What is Deal Management?
Deal management is the process of defining specific deal parameters and using them to negotiate and secure deals. By practicing effective deal management, businesses can ensure their sales teams are taking a wide range of important factors into account when working on deals, so that beneficial deals are secured quickly and efficiently.
Let’s dive into what deal management actually is, and find out how deal management software is now being used to maximize the profitability of deals across a range of different industries.
Deal Management, Defined
As said above, deal management can be defined as the practice of identifying, monitoring, and analyzing a wide range of deal-related parameters. These parameters might include anything from a customer’s purchasing history to the status of the product they’re interested in and the discount levels that they’ve recently been granted. Good deal management will also consider operational constraints, using such information to create the best possible deals for a company and its customers.
The primary aim of all deal management is securing a deal that works for a seller in several ways. Good deals will, of course, offer the maximum potential profits on a sale – and will therefore provide a considerable ROI. But they’ll also take other factors into account, for example, the company’s market share and how deals might affect this over time, as well as the revenue of the entire brand – not just revenue from the product in question.
Deal management encompasses almost all elements of the sales process. So it’s hugely important for companies who want to consistently make good deals, not just more deals that may actually be more costly for them in the long run – either by cheapening brand perceptions or capturing minimal margins (if any!), or both.
Effective deal management is now being facilitated through the use of innovative solutions which have been designed to maximize the potential of a whole range of different factors. Such solutions help with everything from data analysis, used to inform the best way to secure deals, and automated information on discount levels. Deal management solutions can also be used to keep an eye on sales team performance indicators, such as the time taken to secure a deal and any other factors that may have influenced a buyer’s decision.
There are two parts to deal management: the first is the process to successfully negotiate agreements for providing goods and services with pricing and terms specific to the buying organization.
The second part of deal management is executing the agreement over its lifetime, and facilitating easy, informed negotiations for additional, profitable ongoing agreements with the same customer. This includes timely and accurate pricing, adherence to any agreed terms for pricing or supply, as well as monitoring for contract performance issues, including surcharges, fees, or even volume compliance.
How Can Deal Management Benefit the Sales Process?
Deal management provides a range of benefits, which are evident throughout the sales process. Here are just a few of them:
Create consistency in deal processes
Everybody in Sales wants to close deals, but each may have an idiosyncratic way of going about it. By setting deal parameters, such as discount levels and other guardrails, you create internal consistency and drive standardized behaviors within your Sales team, eliminating unforeseen risks.
Improve the sales experience for customers
Many B2B decision-makers think sales reps are unprepared. By standardizing best practices at scale across the entire sales organization, you’ll improve the sales experience for your customers while enjoying pricing guidance and margin protection.
By standardizing processes, especially by employing a deal optimization software solution, you move beyond “guesstimating” what price will deliver the best possible margin and into making those determinations using historical transactional data to calculate optimized prices that maximize margin and minimize the risk of losing customers during any sales negotiations.
Provide visibility and oversight
The longer or more stop-and-go a sales process is, the lower the number of deals you can close. To illuminate what may be putting the brakes on a deal process, sales leaders and reps need visibility into that process, ideally via a technology solution that provides the level of oversight needed to identify and iron out issues and expedite deals.
Price optimization is a crucial part of deal management because it puts a stop to waste and gives teams the best possible chances of securing deals.
The best deal management relies on intelligent pricing optimization, and for that, you’ll need complete access to pricing data and inventory information. Deal management tools bring this information together and make it easily accessible for all team members, limiting the risk of any deals being lost unnecessarily.
As we’ve pointed out in another post that goes into price optimization in great depth, it’s the practice of determining the most effective pricing for a product or service. Ideally, it leverages good data, and enables companies to set price points for their offerings that are most likely to be attractive to customers.
Those price points will optimize profits for the company and may also help it expand market share or grow into new markets. What are other benefits?
Those price points will optimize profits for the company and may also help it expand market share or grow into new markets. What are other benefits? It can drive quick ROI improvements, as ROI can be closely monitored with changes visible in real-time, allowing quick response to demand fluctuations. Optimal pricing maximizes sales and profits, as more customers buy more products. And price optimization, since it’s based on gathered data, can also allow you to mine for insights into customer behavior and preferences. That better understanding of customers allows you to offer the right products at the right prices.
Shorter deal lifecycles and faster selling
Today’s sales managers are under unprecedented amounts of pressure to get deals done fast. Deal management tools can be used to take a weight off their shoulders, easing the burden that this time pressure presents.
Deal management tools speed up the sales process, by making sure that team members are always fully equipped with all the information they need to secure deals. This results in shorter deal lifecycles and faster selling.
Today, B2B commerce is increasingly electronic. Keeping pace with customer expectations of speed, accuracy, and response requires lightning-fast pricing guidance using software-driven models that far surpass manual pricing processes. Enterprise sales teams receive optimized pricing guidance allowing them to quickly win more deals.
Raise Everybody’s Deal-Making Game
At the end of the day, you want your sales reps to perform to their highest potential. Deal management is an important asset in helping them do just that. Great cooperation is vital in any team, and for sales teams, it’s something that should never be forgotten about. Deal management tools can help to nurture a collaborative environment by providing unparalleled visibility over all the deals that team members are working on.
By making this information accessible to everyone, companies can ensure their teams are working together harmoniously. Tools also provide complete visibility for management, making it easier for those responsible to check deals at any stage.
Expert Deal Management Solutions
A great deal management solution can have a real impact on the potential of a business, ramping up profitability and productivity in a relatively short space of time. Deal management tools improve selling opportunities, helping companies to unlock growth by maximizing their profits from every deal.
Vendavo’s range of deal management solutions has been designed with these benefits in mind. We offer a range of options to companies looking to empower their teams with effective deal management, and we can’t wait to show you how these tools work. Get in touch with our team today to learn more about deal management with Vendavo.