Entries Tagged 'Sales' ↓

One of our sales people recently had 4 out of 6 deals fall apart. What concerns me most is that she had put a very high close ratio on all 6 – she estimated that each had an 80% or better chance of closing. I know that her closing percentage estimate is a gut – it’s subjective. How can I help her get a more accurate picture of what’s likely to happen?

Top Thoughts: Sales people often focus on what seems hot today, regardless of the real probability of closing. Getting prospects to close is not an event, but a process – a series of steps that need to be tackled in the right order. Building an accurate sales forecast system will help both sales and management better understand and deal with the challenges they face.

An active prospect, saying what seems like the right things, can easily be mis- interpreted as a sale that’s ready to happen. Sales people can be overly enthusiastic about what they’re working on, and have blind spots about reality. Maybe the prospect was ready to close, maybe it wasn’t. Either way, the forecast of 80% x 6 prospects means that 4 – 5 out of 6 should have closed. In this case, only 2 out 6, or 33%, actually ended up closing. A big gap.

Who cares? Management and the sales person should both care. Management needs actionable, accurate information with which to plan. Sales people need to know what they can count on to close, and where they’re getting tripped up.

It would help both management and the sales person to look at the steps a prospect goes through. Classic sales stages include information gathering, agree on needs, negotiate price, confirm solutions via proposal, negotiate contract. Have a couple brainstorming sessions to figure out the typical path a prospect follows. Build a checklist to use for each sales stage, to verify that everything appropriate to that stage gets covered and checked off.

Think of the sales funnel as a weeding process. As prospects move from one stage to the next, the goal is to focus on those prospects most likely to close, eliminate those that are unlikely to close, and set up a nurturing process for those that could close but aren’t ready. Mistaking so many accounts as highly likely to close (80% or better shot of closing), and they don’t close, means that the sales person is missing something in the weeding in / weeding out process.

Assign probabilities to each sales stage, based on historical averages. For instance, if typically 2 out 10 prospects that complete stage 1 end up closing, put a 20% close ratio on all prospects at the end of stage 1. If the chances increase to 4 out of 10 closing when the prospect completes stage 2, assign a 40% close ratio at the end of stage 2. And so on.

Sales people will get a lot of benefit out of learning to forecast accurately. No good sales person wants to miss out on exceeding quota and cashing commission checks. Help them build a fact based way to assess where they stand.

The sales funnel can also be used to identify training needs. When closes fail to happen, often there’s a pattern – something that gets skipped, or a stall that happens regularly. In this sales person’s case, we found that she missed a crucial step about half way through every sale. We isolated the problem and helped her understand how to keep it from cropping up in the future. Her forecasts are becoming more accurate, and she’s closer to hitting her goals.

When sales management and sales people can agree that the sales forecast is accurate, trust goes up. Confidence increases when both are on the same page. And management can proceed with decisions based on knowing where the company’s growth is coming from, and what else, if anything, needs to be done in order to make plan for the month, quarter, or year.

Looking for a good book? Quotas & Compensation: Pinpoint Sales Management Skill Development Training Series, by Timothy F. Bednarz.

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We haven’t given door knocking a good enough try. We’re working in local neighborhoods all the time,  but no one knows we’re there other than our customer. I’m sure other people near-by might be interested in the work we’re doing, but I don’t want to be intrusive. What suggestions do you  have for getting the word out that we’re around and ready to help.

Top thoughts: Look successful in order to boost prospects’ willingness to open the door. Make prospects aware of your company. Have a powerful message to share once the door is opened. Be sure your sales force is ready to engage.

There are many ways to make suspects aware you’re in the neighborhood. Some can be handled by your field crews. Some require the skills of your sales force. Let’s start with your field crews.

The people out in the field are the number one representation of your company – how do they come across? Would you want this company to park it’s truck in your driveway? Would you want these people in your home or place of business?

Too many times I hear business owners say they can’t let go of a top technician, no matter how many times that person disregards basic rules of human engagement, shows up late, leaves a mess in the truck or, even worse, the clients’ workspace. Consider this. What you, as owner, tolerates, becomes the standard for the company.

Have maximum positive impact on your customers as well as suspects and prospects. Make sure everyone in your company is well turned out, approachable, willing and able to help. Make sure the impression they give leads to good will and an invitation to stay and engage in the neighborhood.

Give your field crews tools that help them to make a positive impact. Consider customer service training, uniforms, handouts that tell a story. Explain their role in building neighborhood good will, and in gathering prospects for future work.

Hand out fliers that notify the neighborhood your company will be in the area. Invite people to contact the office if they have questions. If appropriate, put out street signs with the company’s name and phone number.

All of the marketing effort in the world, getting potential prospects to pay attention to your company and your offers, can go for naught without follow up. Someone has to reach across the gap between marketing and sales. Assign sales people to canvass an area in which your company has just worked.

Check in the with the customer to ensure that all work was completed satisfactorily. Ask to use the customer’s name as a reference. Then call on others in the neighborhood to tell your company’s story and inquire about needs.

As doors are opened, your sales people have 30 seconds to make an impact, leading to an invitation to explore further opportunity or a “no thank you, not interested.” Help your sales people craft a powerful story about your company and its’ work. Make sure it’s a compelling statement that fits your company – ask your customers to give you feedback on how they’d react if you knocked on their door.

Have the same standards for sales as you do for the field – clean, neat, polite, respectful. Find out if the prospect has time to talk, or not. Suggest a follow up if the prospect if busy. Offer a leave behind, and have a follow up routine.

If the prospect is willing to engage right then, be prepared to ask questions that help qualify the need and fit. Figure out how to quickly recognize a good prospect, and rule out ones that don’t fit. Treat both with respect, no matter what.

Expect your sales people to report back on canvassing results. Get a door-by-door report. Record results in a follow up system, noting which doors are hot leads, which need follow up later.

Looking for a good book? Power Prospecting: Cold Calling Strategies For Modern Day Sales People – Build a B2B Pipeline. Teloprospecting, Lead Generation, Referrals, Executive Networking. Improve Selling Skills. By Patrick Henry Hansen.

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I’ve been told we have to find opportunity to increase our service agreement business. Is it good business? Up to now we’ve just taken what comes in the door. How important is it?

Service agreement business is very important to the success of many businesses. It factors into sale value. It indicates the business’ services are healthy and well received by the marketplace. If priced right, it can generate reliable revenue and profits year in and year out. Getting more is a sales and customer service game, pure and simple.

Many businesses have significant opportunity to pick up ongoing revenue by focusing on selling and properly handling service agreements. Companies with regular demand for their services can offer their clients agreements that tie the clients to the company. They do this by offering to provide regularly recurring service in exchange for a fee, either paid upfront, or paid in quarterly or annual installments.

If a company can show a significant base of service contracts, that will boost the eventual sale value of the business. Banks will often take note of service contract revenue – which is different from service revenue. Service revenue is an indicator of a stable, continuing, trust relationship between client and company. It’s also a steady stream of revenue that the company can count on.

If clients are confident enough in the services provided by the company, they will agree to contract to do business with the company for more than an as-need basis. The advantage to clients is often a discount on additional services – known as a preferred customer rate, priority with scheduling, and / or advance notice of upcoming opportunities.

The advantage to the company offering the service agreement is that it locks up customers for periods of time – typically a year or more. It can focus on customers who have already bought into the value it provides. And the company can use a standard service agreement contract as a way to sell more clients on shifting from emergency based calls to steady, planned service calls. Reducing emergencies can free up the cue of calls a company has to handle at the last minute – which are often the most expensive to provide.

Properly pricing service agreements is essential. The contract typically will contain a standard set of services that are provided, and for which the company clearly understands its costs. Additional repair services and parts are usually on an as need basis, not factored into the service agreement.

Many companies will offer to fix the cost of service labor for a period of time – since they have the most control over that. Fixing parts is a dangerous way to go, as prices from vendors may suddenly escalate. If you want to offer an advantage related to prices or services you acquire from vendors, either ask the vendor for a fixed price contract, or offer the client a preferred rate subject to availability.

Getting more service contracts is a sales and customer service job. Figure out who are your best customers, and start with them. Make calls and send letters offering them a service contract. Define the advantages they will receive. If you’re not sure what advantages to promote, talk to a few of your best customers to ask them what they value the most about service availability and price.

Once your best customers are on board, use them as references to pull in more of the general customer base. Offer service contracts to your entire population, including a way to sign up on-line, by phone, or by snail-mail (yes, some people still use it).  Once sign-ups slow down, print out a list of all customers, figure out which customers don’t have service agreements, and focus on getting them on board. Finally, put a standard service agreement in every new sale package, and try to get the agreement signed upfront.

Not sure how to price a service agreement? Not sure how to offer one to the marketplace? Not sure what to offer, and what to steer clear of? Get Help! There’s gold in that opportunity!

Looking for a good book? The Art of Profitability, by Adrian Slywotzky.

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I have a few issues in sales. We spend time on low-percent prospects. It feels like we’re getting the brush off. It all comes down to this question: Why do folks have us come to give them an estimate and not do the work with us? 

Reduce the frustration associated with selling by qualifying prospects early on. Use an upfront agreement to clarify how things will proceed. Talk with decision makers. Write proposals only when it’s clear there’s a deal on the table. Know when to move on.

Have checklist of questions to use, to verify someone’s interest level:

• what is it, exactly that you’re looking for
• do you have a budget and a timeframe
• where else do you intent to look
• what’s your final decision making process, and who will be involved
• how bad would it be if you ended up not solving the problem

These questions show an interest in getting to know the prospect. They help shape decisions about the amount of time and effort to focus on this potential sale.

Do sales people tell their prospects it’s okay to say, “no”? If they don’t, they should. Offering to let someone off the hook is an effective way to qualify their level of interest. Trying to hang on to a window shopper who has no intention of buying is usually a waste of time. Sort that out early.

It’s also okay to say something along the lines of, “Even though you’re not ready to buy, I’ll help you with information now. I ask that you realize I get paid for my time by eventually making a sale. In exchange for me spending time with you now, I’m asking that you’ll come back to me when you’re ready to make a purchase. Is that fair?” Be respectful, and demand respect.

Start the sales process with an upfront agreement as to the sales steps involved. Suggest the steps your company typically goes through, from introduction to sale. Ask the prospect if that seems like a reasonable process. Find out what will work for your prospect, and decide if that process will work for your company.

Doing everything possible to put the odds in your company’s favor is what sales is all about. Ask who else the prospect plans to look at; know the caliber of company you’ll be competing with. Ask for a list of issues and concerns related to your company’s offer, and time to address those concerns. Ask to go last when making a presentation so you can hear about and address any ideas that came up last minute.

Teach all team members to talk to decisions makers before writing proposals. Entre to the final decision makers and influencers can increase chances for working through issues and conflicts. Continually assess the strength of the relationship between your company and your prospects’ by building a broad set of connections.

Write proposals late in the game, as confirmation of what’s been discussed. Focus first on gathering information and discussing options. Before putting offers in writing, review with the prospect what you’re planning to recommend. Check if you’re on the right track, or not.

Regularly ask how your recommendations are perceived. Ask for the sale, but don’t be afraid to hear you’re not getting the deal. A good sales person always wants to know where they stand. Information, no matter how negative, is valuable.

Encourage sales people to live in the land of reality, rather than the land of hope. They’re not going to get every deal. Establish a reasonable closing ratio. If typically 1 deal in 3 goes in your favor, figure out how to identify the 2 that aren’t going to close, fight for the chance to turn things around, then politely cut your losses and move on.

Focus on the high outcome situations. Use valuable selling time to find more of the same. Ask all prospects if they can make referrals to others who might be interested. Deal with prospects with respect and professionalism, and you’ll likely pick up leads to other opportunities.

Looking for a good book? Make Winning a Habit: 20 Best Practices of the World’s Greatest Sales Forces, by Rick Page.

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We have several teams in our company. Each team leader is responsible for bringing in business for their team. Each team does its own lead follow up. Most of us don’t put much information about sales activity down on paper. Every once in awhile we cross paths with the same leads. Last week we had a discussion about where everybody was, and what to expect for the rest of the year. Some people didn’t have as much in their forecasts as we all expected. I think things have to improve, but I’m not sure how to do it. If we don’t get more organized, the second half of this year could be brutal.

Insuring tools are in place so that everyone can share and support everyone else would be a good next step. Building a process to strategically pick and pursue accounts would also be helpful. Documenting what’s going on, who’s doing what, will cut down on surprises.

The good news is that this company has already built teams and assigned responsibilities for sales. Those are important first steps in building a sales driven company. But it’s going to take organization and intention to hit goals going forward. Step in with a sales management plan to get things whipped into shape.

Work backwards from the outcomes – sales, to the inputs – sales inquiries, initial introductions to decision makers, information gathering, pricing discussions, proposals confirming offers. Do the math: how much activity is required overall in order to hit the desired number of closes.

For example, let’s say on average 10 inquiries lead to 7 introductions to decision makers, and 5 leads that complete an information gathering process. After 4 pricing discussions, 3 companies accept proposals, and 1 closes. So it takes 10 leads, 7 decision maker introductions, 5 at the information gathering stage, 4 discussing prices, and 3 proposals to get 1 sale. Multiply by the total number of sales needed. If the goal is 10 sales, it will take 100 leads, 70 decision maker contacts, 50 prospects providing information, 40 pricing discussions and 30 proposals.

Create specific individual and team goals. Put them in writing. Make sure individual goals add up to, or exceed, the total of what’s needed at each stage to hit the company’s overall sales goal.

Track individual activity in excel, or in a CRM (Customer Relationship Management) system. Make reporting on activity mandatory. Spend some time on analysis. Figure out who’s on track, who needs help, at which stage.

Develop best practices. Look at who’s getting the highest and fastest conversion rates at each stage. Discuss what everyone can do to replicate those results.

Most sales people report that 30%+ of the leads that close come from their own efforts, and another 30% – 40% of closes probably come indirectly from their prospecting efforts. In other words, sales people are most invested in the leads they generate.

How can you help sales people generate more leads? Make a list of demographics that separate out the company’s targets from the universe in general. Look for a database that identifies individuals or companies by those demographics. Decide how to carve up the database so that people aren’t stepping on each other’s toes.

Agree on a standard approach process. Do the people on the teams send out a letter, followed up by a phone call? Do they go to trade shows to pick up leads? How about connecting with targets via LinkedIn? Whatever is agreed, make each person responsible for his or her own approach. Remember, commitment to follow up is generally greater if people work to get the lead.

Keep a database of all active prospects, indicating who in the company is in charge of the lead. If a lead surfaces that isn’t assigned, add it to the list, give it to someone, track the follow through. If leads in the database are sitting dormant, re-assign them to see if mixing things up can get them moving.

Looking for a good book? Topgrading For Sales: World-Class Methods to Interview, Hire, and Coach Top Sales Representatives, by Bradford Smart and Greg Alexander.

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We squeaked by with sales in April and May, and I don’t want to be here again. Had we not closed a couple pieces of business, it would have been a different, and difficult story. We need to be confidently bringing in business, but I don’t have a good handle on which leads to prioritize, or how much I need to be doing in order to close what we want to close.

For many business owners it’s frustrating to be working so hard, only to see inconsistent results. This certainly isn’t the go-go economy of pre-2008. And that means that business owners are going to have to be on top of their game, better than ever at forecasting, closing more than their fair share, and making sure they’re closing the right kind of business. It’s not easy, but it is do-able.

Start by doing a reality check on what you’ve set as goals. Are you crystal clear about what has to happen each and every month. Is there a written game plan that you and everyone else in the organization can follow?

Decide how many sales have to happen each month. Check on loss ratios on existing business, and be sure to add in enough new sales to close the gap on losses in addition to getting growth. A good average growth rate, net of losses, is in the range of 10% – 15%, which should put you on track to grow faster than inflation.

Set your goals 15% – 25% higher than necessary. This may seem really high, if you’re not already closing enough business. However under planning for what you need is likely to keep you in a cycle of shortfalls. Instead, get aggressive about over-achieving, rather than living with under-achieving sales.

Make a list of questions to ask every prospect. Start with the first encounter. Questions for the prospect can be woven into a script, and asked on every sales call. Keep notes on how prospects answer, and compare results down the road when you know how closed, and who didn’t.

What questions would help your sales and service people know if someone is a legitimate prospect? Make a list of your best customers. Figure out what attributes they have in common. Create a list of questions that would lead to finding out if other prospects have those same attributes.

It may take a little time to come up with a list of questions to ask prospects. And it can sometimes seem like there’s not enough time to work on making a list. However, think about the amount of time that’s been wasted chasing prospects that didn’t pan out, or that turned into lousy customers. Focusing early on, on the right prospects, could save a lot of time and energy down the line.

Take a look at your closing ratios historically. How may prospects do you have to be talking to at one time, in order to get a sale? How long does it take to close a piece of business, from the time you first discuss an opportunity with a prospect, until you get a contract signed and check in hand?

You may find that there’s some pipeline building to do. Often a company isn’t closing enough business because they’re not talking to enough of the right prospects. That makes it a pipeline filling problem, rather than a closing problem.

Look at the resources you have available to commit to accomplishing the company’s sales goals. Do you have enough prospecting activity? Are there enough leads in the pipeline? Who else in the company can work on adding leads to the pipeline? Is it time to hire someone additional to help move sales forward?

Often business owners hesitate to commit additional resources to sales and marketing. They fear that they cannot afford the cost. However, if sales are slow, waiting to expand the team and increase results tends to keep the company in a shortfall situation.

Looking for a good book? Selling in a Recession: 21 Tips and Strategies for Finding New Business in a Tough Economy, or Sales Prospecting Secrets, Sales Motivation, Negotiating Tips, and More to Increase Sales, by Matthew Aaron.

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Andi Gray is president of Strategy Leaders Inc., www.StrategyLeaders.com, a business consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at 877-238-3535. Do you have a question for Andi?  Please send it to her, via e-mail at AskAndi@StrategyLeaders.com or by mail to Andi Gray, Strategy Leaders Inc., 5 Crossways, Chappaqua, NY 10514. Visit www.AskAndi.com for an entire library of Ask Andi articles.

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