As you build your organization, it’s common for many sales teams to be left lacking. Founders and CEOs are often very good at selling. They handle client relationships on their own and they expect sales teams to simply follow suit. Top management employees have a natural instinct to manage their clients, but can sometimes neglect the importance of creating a sales pipeline for their salespeople to track and monitor. The problem with salespeople is that they love to be optimistic, and taken at their word you may get an overestimation of what sales are going to be. In short, you need hard data. That’s where an effective sales pipeline comes in. As you track leads and prospects as they turn into business – you get much needed information on the sales process so you can optimize and let sales get on with their job. If you’ve never sold before you should brush up on your skills in this course before heading any further.
For a new company, it’s critical that you spend the time to set up the process with an effective sales pipeline. In simple terms, this is just a record of the business you’ve attempted to close over the last month, quarter or year – captured in a CRM (customer relationship management) system that allows you to analyze every piece of business you’ve tried to close. There’s a really good post for those of you who are new to the concept of a sales pipeline.
What’s great about a sales pipeline is that over time you start to see consistent results, and from here you can forecast future revenues with more and more accuracy. You’ll be able to see how many phone calls each sales rep needs to make to get 5 leads, and how many of those 5 leads will turn into business. This boosts the confidence of your sales reps, and allows you to plan your business accurately to meet the future demand. It also gives you information on where you are falling short, perhaps you’re not converting enough customers or you’re only capturing a small piece of their business.
To get started you need to be able to quantify three points:
- The potential value of an account
- The length of the sales cycle
- The key decision makers
If you’re building up a new sales team you have to focus on training your sales staff to discover these three points – if you don’t they’ll be wasting time on unqualified leads, or overestimating the sales pipeline with their optimism. If you’re in this boat you could learn a lot from this course on prospecting for new sales.
During the process of gathering this information you need to be very careful. If you’re too upfront about how you ask potential clients the above topics you can lose the business. No one has ever reacted favorably to the question “are you the decision maker?” so don’t alienate your prospects. A softer approach works well, and will yield the same information. For example, “we understand that for this type of purchase that decisions are often made by a large portion of the executive team. I’ll be able to understand and address your needs smoother if I can gather information from everyone.”
If a client is unwilling to discuss a budget you can get around their refusal to name a price by softening the approach as well. You can get a very good feeling of what your clients are thinking by offering a price range, with a question like “our accounts typically range from $10,000 to $30,000, where are you most comfortable in this rage?”
Find the Magic Metric
In an ordinary sales team the only focus is the final sales results. If you are effectively using a sales pipeline you have the data on hand that can potentially lead to more and more sales – so you’re much better than just ordinary.
Break down all of the steps in your sales process, from the initial inquiry to the clients final response. In many industries a key driver of success is the time it takes for you to respond to a customer’s inquiry. In the education industry an inquiry that is contacted within 2 minutes will be 4 times more likely to convert than an average lead. That’s quite an incentive to pick up the phone!
Have a look at your company’s average response times. I guarantee you’ll be shocked with the figures if you’ve never looked into them before. Unfortunately sales teams have a tendency to follow up and spend their time on leads they believe are a “sure thing” and overlook new acquisition accounts. Just by making response time a priority, you can see rapid improvements in your final sales figures as your conversions shoot through the roof.
A sales pipeline is only as good as the potential accounts flowing through it. Giving free advice is a fantastic way to bring clients into your sales funnel, and many companies have had success with the “freemium” business model. Typically this is done by start up entrepreneurs and app developers, to let customers try either a small portion of the products features, or to have access for a limited time only. After they use the products with no strings attached you build trust and rapport, just by getting them to try it. Customers that have gone through your process and loved the product are usually very happy to “upgrade” to the full range of products in your sales pipeline.
What makes sales pipelines fantastic is the ability to measure your results. Doing it consistently gives you reliable data to look back and analyze your performance, as well as being able to make predictions in the future.
Two very interesting metrics are the cost of acquisition and the quality of your lead sources. One source may be costing you $500 for every lead, but closes 75% of the time, which is much better than $100 leads where you only close one in every ten. Armed with this data your salespeople can target the best potential leads, and maximize their effectiveness on the job. You could take it a step further and even look at the total value of clients from different lead sources, and choose to focus on a combination of high converting and high value clients.
Simple metrics like the number of calls your team are making every day is a good indicator of productivity, so long as there is a balance between their final sales results and a high number of calls. You can even track how much support is needed for particular customers once they become an opportunity, and see how long your sales and customer service staff are spending calling and emailing each client you have.
When Someone Says No
Business is fluid, and things change every day. In business you should never take no for an answer, because (in this case) no doesn’t really mean no – it just means not now. For whatever reason you haven’t built enough trust, or the client isn’t in a position to buy your products. But people change, and in the future the opportunity may come again.
Please don’t go overboard – there’s no need to drive your potential clients crazy, but do have a plan in place to follow up with your lost and potential accounts throughout the year. Many big clients can take months or even years to land, as you spend time building a relationship and convincing them that they have to buy your products. If you struggle with hard persuasion selling you can learn a few tricks to be more effective in this course.
Know the Right Buttons to Push
Converting a client is all about getting your leads excited for doing business with you. If you understand your client base, and find out what it is about your products that excites your customers you can give them an exclusive experience. Whether it’s free shipping or landing pages targeted to their own city, you can use the data from your sales pipeline to refine your products even further.
Analyzing Your Wins and Losses
Finally it comes down to building a target for your sales strategy. If you look at the big wins and losses each month you can get a better understanding of where you’re doing really well – and what may need a little focus. Finding out why you lost an account is key, because all it really means is that they found someone who could meet their needs better than you. Once you can identify this, you can modify your sales process to either adjust and provide the service, or identify any “bad fits” as early as possible in the sales process.
Optimizing the way your company sells is what sales pipelines do best. Without one, you’re going to end up with no (or very little) business, so be sure you take the time to set up your pipeline, and all of the surrounding processes. Once you’ve got it mastered, you can take your sales to the next level with a course on mastering your sales technique. Happy hunting!