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enterprise software clients often complain about how brutal this economy
is for closing deals, or why the sales process is torturously more
difficult these days. The list of selling challenges grows longer
ever day-decision-makers who really aren't, risk aversion causing
paralysis, too many vendors chasing too few prospects, merger/acquisition
activity has people focused on job preservation not ROI for the business,
etc.
There's one immutable reality in sales. Sales is a veritable "funnel."
The more you put in, the more you get out. Even a small improvement
in some key ratios will make a direct, immediate impact on sales.
Let's look at three parameters in particular:
1.) More qualified leads: I just completed a project with
a web services company where we generated an additional one hundred
inquiries (or unqualified leads) per week. If only 2% convert that
produces an additional 8-10 sales opportunities per month. Couple
this with more inside sales activities to drive leads and you can
use the numbers game to increase sales. Get your Marketing focused
on Sales rather than branding.
2.) Pursue fewer, better deals: What's better - pursuing
ten deals and closing two or pursuing eight deals and closing two?
Either way you get two deals but the second assumes a 25% close
rate versus 20%, which is really a 20% improvement in the win ratio.
Seasoned sales managers know that it's qualify, qualify, and qualify.
Why? Because you'd rather have more energy behind deals that will
likely close than fall out of the funnel. Obvious truth but not
many sales managers really manage this ratio.
3.) Shave cycle time: Most sales managers will agree that
the average sales cycle has grown by 20% or more in the last year.
Why? The reasons cited are above. But I encourage my clients to
delve deeper into the root causes. Are proofs-of-concepts taking
longer? Are sales reps selling too low? Are you trying to sell an
intergalactic, corporate solution versus land/expand in a business
unit? Is the ROI not compelling enough? I've found in my practice
that the troublesome spots tend to be: insufficient work upfront
to establish the ROI, poor executive sponsorship/interest, and pursuing
the wrong deals. Whatever the reason, do the homework. It's worth
it.
You might already be executing these process improvements. But
I challenge you to ask your Sales VP two questions to satisfy yourself
that your team is doing the right things to drive top line growth:
1) what ratios do you monitor, and 2) what are you doing to improve
these ratios? I promise you that if you ask your Sales VP this on
a monthly basis, you'll see top line growth in one quarter.
Sridhar Ramanathan (Pacifica
Group) is a management consultant specializing in revenue growth
strategies for enterprise technology companies. He can be reached
at (650) 355-9700 or sridhar@pacifica-group.com.
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