ARCHITECTING REVENUE GROWTH

The evidence that formalised sales processes improve sales performance is absolutely overwhelming - a raft of studies have shown that companies that have implemented structured sales processes outperform companies that haven’t by anything from 20-45% or more.  So why are so many companies still so reticent?

I think that a big part of the problem is the feeling that implementing a defined sales process is the equivalent of applying a straightjacket - and that it will somehow restrict the creativity of the sales team. In fact, the evidence clearly suggests the entirely opposite conclusion.

Far from stifling creativity, well-defined sales processes actually release creativity - as long as the processes are thought of as skeletons that support the sales person’s initiative, and not as cages that restrict their ability to think out-of-the box. Here’s why…

A recent article in the McKinsey quarterly has highlighted a phenomenon that many of us have observed: B2B purchasing decisions are tracing increasingly complex journeys - and these changes are challenging the long-standing behaviours of many B2B sales organisations.

It’s becoming increasingly unhelpful (and massively unproductive) to represent sales pipelines in terms of simple traditional linear sales process that sales people are required to follow - because your customers don’t behave that way.

McKinsey’s research identified that B2B customers regularly use an average of six different ways of interacting with vendors to get the information they need - and showed that two-thirds come away frustrated by inconsistent experiences.

It seems like a self-evident truth, doesn’t it? One of the consistently effective b2b sales strategies is to sell the way your customers want to buy. All you need to do is to understand their buying decision process.

According to research published last year by Hank Barnes of Gartner, your prospects may be more willing than you think to help you understand how they go about making purchase decisions. Not unexpectedly, a quarter said that they view that sort of information as confidential.

But to varying degrees, and depending on how they were asked and on the quality of their relationship with the the vendor and their representative, the remaining three-quarters of the clients Gartner surveyed expressed some degree of willingness to share the information with a sales person…

I’ve lost count of the number of clients who call me in because they think their sales people have a problem closing new business opportunities, and whilst there often appears to be an issue in that area, in my experience the real problem typically starts much earlier.

You see, when I really dig into the client’s situation, I invariably discover that one of the primary reasons that opportunities aren’t closing is that the opportunities weren’t “opened” the right way in the first place - and no amount of closing skill can make up for that.

No amount of slick language, alternative closes, the introduction of a puppy dog, special pleading or any of the other traditional sales closing techniques can compensate if the opportunity is currently fundamentally un-closable.

Of course, every VC wants to see their portfolio companies grow. But as Scott Maxwell of OpenView Venture Partners points out in a persuasive recent blog (link below), companies that deliver predictable revenue are regarded as even more valuable.

Now, if you’re still at the pre-revenue stage, your revenue projections have no way of being validated - although they will have hopefully been based on something more substantial than what a prominent investor once colourfully described to me as “rectal research” ;-)

But as soon as your organisation has reached that all important post-startup growth stage and before you start looking for that next wave of expansion capital, you had better start managing by the numbers…

Let’s face it, every sales funnel leaks. It’s just that some seem to leak more than others - and many are leaking in all the wrong places. It’s a particular challenge in complex sales environments, where significant effort has to be expended to get any deal over the goal line.

The effort and resources that goes into opportunities that are eventually lost to a competitor, or to a decision to “do nothing” cannot usually be recovered. Now, some measure of wastage has to be expected - but a significant amount of that waste could be avoided.

In complex sales pipelines around the world, there is a substantial proportion of opportunities that are destined to be lost or abandoned. What we need to do is to recognise them early, before we’ve invested a bunch of unnecessary time and effort in them...

It’s often quoted, but worth repeating: the biggest single reason why B2B sales people lose seemingly well-qualified opportunities is because the prospect concluded they didn’t actually have to do anything - and so they decided to do nothing.

It’s hard for your sales people to blame the “competition” for being more keenly priced or having better features when the prospect decides that they are actually more comfortable sticking with the status quo - in fact your sales people can only blame themselves.

It’s a hard thing to acknowledge, but whenever a sales person loses to “no decision”, they either failed to qualify the opportunity accurately, or failed to execute a good enough sales strategy. There are no other excuses…

If your organisation has a complex sales process that requires a series of interactions over several months with a range of different stakeholders, there’s one thing that matters above everything else - the effectiveness of your sales conversations.

Not how much you spend on marketing, or how clever your campaigns are, or how distinctive your logo looks, or any of the other things marketers are tempted to spend time and money on. Nothing matters more than setting the scene for a series of effective sales conversations.

But here’s the problem: far too many marketers seem to believe the job is done when their message has been delivered to the target audience, or a “lead” has been generated - but at that point the real heavy lifting has only just begun…

The numerically gifted amongst you might be scratching your heads at this point. At face value, one hundred times one percent adds up to exactly the same as one times one hundred percent. And from a purely mathematical perspective, of course, you’re right…

I know many CEOs believe that hiring the best sales people is the recipe for sales success, and of course, they are partly right. But there is a critical missing piece to that puzzle - and it’s not just about giving your new hires the right sort of product training…