As we get into Q4 (again? already?), it’s time to get your team into high gear. For many B2B businesses, Q4 is a stressful period where there’s no time to finish everything that’s on the agenda. But, if you’re prepared for it ahead of time, you’ll have a better chance of making things work in your favor.
The Pressure on Q4 Performance
A lot is riding on Q4 performance. B2B businesses are not usually affected by consumers’ holiday shopping, their B2B retail customers are. Therefore, the demands placed on your B2B business are usually higher during Q4, especially during November – December.
The entirety of Q4 can make a huge impact on a company’s bottom line for that year. As a B2B business, you need to be aware of how this quarter affects your business customers, especially if they are selling directly to consumers. In 2013, Pew Research compiled statistics from 20 of the top retail companies in the US. The data showed that these companies got an average of 30% of their annual sales during Q4.
With a high consumer spending boom predicted every year in Q4, pressure is put on all the supporting industries to make this last quarter profitable as well. With the rise in demand for retailers comes a rise in need for supporting services, such as your B2B business. This puts your company on a path that could lead to a profitable and successful quarter, but only if you plan ahead to make that a reality.
Why Is Q4 So Challenging?
All the fiscal quarters matter, but Q4 renewals hold a lot of significance for many companies. No matter which side of the table you’re on, Q4 does present a lot of unique challenges.
- It’s the shortest quarter
Technically speaking, Q4 is just as long as any other quarter. But, a lot more significant holidays fall within Q4, such as Thanksgiving, Christmas, and New Year’s. This leads many employees to take time off during November and December. A 2014 Namely study showed that the average employee requested time off twice as often in December as in any other month.
This means that fewer employees will be working throughout Q4, especially in December. You’ll need to get more accomplished in a shorter time frame than usual.
- Annual deadlines are closing in
Not all companies end their fiscal years in December, but many companies choose to do so in order to show strong end of the year results. If you’re facing your own company’s deadlines or your key account’s EOY deadlines, it can be difficult to take the necessary steps to reach annual goals.
- Planning for next year must begin
EOY is also the time you have to start thinking about next year and setting yourself up for success from the beginning. In the middle of trying to end the year well, you also have to take steps that will help you start your next year off properly.
Getting Ready for Q4
There’s a lot to do during the last quarter, so here’s a few suggestions to help you get ready for it:
- Know when your key accounts do their budgeting
You’re supposed to understand your key accounts very thoroughly. Understanding their budgeting timeline and when they manage their finances is vital for your maintaining and growth efforts. If you approach your key account near budget time, they’ll have a better chance of allocating a larger budget for your services or at least giving you an appropriate budgeting. Most companies do their annual budgeting at the EOY or beginning of their next fiscal year.
However, if you approach them after the budget is complete or in the middle of their budgeted year, you’re less likely to find success in growing your key accounts. At best, you might have to wait until budget season for approval from them. At worst, they will have forgotten you by the time the budget planning rolls around again. Do all of your key accounts consider your Q4 as their Q4? If they do, focus on them strongly to renew and grow. If not, you don’t need to pursue them as heavily yet.
- Communicate with key accounts about renewals
Renewal season can be tough on your company if you’re not sure what your key accounts are thinking about you. Ideally, you should know what they think of your partnership already. But, if you don’t, open a line of communication to find out if they’re happy with what you’re offering and plan to renew again. If they’re at all hesitant, you need to concentrate efforts on maintaining that account and showing your key account the benefits to them if they choose to renew.
- Renew efforts to upsell/cross-sell
It doesn’t make sense to beginning your efforts at upselling to your key accounts at the end of the year. But, if you’ve already approached them about it before, or if they’re shown any interest in growing their account with you, it’s time to redouble your efforts to make the growth happen. These latent opportunities are better leads than cold leads or newly started efforts, so it’s better to focus your energies on turning them into something useful instead of trying to create new opportunities.
- Keep QBR information up-to-date
You’ll be set to have another Quarterly Business Review (QBR) in Q4, so you need to be prepared for it. This EOY meeting may focus a lot more on goals and any progress that’s been made, so it’s vital that you have all the latest information ready to present to your key accounts. Being able to demonstrate the value of the partnership goes a long way in helping your key accounts make the decision to stick with you and continue working together.
- Set up important meetings early
Since most of the holidays and travel time fall around late November and mid-late December, it’s wise to set up your most important meetings well before these times. Start making calls and arrange meetings now, before your contacts get too swamped with other engagements or leave the office for a vacation.
- Look to the future
By October or November, you should already have sat down with your team and discussed goals for next year. When you start forming tentative goals early on, you’ll be able to lay the groundwork to get started on any changes that need to happen for those goal to be accomplished. If your new goals are larger than the current year’s goals, plan for how you’re going to make that increase happen, then you can start putting that plan into action as soon as Q1 begins.
Q4 doesn’t have the be stressful. If you’ve prepared for it well and you get your efforts started early, you’ll be reaching your goals by the end of the quarter and can kick back and enjoy your holidays in peace.