Improve Your Process to Maximize Your Revenue
When you’ve clearly defined you selling process, it’s easier to test ideas for improving results. For example, you can Identify spots where prospects get “stuck” in the process and try new materials or messages to help them move forward Measure how well different reps convert at each step and help those that aren’t doing as well See how leads from different marketing campaigns convert and improve your campaigns Create campaigns to “recycle” leads that fall out of the process at various spots This section provides tips to improve your process and results: How to minimize non-‐productive work and give your reps more selling time How to improve your conversion rates to dramatically impact results
Summary EXERCISE SUMMARY
When to Address
Who Should Participate Where to Use the Results
Anytime after your sales process and reports are in place and you need to improve results If you’re missing revenue targets Marketing and sales leaders Apply your results to your existing sales process and sales management.
Improving your sales process effectiveness is one of the quickest ways to increase Why it’s Important revenue. Increasing sales conversion rates from improving your sales process leads to What Builds Upon it increases in revenue and market share.
A few hours to a few weeks, depending on your situation
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Timeframe to Completion Potential Business Impact Deliverable Next Steps
Medium to high
You’ll determine any specific problems in your selling process and recommend solutions for improvement. It’s all about execution and continuing refinement and improvement
Target Completion Date
PARTICIPANTS TASKS
PERSON RESPONSIBLE
DUE DATE
Notes Sales Process Improve Your Process to Maximize Your Revenue
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Improve Your Process to Maximize Your Revenue
What to Complete
1. DIAGNOSE SALES PROCESS PROBLEMS 2. DETERMINE SOLUTIONS
Where it Fits in Sales Process Determine Your Current Selling Effectiveness Define Your Customers’ Buying Process Determine Sales Tools & Literature to Deliver at Each Step Define Measurement Criteria Determine Conversion Criteria Set Revenue and Customer Goals Calculate Pipeline Requirements to Meet Goals Determine Pipeline Data to Track Define Reporting Requirements Diagnose Sales Process Problems Determine Solutions Further Define Qualified Leads
1. DIAGNOSE SALES PROCESS PROBLEMS
Start out by reviewing sales process problems from a high-‐level. These issues take a long-‐term commitment to resolve. The rest of the exercise will address more tactical challenges. Here are three global reasons for sales process inefficiencies: WORTH PROBLEM POTENTIAL FIX EXPLORING? Poor quality of leads going into the You may need to modify your existing lead Yes sales process (either not ready to generation campaign, or create new campaigns Maybe start the process, or not likely to altogether. [Marketing Plan and/or Marketing No purchase your product/service) Campaign help]
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Poor execution of the steps of the process by reps Poor positioning, weak brand, poor pricing
You may need to retrain your sales reps, or get new reps. [Sales Management can help] You might have a great campaign generating great leads with great sales reps, but if your product, value and price aren’t properly aligned, leads will fall out of the process. [Competitive Positioning, Brand Strategy, Messaging, Sales Tools & Literature can help]
Yes Maybe No Yes Maybe No
Treat your sales process as a marketing campaign – review reports, try new programs and focus on continuous improvement. By doing so, you may be able to dramatically increase your revenue. Do you have any high-‐level problems to address? HIGH-‐LEVEL PROBLEM
ACTIVITY TO ADDRESS
Now let’s review some common tactical sales problems. Likely Problem Problem Suggestions Area You’re losing more Process You’re probably not providing the right prospects at a particular message and information at that stage. stage than you think you Or the message and information that should you’re providing doesn’t match what the prospect expects. Reps The reps probably aren’t providing information, answering questions sufficiently and/or engaging prospects to move to the next step.
Sales Process Improve Your Process to Maximize Your Revenue
Worth exploring?
Yes Maybe No
Yes Maybe No
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Prospects are stuck
Process
at a specific stage
Reps
Prospects aren’t moving fast enough through the pipeline
Process
Reps
Prospects are
Process
moving too quickly through stages (or entire pipeline) Reps
You’re probably not providing the right message and information at that stage. Or the message and information that you’re providing doesn’t match with what the prospect is expecting. Your reps probably aren’t asking enough questions to overcome objections and move the prospect to the next stage. There might be too many steps in the process. Or the sales tools and/or literature might not be at the right place in the process. Or the tools/literature might not help to move the prospects forward. The reps may not be assertive enough to present the material then overcome objections to move to the next step. The process may not be addressing prospects’ needs at each step in enough detail. Or there are steps missing from the process. The reps are probably glossing over the steps and not asking the right questions
Yes Maybe No
Yes Maybe No Yes Maybe No
Yes Maybe No Yes Maybe No Yes Maybe No
Do you have any tactical problems to address? TACTICAL PROBLEM
ACTIVITY TO ADDRESS
2. DETERMINE SOLUTIONS After you’ve listed your sales process problems, review the below solutions and select solutions that will address your challenge. Sales Process Improve Your Process to Maximize Your Revenue
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2.1. GIVE YOUR REPS MORE SELLING TIME The more time your sales team has to sell, the better their results will be. If you can improve their efficiency, you should be able to increase your revenue with little or no investment or effort. Use 85-‐D to estimate where your reps are spending their time. You’ll be able to estimate figures such as Number of hours per week spent actively prospecting Number of hours actively selling Number of hours spent on administrative tasks You can see how much revenue your company can generate by giving your reps additional selling time. How can you give your reps more selling time?
PROCESS IMPROVEMENTS
Use/hire an administrative person to send out
information, manage schedules, arrange travel, fill out expense reports, etc. Use a central person to write proposals and quotes Hire a telesales rep and centralize the cold-‐calling activity so that your experienced reps focus on active selling to qualified prospects Pre-‐package any printed fulfillment pieces so that sales reps aren’t assembling them Use a CRM system that minimizes their need to enter data and sets up reminders for tasks Use a CRM system to generate prospect reports rather than having reps fill out forms, produce memos, etc.
FEASIBLE?
ACTION PLAN IDEA
Sales Process Improve Your Process to Maximize Your Revenue
PERSON RESPONSIBLE
DUE DATE
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2.2. IMPROVE CONVERSION RATES
We’ll use the term sales funnel to describe your pipeline – it looks like a funnel with a lot of leads at the top and a smaller group of customers at the bottom. Typically the easiest way to increase revenue is to reduce the “leakage” from your sales funnel, or, put differently, convert one more lead from a prospect to a customer. For example, if it takes 100 leads to generate one new customer), you have a 1% close rate and 99% leakage. If you want to generate one more customer you could: 1. Find another 100 leads and close one of them, OR 2. Reduce your leakage by 1% to generate one additional customer. Option 2 is almost always the easier and more profitable option. Use 85-‐E to see how many leads will leak after each step if you’re hitting your goals each month. The sheet will ask you to think about two subjects: 1. How can you reduce the leakage rate after this step? 2. For those leads that do leak, how can you recycle them? (Continue marketing to them until they’re ready!) IDEAS FOR REDUCING LEAKAGE
NOTES
Talk to your sales reps and get their feedback about
why prospects are falling out and what can be done to keep them active Ask prospects who did not move forward: what could we have done better? Re-‐examine the process: Have you accurately identified the prospects’ true needs at each step, and do your materials and tools move them forward as needed? Look at leakage rate by sales rep. Some reps may be pushing prospects too quickly, skipping over necessary steps in a desire to close business
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IDEAS FOR REDUCING LEAKAGE
NOTES
Evaluate sales reps skills. Coaching may help them to
Evaluate the quality of the prospects entering your pipeline. If you can improve your targeting, you can improve your close rates. Your reps may not be “asking for the order” after each step – they may be too passive rather than guiding the prospect to a buying decision. Evaluate your timing: Are you starting to talk with prospects too early or too late? Modify your lead generation activities accordingly. improve their close ratio at each step. [Sales Management can help]
IDEAS FOR RECYCLING PROSPECTS
Make sure you understand why they fell out in the first place. If they just weren’t ready to buy, or their pain wasn’t great enough, identify when they are likely to want to re-‐engage and make sure the prospect is kept warm until that point. Ask their permission to send email newsletters for educational purposes. Send a newsletter once a month; the more customized it is to their particular stage, the better you will do in keeping them engaged. Schedule a follow up call every X months (ask the prospect what is OK). Define a specific purpose for every callback – convey news, answer a question, etc. – and capture any new information about the prospect. Your contact may not be the true decision-‐maker. Have your team scout elsewhere in the company if needed.
NOTES
RECOMMENDATIONS & ACTION PLAN Ideas for improving the conversion rate for specific buying steps:
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Step in sales process Current conversion rate to next step GOAL conversion rate
Ideas for reaching this goal
PERSON RESPONSIBLE
NEXT STEPS
DUE DATE
2.3. IDENTIFY THE HIGHEST QUALITY LEADS By tracking the source of each lead, you can measure the close ratio by source then invest in programs that produce more leads from the highest-‐converting sources. For example, if 5% of the leads you generate through trade shows convert and 50% of the leads you generate through referrals convert, focus more resources on generating referrals. (Of course, you’ll also want to consider the cost of marketing to each source and the revenue potential; use the ROI section to guide you in more detail.) LEAD SOURCE
CONVERSION RATE
NEXT STEPS
2.4. ADD MORE LEADS TO THE PIPELINE
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If you close 10 customers for every 100 prospects, then an additional 100 prospects should produce 10 more customers. If your sales reps are responsible for producing their own leads, consider launching very targeted marketing campaigns to generate more prospects more quickly. [Marketing Campaigns and Marketing Plan can help] Annual Revenue from new accounts Revenue/account/year # of new accounts needed Prospect Buying # accounts # accounts # accounts Steps (reverse Conversion rate needed needed annually needed quarterly order) monthly Total # of leads to be added to pipeline
2.5. SPEED UP OR IMPROVE THE SALES PROCESS
You can increase your revenue by measuring the time your accounts spend at each step of the process and then shortening that time if possible. You can also try to minimize logjams where prospects seem to sit for a long time with little activity. Example: If a prospect spends two weeks at each step of a 13-‐step process, it will take 26 weeks to become a customer. If you can help that prospect by delivering the information and tools they need to move forward in just one week rather than two, it will only take 13 weeks to close a deal. As a result, you’ll have the capacity to increase your sales by 100% over the same six-‐month period. Example: If prospects spend too much time at a particular step, you may have a glitch in your process or materials. For example, if prospects move quickly through steps 1-‐3 but disappear at 4, then the tools used may be ineffective, and/or the message sent at that stage may not resonate. It’s a mix between a science and an art; you’ll need numbers and input from your team to help you identify the problems and fix them.
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2.6. REVISE OR REORDER THE SALES TOOLS & LITERATURE DELIVERED If prospects are stuck in the pipeline or falling out, ineffective or improperly-‐used sales tools & literature might be the cause. Examples: A sales rep delivers a competitor price comparison table to prospects that are early in the process just wanting to learn about your offering The product demo is ineffective and doesn’t display the product’s greatest value Review your tools, observe how your reps are using them, and review each with an independent eye to judge their effectiveness. IS IT IN THE IS IT TOOL PROCES STEP COMMENTS RIGHT STEP? EFFECTIVE?
2.7. TRAIN YOUR REPS
This is a pretty obvious result, but make sure to understand what specific training the reps need before starting. SALES PROCESS STEP WITH PROBLEM [Sales Management can help]
LIKELY ISSUE
TRAINING DESIRED
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Improve Your Process to Maximize Your Revenue
Report
1. OUR SALES PROCESS PROBLEMS 2. SOLUTIONS This report summarizes our results from completing Exercise 84 – Competitive Positioning: Improve Your Sales Process.
1. OUR SALES PROCESS PROBLEMS
After reviewing our sales process, we’ve found the following challenges to address: PROBLEM
STEP IN PROCESS
STRATEGIC OR TACTICAL?
2. SOLUTIONS We’re going to implement the following solutions to resolve our sales process problems: SOLUTION
PROBLEM IT RESOLVES
NOTES
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SOLUTION
PROBLEM IT RESOLVES
NOTES
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