This is the first installment in a 5 part series we’ll be releasing each Monday, through February – “Double Your Sales in 2009”! We’ve identified a series of 5 simple and inexpensive steps any business can take to super charge their sales engine quickly. In this series we’ll highlight each step in the process one at a time. You can learn more about upcoming steps in the series and register to receive the entire series as one short and to the point e-Book here.
Qualify Early and Often, Part 1 of Double Your Sales in 2009
- How not knowing the difference between a lead and a qualified prospect is costing you big bucks!
- Free up days and days for your sales team to focus on their best prospects and clients.
- Improve your bottom line immediately!
Your sales people’s time is valuable. You’ve probably have hired sales assistants to take paper work and other stuff off your sales staff’s plate. Because you want to help them focus their time on what? Selling of course! Working with customers, whether on the phone or in person, is where you want their time spent.
But its not that simple. If you’re in the food service business and I gave you a list of Realtors to call on, would you want your sales reps spending their time on the phone and meeting with those Realtors? Of course not.
To really super charge your sales performance, you have to take a close look at WHO your team is spending their time on. Don’t worry, this is not a sales pitch for changing your lead generation. This is much simpler than that.
The fact is that virtually every sales person spends too much time on leads that are not at all likely to purchase. They just don’t know how to tell the difference.
Qualifying leads is not a new concept. You’ve probably already spent a lot of time preaching to your team about it. But can you say that your team is good at qualifying leads? How many of your proposals go know where? How many of the face to face presentations your team gives lead to a long series of put-offs and no sale?
Why does this matter? Because just like you wouldn’t want your sales team wasting time with paper work and administrative tasks, you also don’t want to waste their valuable selling time on leads that aren’t going to buy! The key is to know the difference – QUALIFYING.
If you qualify well, or better said, qualify accurately and do it up front, as a first step in your sales process, then you can minimize the time your team spends on leads that won’t buy and maximize the time they spend on leads that will.
So first let’s consider how big an impact better qualifying could have on your business first. Here are a few questions you’ll need to know the answer to:
- What are the crucial steps in the sales process? Examples – Set appointment, presentation, proposal, close
- How much time is typically spent on each step?
- How many new leads or prospects does each rep typically go through this process with in a given period (week, month, quarter..)?
- How many of them buy?
If you don’t have this information, ask your team to start making a list of every presentation, proposal, etc. that they do for about twice the length of your typical sales cycle. Then just crunch the numbers.
Here’s an example:
Let’s say a sales person typically works with 50 new leads each month and each decent lead typically gets a 30 minute phone call, a one hour presentation and a proposal that requires 30 minutes to create. Add to that all the calls and emails that go into coordinating meeting times and following up, trying to close and you’re easily up to 3 hours per lead or 150 hours per month. We’ll assume that you have a 20 % overall close rate so, that means 10 out of 50 leads buy. So it takes 15 (150 divided by 10) hours of sales time to get a purchase.
So, 80% of the folks that your team spends all this time on don’t buy. That’s 40 leads getting 3 hours each or 120 hours of sales time spent on leads for no return, every month. What if you just started asking the right questions up front and decided not to go on appointments until you get the right answers or at least to hold off on the presentation and proposal? Imagine that you could filter out 20% of the leads up front with a solid, simple series of questions that you use as the “bar” that leads have to get over before they “earn” your sales team’s expensive time?
Now, 20% of 50 leads is 10 leads x 3 hours amounts to 30 hours freed up each month! That’s almost a week of each sales person’s time! Obviously that’s significant. It lowers the time spent per sale from 15 hours to 12 hours. That can’t help but improve your bottom line!
We’ll focus on this specifically later in our “Double Your Sales in 2009” series but, clearly the real win is in what your sales team does with this freed up time.
But first, how can we teach your existing team to ask the right questions up front and refrain from delivering time consuming and expensive presentations and proposals to leads that don’t past the test? The good news is that its not really that hard to do. The hard part is being consistent. Its easy to “fall in love” with a lead. They have a way of telling you what you want to hear. Its up to you to hold your team accountable. When they fall in love with the wrong leads, it costs you and them money.
Here’s how we do it:
We decide upon a set of questions that must be asked of every lead and the answers that are “qualified answers”.
Some are obvious like “Are you the decision maker?”, etc. In fact that is the most important and most often neglected question. Its easy to excuse the sales team. They’ll say “We can’t get in to see the CEO initially. We have to start with someone else and earn their trust so that they’ll help us get the CEO’s attention. Maybe so but, a staff engineer is not the decision maker. If you haven’t spoken with the decision maker, then there are many things you should be very careful about delivering during the sales process.
One way to identify these questions is to look at your customers. What do they have in common? Maybe they’re in a certain industry or region. Maybe they’re of a certain size. Maybe they all shared a similar challenge when they purchased from your business. When I talk to clients, I like to ask them “What are the 5 or 10 questions you ask every new lead?”.
Once you’ve identified the questions, you’ll need to work on responding to the lead’s questions and requests when they aren’t giving you the answers you want. Develop low cost, simple ways for your team to give the lead a data sheet or brochure or price list that answers most of their questions. Most importantly, you’ll need to teach your sales team to say NO. The lead thinks she’s qualified. She’s going to ask “Can you send me a proposal?”, “Can you come in for a demonstration?” and you’ll need to break some bad habits. Most sales people see it as their role to please the customer. Its tough for them to say no.
Of course, there are “softer” ways to say no. The best thing you can say is something like “Before I waste your time on a presentation, I’d like to find out more about your needs to be sure we’re going to be able to help.” Most importantly, you’ll need a strategy to respond to these requests from leads that aren’t decision makers. “Who will make the final decision on this purchase?”, “Before I waste your time on a presentation, can we arrange to meet with the CEO to understand their needs?”, etc.
There will be a period of trying things, learning and adjusting but, if you start trying, you’ll get better and better at it. The absolute most important step is to hold everyone accountable. Ask sales reps about the presentations and proposals they produced recently and ask them the qualifying questions. When they don’t have the right answers, tell them so. Keep a record of business trips, presentations, proposals, etc. done by each rep and sit down with them and decide which were really qualified and which weren’t. Remember, we’re talking about freeing up 1/4, 1/3, maybe even 1/2 of their time to focus on closing the best prospects and finding more prospects like them. This is in everyone’s best interest.
As I write this I realize it probably doesn’t sound simple or easy. I think its like taking the training wheels off your bike when you were a kid, once you get the hang of it, you can’t believe you didn’t try it sooner.
Up next in our “Double Your Sales in 2009” series is “How to Time Your Sales Efforts So Leads and Prospects Get What They Need”. It’ll be available here on February 1. Don’t forget to register to receive the entire “Double Your Sales in 2009” series as an e-Book here.