5 Steps To Speeding Up And Increasing Sales
Originally published: 11.01.11 by Geoffrey James
A geometric approach results in more closes with the same amount of work.
Sales pipelines are like compound interest. Small increases in efficiency, applied simultaneously at different points in the sales cycle, result in geometric increases in final sales results. Here are five easy steps (courtesy of Donal Daly, CEO of The TAS Group) to exponentially higher sales revenue:
Step 1: Increase the average quality of the leads.
The Concept: If you’re calling on the wrong people, you’re spending time on “opportunities” that never had a chance. If your leads are higher quality, you’re less likely to be calling on the wrong people.
The Challenge: A high-quality lead, by definition, is one that’s highly likely to become a customer. Come up with a specific definition of what constitutes a high-quality lead for your offering, and then get the marketing organizations focused on finding more of them.
The Follow-Through: Commit to keeping your customer database current and accurate. Tracking the success of your sales efforts can provide a treasure-trove of data defining how effective you’ve been when selling to different types of customers.
Step 2: Decrease the percentage of false opportunities.
The Concept: Even if you’re calling on high-quality leads, a certain percentage of them won’t be potential prospects, usually because they don’t really have a need for your offering, or
The Challenge: Realign your thinking so that your initial conversations with a sales leads are not for the purpose of selling, but rather to identify which leads are most likely to become customers — and which are least likely.
The Follow-Through: Treat the elimination of a lead from your list as much a victory as the conversion of the lead into a real prospect. Celebrate the winnowing process as much as when you find a real prospect.
Step 3: Increase your average competitive close rate.
The Concept: Even if you’re calling on the right people, if you do or say the wrong things to those people, you’ll spend time and money on opportunities that don’t pay off.
The Challenge: The most frequent reason sales reps are outsold is that they failed to completely understand the actually process by which the decision would be made, and who would play what role in that decision-making process.
The Follow-Through: Selling against competitors means constantly differentiating your offering so that it fits the prospect’s need better. Research the prospect’s business and the competitor’s strengths and weaknesses versus your own.
Step 4: Increase the average dollar value of each sale.
The Concept: There is a fixed amount of time and resources connected to every sales effort. While it may take more effort to cut a $1 million deal, it’s usually not nearly 10 times as much as effort as cutting a $100,000 deal.
The Challenge: Give each account your full attention, and spending enough time on it to be able to uncover the full opportunity. This will be easier to do because if you’re implementing the three steps above, you’ll be selling to fewer prospects.
The Follow-Through: Use discounts sparingly. Discounts offered merely to secure the sale, not only could make the current deal smaller, but (if publicized) could result in discounts (and smaller deals) from future customers.
Step 5: Decrease the average sales cycle time.
The Concept: The more time that you spend on an opportunity, the less time you have to spend on other opportunities. There are two types of “time,” though: 1) elapsed time that it takes to move a prospect from initial contact to closing the deal, and 2) the work hours that you actually spend on that opportunity.
The Challenge: In most cases, the customer already has a time frame in which they intend to buy. Therefore, it’s work hours spent on each deal that’s important, since elapsed time is out of your control.
The Follow-Through: Find out the customer’s buying cycle, then schedule your activities backwards from that event, so that you spend the right amount of time (neither more nor less) developing the opportunity.
Here’s how these five steps geometrically increase sales.
Suppose you spend one day prospecting and four days selling, which results in 10 prospects. Two turn into customers by the end of the week. Each of those two customers spends $10,000 each, so you booked $20,000 that week.
Now suppose you implement the changes above. Your one-day-a-week of prospecting still results in 10 prospects, but they’re all highly qualified. Because you’re spending less time on each customer, you spend 1/2 day each, to close six customers at an average of $15,000. You just booked $90,000 — for the same amount of time and effort!
Geoffrey James is the author of several books, hundreds of business articles, and currently writes the popular Sales Machine blog on CBS Interactive’s BNET website.
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5 Steps To Speeding Up And Increasing Sales
This 5 step geometric approach results in more closes with the same amount of work.