You don’t send a proposal to a new lead you’ve never talked to right? You wouldn’t try to schedule a presentation with a company that just signed a multi-year contract with your competition either. Some things in selling are obvious. Many more are not. In fact they can be completely counter-intuitive.
Are you using a shot gun approach to selling? If a lead can fog a mirror, does your team run after him with all the artillery they’ve got?
In the first installment of our “Double Your Sales in 2009”, we discussed the art of knowing the difference between a lead and a truly qualified prospect that is worthy of your sales time. Click here to read “Qualify Early and Often”.
Tire Kicker
Of course, the reason that knowing a “tire kicker” lead from someone who has a need and budget for your solution gives you the ability to focus your efforts in the right places and should lead to higher close rates and bigger deals. Plus, your sales team can manage a larger pipeline with better opportunities since they’re not wasting time chasing bad leads. Talk about improving the bottom line!
Clearly, the challenge is that it’s not always as simple as deciding that a lead is a qualified prospect and then breaking out your shot gun.
Like in any sales organization, your sales people probably spend too much time in the beginning stages of the selling process. Don’t believe me? Take 30 days and track what they do and how much they spend on various activities. It might look something like this for a week:
Cold Calling or Initial Response to New Leads – 8 hours
Interviewing the Lead to Understand Needs – 8 hours
Phone/Email Work to Schedule Presentations – 6 hours
Preparation of Proposal – 8 hours
Phone/Email Work to Schedule Negotiation Meetings – 4 hours
Additional Rounds of Meetings for Presentations and Negotiations – 4 hours
Of course, we’d all love to have so many hot deals in final negotiations that things flip over. The thing is that there is a cause and effect relationship here that is not always obvious.
Here’s an example… Many companies use some sort of presentation as a “hook” early in the process. A new lead comes in and the sales rep’s primary goal is to get the lead to see the presentation so that they’ll get excited about your solution and company. The problem is that this is very time consuming and doesn’t always work. In fact in most companies, only 10 or 20% of these presentations lead to closed sales. At that rate, they HAVE to be focused on doing presentations shotgun style in order to get one or two that actually buy.
By making sure your prospects are truly qualified before you do the presentation, it frees up a bunch of time for the sales rep. It also allows the rep to focus more on prospect’s needs and strengthen those relationships. And, when your reps do make a presentation it’s much more targeted and ultimately they’ll win more deals.
Calculate the Cost & Return of Your Sales Activities
What if you took your list of sales activities and asked yourself what information about the customer or “qualifying characteristics” do you need to see in order to effectively take that next step?
Every discrete step in your sales process requires time that you can never get back, and generates some sort of return, sometimes big, sometimes small.
Ultimately, your customer will work out his own unique way of quantifying the benefits they’ll expect to receive from the purchase. The trick is for you and your sales team to begin doing the same thing. At each step in the process, ask yourself “Is my investment of time and money in this activity likely to pay off for me?” Example: If the decision maker cannot attend the presentation, then you hold off until he can.
Here is road map that I’ve used successfully myself and with my clients that may help you start to think along these lines…-
- List the most common business benefits that motivate your customers to purchase from you.
- For each of these potential benefits, imagine how the customer would expect to see that improve his bottom line.
- Establish a “typical” calculation that the customer could use to estimate the ROI for purchasing your product solely to reach that one business benefit. An example of this follows.
- Create questionnaires for your sales team to use to get the facts in order to make this calculation for each of these potential benefits
- Create a simple spreadsheet that let’s your rep run this calculation quickly and easily for the customer.
- Calculate the minimum thresholds your customer must meet in order to make the ROI workout well. This will allow you to draw a box around the type of customer that is really a fit for your company, so you can focus on the right ones.
- Develop presentations and proposals that take advantage of this information.
- Train your sales people to talk about “typical” ROI experienced by other customers early in the process. This becomes the “hook” that your presentation previously provided.
- Identify the most time consuming and expensive steps in your process.
- Reorder the steps so that these costly things happen only when the benefits the customer will experience have been identified and the ROI for each calculated.
Hey, no one said this was going to be easy! But like anything, just start and take one step at time. It will get easier as you go. You could probably spend a couple of Saturday’s on this and have it down.
Getting Your Sales People to Change Their Ways
Sales people can be stubborn and you’ll need them to buy in and believe. It’s probably not a bad idea to take a couple of key prospects and lead by example.
One of the fundamental and very counter-intuitive techniques you’ll need to employ is to learn to establish a different kind of rapport with the prospect up front. You’re more of a business consultant when you sell this way. Your sales team may currently be more like “chasers”. They chase the prospect and essentially beg them to take the next step in the process.
I’ve found that it helps to explain the process to the lead right up front so that they’ll know immediately that they’re not dealing with a typical sales rep. Here’s an example: “I know your time is valuable and so is mine. Our solutions typically deliver an increase of x% in whatever your solution impacts for most customers. Would that type of improvement be considered significant in your organization? The companies that see this type of improvement typically fit into a certain profile. In order to be sure that neither of us is wasting our time, do you mind if I take 5 minutes of your time to ask you a few questions to determine if our solution is likely to make good sense for your business? If you’re willing to provide a few details about your business, I’ll be able to show you a specific estimate of the return you should expect from our solution. Would that be worth your time?”
Your customers are hearing the same old Sales 101 pitches from your competition. If you open up with a version of the approach above, you are immediately in a class by yourself!
Making It Stick
The final piece of this puzzle is to hold your sales team accountable. You need to know whether the presentations and proposals and meetings they’re spending time on have been cost justified by the type of analysis we’re talking about. Have them turn in the ROI calculations for each prospect they spend time on every week. No doubt they’ll try to find excuses for rushing ahead with time consuming presentations, etc. It will take time but, if you’re consistent in drawing the line, they’ll get the idea.
In fact, that very subject is up next in our “Double Your Sales in 2009” series – “How to measure qualified prospects and whether the right sales actions are taking place at the right time”. It’ll be available here on February 9. Don’t forget to register to receive the entire “Double Your Sales in 2009” series as an e-Book here.