What is sales effectiveness?

Sales effectiveness is everything that has the potential to improve overall win rates for your sales team and more specifically conversion rates at different stages of the sales cycle.

That means its scope is almost endless – ranging from the effectiveness of sales collateral in generating leads, or enquiries, to the effectiveness of sales presentations and proposals.

 Indeed, sales effectiveness brings the notion of continuous improvement to all aspects of sales and sales led marketing.  Faced with real resource limitations, it is also the application of ‘work smarter, not just harder thinking’. 

Sales effectiveness necessitates closer alignment between sales and marketing – something that is lacking in many organisations.  The results are clearer joint goals, greater co-operation and fewer demarcations.  It also means an accelerated transition from traditional mass marketing (big events, expensive ads, etc.) to one-to-one marketing aimed at specific customers, niches and segments.

Sales effectiveness also means responding to marketplace changes.  More specifically it means more effectively tailoring the seller’s proposition (product or service) and sales efforts to the prospect’s individual and often idiosyncratic needs.  

The All Time Top 11 Sales Manager Complaints

There is no question but that the economic slowdown has focused the minds of sales managers, after an almost unparalled 5 years of global growth. 

However, for the last number of years we have been polling managers regarding the challenges facing their sales organisations.  Here is the list - the alltime Top 11 sales manager complaints:  

1.       ‘Buying Cycles Are Longer’

2.       ‘Buying Decisions Are More Complex’

3.       ‘More Deals Are Stalled or Delayed’

4.       ‘Conversion Rates Are Falling’

5.       ‘Forecasting  Accurately is More Difficult’

6.        ‘Sales Targets Are More Ambitious’

7.       ‘Sales & Marketing Costs Are Rising’

8.       ‘Competition is intensifying’

9.       ‘Lead Quality is Falling’

10.    ‘Sales Rep Turnover is Rising’

11.    ‘Access to Senior Executives is limited and getting in the door a problem'

So, how many of these challenges are you facing?

Sales Effectiveness - The New Mantra

With conversion rates under pressure from increased competition, lengthening sales cycles and increasingly demanding buyer sales effectiveness is the new mantra for sales managers across the globe.

The focus on sales effectiveness recognises the need for greater visibility, predictability and control in respect of sales.

Sales Effectiveness brings the notion of continuous improvement to all aspects of sales and sales led marketing.  The best results are achieved by focusing on the identification of a variety of modest improvements across the organisation and throughout the sales cycle. 

Although the approach is incremental the results can be extraordinary.  Typically a 3% increase in conversion rates at each stage of the sales cycle can double the rate of sales growth.

Rather than looking at win rates overall, managers are looking for improvements at each stage of the sales cycle; leads, meetings, cycles, orders and repeat orders.

Increasingly managers are viewing sales and marketing as the revenue generating engine of their business.  This results in a more engineering-led approach to sales, with greater emphasis on metrics, systems and conversion rates.

This approach also enables managers to look behind such general problems as ‘not enough leads’ or ‘low conversion rates’ to identify specific opportunities to accelerate sales growth in their business. 

The drive for increased sales effectiveness necessitates an approach to sales that is planned, structured and systematic.

 

Why Proposals Make Poor Sales People

Your proposal can’t and won’t sell for you, unless of course you have done all the ground work first. We write them assuming that they will sell for us, or more specifically that they will be read, and if read will be understood, appreciated, or even believed. 

Two decades ago, I enjoyed great success by directly and speedily replying to requests for proposals, often without meeting the customer in advance of submission.  How times have changed! 

As a general rule the earlier a proposal is submitted the lower the likelihood it will succeed.  Also the more proposals are generated, the lower the likely overall rate of success.   

So, how to ensure that when you do write a propoal it has the maximium chances of success?  Well, here are some of the ways the sales people we know are increasing their hit rates:

1. Avoiding pre-mature diagnosis through more systematic needs analysis
2. Avoid unilateral identification of needs and solutions
3. That requires a bi-lateral approach, with lots of interaction, listening, probing, coaching, etc.
4. Clear criteria regarding when Proposals will be prepared – a new approach to proposal preparation:
5. Involve the customer in writing the proposal, or write the proposal with the customer at your side
6. Avoid surprises – the role of the proposal is to confirm what has been already discussed, or agreed
7. Trial balloon price and other aspects of the proposal and ensure feedback before submission
8. Arrange a formal presentation of the proposal post submission
9. Improving the quality and presentation of proposals, strengthening in particular the references and the investment and return sections

Time to Get Closer to the Customer

‘Close to the customer’ was a buzz word in the 1980s and 90s inspired by one of the biggest management books of all times; In Search of Excellence – the classic study of Americas most successful company by Peters and Waterman.

However, there is one aspect of closeness to the customer that has a major impact on the sales success of many organisations. Companies have successfully sold, installed and supported their solutions. Yet, they often lack detailed information, or even a clear understanding, of the experiences of their customers, at all levels – from end users to managers – of using their solutions.

That impacts on their ability to proactively manage and grow the post sale customer relationship and in selling to new customers leaves them short of information, stories and data on the real and specific benefits and challenges experienced by using their product.

We are always encouraging managers to get more specific regarding the quantifiable business impact of their solutions, such as for example the impact on key metrics such as costs, sales, time to market, etc. Yet, we are amazed to find that most organizations struggle with providing this information, or substantiating it by reference to results achieved by their customers.

We are also encouraging sales people to communicate benefits and features in the most compelling manner possible – by telling customers stories, whether by means of case studies, anecdotes, or customer references. Here again, however, closeness to the customer in terms of the experiences, use cases, etc. of the solutions sold are vitally important.

Could you get closer to your customer? When is the last time you talked to an end user? Do you know all the joys and frustrations experienced by the users? What are they key metrics against which customers measure your solution? What are the stories that you really want prospects to hear?

Bid Losses Offer Clue to Sales Effectiveness Opportunities

The loss of a number of recent bids had heightened competitiveness concerns among the sales team of a leading IT services company.  This was compounded by fears regarding a general economic slowdown.

However it is precisely in depressed markets and among down-spirited sales teams that a focus on sales effectiveness can produce the greatest results.  In particular two key opportunities to increase sales effectiveness were identified:

1.   1.  The sales team was over reliant on proposals to sell.   Most proposals were prepared after an initial short meeting with the customer, or following a phone call or email enquiry.   As a result proposal success rates were low, with limited information gathering / needs analysis, or prequalification before submission and no gauging reaction to price.

2.      2. Hampered by an insufficient flow of sales leads – reps were responsible for generating all their own leads, as a result less than 10% of their time was spend meeting new customers, with just one new customer being met each week by each rep.

In respect of proposals new criteria regarding when they are to be prepared and a policy of greater interaction with buyers before submission reduced the number of proposal generated, but dramatically increased win rates.  

Added to a telemarketing campaign to generate leads and increase the number of prospects being met, the result was a 22% increase in sales growth.  

Managing Sales Cycles To Increase Win Rates

'Many of our potential customers have reigned in spending’ complained the sales manager of a software company selling to the major financial institutions.  ‘It is not that we are losing business to our competitions, it is that more and more buying decisions are stalled’, or delayed he explained.

The turmoil in the financial markets has certainly had an impact on IT investment plans among the big banks, however how the company managed sales cycles also contributed to the number of stalled decisions.

Working with the manager and his team a range of opportunities were identified to improve the management of sales cycles, including:

• More thorough pre-qualification – it was clear that the sales team did not have a full understanding of budgetary and timing factors in all cases
  
  
• More extensive coverage of the buying unit – the sales team was relying on just one or two contacts in the buying organization
  
  
• More systematic needs analysis – in many cases there was insufficient information to complete a business case for the buyer
  
  
• Ensuring more time is spent with the prospect in order to fully understand needs, build relationships and demonstrate commitment - the amount of interaction with the buyer before submitting a proposal was limited
  
  
• Uncovering, with buyers, latent business needs and helping them to create a compelling business case for their resolution with your solution.  In other words, sellers can't rely on buyers knowing exactly what they want, or need.  They must generate awareness of the need, rather that simply serve a ready made demand for their solutions. They have to dig beneath the surface to uncover new problems and educate buyers to needs and solutions that they may have previously been unaware of.  
  
  
• Reducing buyer risk – there was limited use of low risk pilots, scoping, or phased projects that would make it easier for clients to commit
  
  
• Identifying and accentuating points of pain – in most cases the sales team had not helped the buyer to create a compelling case for buying now, as opposed to later.
  
  
• Helping the buying organisation to structure its buying decision making process, including clarifying requirements, criterion, information requirements, etc.

Sales People at The Top of their Game

We watch 100's of sales presentations every year and still get a kick out of watching the pro at work.

In sport, or indeed in any area of human endeavour it is wonderful to watch somebody at the top of their game. This applies to a sales pro, as it does to any other professional.

And in the case of the sales pro, there is high probability that he/she has received some formal sales training. Whether from Miller Heimann, Sandlier, or anybody else, you can tell within moments of the start of the presentation.

The pro has learned from the best, assiduously practiced their art and perfected it over long periods of time. That performance and achievement is, or at least has the appearance of; ease. It is characterised by confidence, enthusiasm and skill.

Sales Revenues Fall as Sales Effectiveness Slides

There are two key variables that explain the peformance of most sales teams: the levels of sales activity and effectiveness.

The first one is the number of sales leads, meetings, cycles, proposals, etc. The second is the conversion rates at each stage of the sales cycle - from sales meetings to sales cycles, as well as overall win rates. Here is a good example of this in the real world.

A long established business services company dominated its market for more than 20 years growing sales in a manner that at times seemed almost effortless. However, in more recent years sales had shown a dramatic decline.

The sales team pointed to increased competition, changing buying patterns and minimal marketing by the company as the causes of the downturn.

However, further analysis identified that low levels of sales activity and effectiveness as the prime factors involved. For example:

· On average sales reps met only one new customer, or potential customer, every 2.5 months (i.e. 4.8 per annum).

· Conversion rates stood at 25% and average order values of £15,000, posing a real challenge in terms of growing sales

· The sales manager complained that sales people were selling products, as opposed to solutions and pointed to the ability to communicate value as the key challenge.

· There were no targets for growing revenue among existing customers, a siloed approach to selling across divisions and no key account plans. These factors explained declining levels of repeat business among existing customers.

By increasing the level of new customer sales activity by 15% over 6 months, growing average order values by 10% and repeat business by 7%, the company reached its year-end target midway during quarter 3.

Where are the opportunties in your business? What is the potential to increase the level of sales activity, or sales effectiveness?

What will it take to be a better sales person?

Its a new year and that means new year's resolutions. Aside from going to the gym, not working as hard and spending more time with the family, what else are you going to do?

Well, in addition to getting in better shape, or achieving a better life-work balance you may be setting a goal of getting better at your job. Maybe you are resolving to get better at sales and marketing.

But what does 'better ' mean. Well here is what Michael Bosworth and John Holland describe as 'better' in their book Customer Centric Selling.

Better in that you will stop thinking in terms of your products and their features, and start thinking in terms of your buyers and their goals, problems and needs.

Better in that you will stop forcing products on buyers, and instead start allowing them to convince themselves of their need for your offerings.

Better in that you will stop giving long-winded, opinion-laden speeches to lower-level 'buyers' and instead begin to have no-nonsence, results oriented business conversations with decision makers.

If like me you are striving for prefection, but have not quite achieved it yet, then that is a good definition to start with and a worthy resolution for the new year!