High sales performance requires a dynamic combination of hard and smart work… Duh. Everyone knows that. Most, however don’t know what that proportion between the two should be. Why do you perform the way you do? Could you improve? If yes, then how? These questions keep popping up whenever I hear this subject discussed. Luckily, I have an answer for this - I know whether you should be working harder, smarter, or both.
There are 4 sales pipeline levers that add up to achieving better sales results. The principles behind those levers are simple, and they lead to a conclusion that is relevant for all salespeople. The more deals you’re able to drive through your pipeline (#), the bigger they are ($), the better the percentage of them you are able to close (%), and the less time it takes to get a customer (T)… the bigger your revenue and your profit.
The “secret” to how you should work lies with four pipeline levers set on a hard vs smart work matrix below. These pipeline levers can all be located in different places on the matrix. Some require more hard work, while others more smart.
The question here is which area should you focus on the most - where do you start?
When you go through each of the levers, take a look at whether you’re positioned in a similar spot to your benchmark. Your comparison points should be your team members, your industry and your goals - get their statistics and compare those to yours.
I will now go through all the areas one by one, and jump straight into what's relevant for you.
The first lever you can pull is how many deals you put into the pipeline. A real estate sales manager once asked me for advice on what to do with the weakest salesperson in his team. This was my advice - get him to work harder. The simple truth was that if he was currently adding 2 new deals to his property deals pipeline every day, and the team average was 3 then already after 22 days the salesperson was going to have 22 fewer deals than average. All else equal, and you already know who’s going to have a bonus check that’s 50% larger than the weak salesperson - all thanks to 1 more deal prospected every single day.
There is, of course a drop of smart work involved, especially when it comes to list-making and how to get creative in coming up with prospect ideas. We’ve covered a couple of ways in our blog, and so has the best-selling author Geoffrey James who’s drawn up a few techniques in his article for Inc. Magazine.
Now, the really hard part about increasing the number of new deals is not the increase itself - it’s keeping up the standard. Once you’ve made the jump, you need to persevere and keep to the new number, no matter what. There are no hacks or secret tricks here, since this one’s mostly all about putting in hard work.
Imagine a scenario where you’re told to go and ask your employer for a salary that is 10 times bigger than currently. So if you’re making 60,000 a year, imagine you have to go and ask for a salary of 600,000 a year. It seems and sounds crazy, but that’s exactly the feeling you get when you’re told to sell twice or three times as much to a customer as you’re currently doing.
Going after bigger deals requires a shift in your mindset - reaching the understanding that achieving double or triple the sales is even possible is hard work. And it requires, as Hercule Poirot would put it, “exercising your grey cells”. Once you start believing that larger deals are reachable, you can start putting in the smart work - answering the how. Whether it’s upselling, cross-selling, approaching bigger clients or just asking for more money for your product - it only becomes achievable after the shift in your mindset/you’ve realized you can.
Improve the way in which you present the value of your solution, so that your prospects understand what they gain by buying from you. After that, you’ll be able to increase the size of your deals, and close bigger deals.
Getting a deal through your sales pipeline quicker is quite a challenge. It’s even more complicated when you have a lot of deals in your pipeline and they are really big.
It would make a hell of a difference when you close $10,000 worth of deals in 20 days, rather than in 30 days. You’d be able to put through 50% more deals in the same time as the guy with a sales cycle of 30 days.
The objection you often hear is that you shouldn’t rush clients, because you’ll seem aggressive. While I agree that you shouldn’t be aggressive, I do think you should be to-the-point and apply gentle and helpful pressure. It’s important to have the mindset that it’s OK to speed things up. People hate to be sold, but love to buy - Help them pleasantly understand whether they gain value from your solution or not.
Knowing the buying process of your customers will help apply the gentle pressure, as well as get you concrete answers quicker. You either need to keep the deals moving forward or declare them lost, otherwise the opportunity cost - the time you’re not focusing on deals you could actually win - can get very large.
Conversion is what exhibits how smart you do your sales work. This applies both to the overall close rate and stage-to-stage conversion rate.
Imagine a situation where you and Ted both close the same number of deals per month, say 6. Now if Ted’s close rate is 12% and and yours is 8%, it means that you have to approach 75 prospects instead of Ted’s 50. This means that you’re doing a lot more work than Ted - simple. To understand if you work hard or smart is to understand at which stage you lose your prospects.
To do this, you need to measure your stage-to-stage conversions. Discovering the differences between you and Ted will uncover areas of improvement. A smart thing to take into account is that you will always lose some deals. In the case above of closing 8%, you anyways lose 92%. It’s better to make sure you lose them early.
So here are the two things you can do to improve your conversion:
Measure your stage-to-stage conversions and compare with colleagues. Learn how those with better metrics achieve their results. In most cases, the successful salespeople lose early and fast - they don’t spend time generating proposals and holding negotiations with deals which eventually end up as “lost” or that have rather small value. Qualification is key.
Read about the ways to convert better - sales literature is extensive and there’s always something good out there to be read.
Improving your conversions and making sure you lose unqualified deals at the right time (read: early on) will make you far more efficient than now, and save you a lot of energy.
Get your four levers in shape and you’ll see an increase in your revenue and profit. It’s as simple (or tough) as that. But the important thing is that it’s achievable for any salesperson willing to put in the work.
As always, leave the comments below or get in touch via twitter.
Image courtesy: Pipedrive and Flickr Creative Commons
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