 million each.

We learned that at the end of the month reps often push deals that are not ready. Our data shows that sales people close three times as many deals at the end of the month as during the rest of the month — but lose 11 times as many (11,43 to be exact). Thus, while the end of the month shows an increase in a firm’s overall number of sales, the end-of-the-month push coincides with a 51% decrease in overall sales win rate. Reps are less effective at closing the right deals, with appropriate pricing, at the end of the month: Our study found that overall dealsize declined by 34,5%.