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Deal Desks: The Secret to Deal Profitability

We’d all agree that we sell more complex offerings today than we did 10 years ago, mainly as a result of the shift from product to solution selling. Add to that customer demands for greater customization, and we’ve often got our reps dealing with more than they can handle.

The problem is selling large customized solutions complicates deal economics. Reps’ view of deal profitability is often shortsighted and doesn’t account for all variables and outcomes. Deals that on the surface looked profitable, end up as losses for your company in the long-term. And with most rep incentives skewed to gross revenue/volume metrics, reps focus more on closing opportunities quickly than ensuring long-term deal profitability.

It’s no surprise, then, that companies are considering establishing a new-in-kind function, Deal Desks, which is tasked with advising and supporting field sales on deal economics. A recent SEC Deal Desk Survey shows that 45% of surveyed companies have a deal desk function in place, while 35% plan to have one in the next 1–3 years. Of the companies that have a deal desk, 50% established one in the last 1–3 years.

But, while the need for them is clear, the survey shows deal desks are being tasked with a wide-range of responsibilities. Top in this list is to approve all deals with non-standard terms and conditions and establish price and portfolio discount planning for the sales organization (areas where reps unknowingly dilute deal profitability).

Other key responsibilities include working with cross-functional partners on deal execution, preparing and responding to RFPs, and structuring complex deals and providing negotiation support.

Of particular interest was how deal desk practitioners see their responsibilities changing in the near future. Many discussed the growing need for providing business intelligence to the field. As the market landscape gets more and more complex, the ability of deal desks to arm reps with timely information would become critical to securing business. Practitioners also highlighted bringing in greater task automation in areas such as RFPs, which would allow deal desks to focus on more strategic responsibilities, such as price management.

The bottom line? Early results from companies that have deal desks have shown improvement in their key sales metrics. The most prominent amongst these is an increase in deal profitability and a reduction in sales cycle time. So, in other words, with a deal desk your reps can get you more money in less amount of time.

For companies that have a deal desk in place, what has your experience been? Or, if your organization is considering setting up a deal desk function, what’s the business impetus to do so?

SEC Members, check out a replay of our recent webinar on Deal Desks or view the full findings from our recent survey.

One Response

  • Donal Daly says:

    This post is on the money – both figuratively and literally. Our experience of Deal Desks have proven to be extremely successful, both for ourselves, and for our customers. The Deal Desk is only part of the solution however, and should be considered just one important ingredient of embedding sales coaching in the DNA of the organization. When that happens tremendous sales velocity occurs. For customers of our who deployed our Sales Coaching Office, we have seen increase in average revenue of 40% across the sales organization.
    Per your comments, the Deal Desk is a critical component. The observation alone that accompanies the exercise heightens the individual’s performance. Vulnerabilities in deals are exposed to the benefit of the sales person, and the collective wisdom of the participants on the deal desk can, if well channeled, be used to find solutions to address those vulnerabilities. We’ve seen dramatic increases in win rate and average deal size, as well as a significant reduction in the sales cycle.
    ddaly@thetasgroup.com

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