Keeping your All-Star Closer on the Mound

This installment seems pretty intuitive at the surface, so stick with me as I go a little deeper on the concept of why taking less value-adding activities away from your rainmakers makes sense.  Also, we’ll spend a little time on the collateral benefits to the organization of freeing up your best closers’ time.

There are essentially two paths where this initiative can go once things start moving and your rainmakers have more time:

1. More energy with/on current volume of prospects
2. Same energy with more prospects

Most likely, the end result will be a combination of the two, but it’s important to be purposeful about which way you intend to lean.  Here are some simple considerations to help determine which way to tip:

Potential drivers for (A) – spending more/deeper energy on the current volume of prospects

• You have a very tight market with limited prospects
• A strategy that involves a limited number of key whales
• The ability to go bigger on the initial solution or sale would have more than an incremental benefit to the bottom line
• New product launch (requiring depth of talent and solution)

Potential drivers for (B) – Similar sales process with more prospects

• New market vertical investigation or launch
• New product launch

Talking through the impact of either of these with the sales team can yield great conversations about opportunities and the expectations that come with it.  If you’re going to invest in freeing up their time, you as the leader have a responsibility in situation (A) to set clear goals and expectations for either an increased close ratio at the stages of the funnel that they will be spending their time in, or hold those ratios steady and speed up the sales cycle.  In situation (B), the message to the sales person is a straight numbers game; just keep doing the same good work, we’re just going to have you do more of it.  Your responsibility as the leader in situation (B) is just to make sure that they have the resources and horsepower to keep their calendar full.

In case the idea of having more revenue and customers dropping out of the funnel isn’t enticing enough, here are a few other thoughts to get you revved up or to woo your sales manager down this path:

• Sales people, just like everyone else in the organization, perform better and stay longer when they spend their time doing what they enjoy and are good at.
• Use some of the freed up time to engage them in continuous improvement.
  • The sales team is typically one of the last to get involved in continuous improvement for a number of reasons. Requiring some of this time to be reinvested in the business can draw them closer to operations, admin, etc. and be an emotional boost for everyone.
  • Have them work on documenting or developing processes will lead to knowledge transfer, scalability, and business continuity down the road.
• You’ve eliminated one of the biggest excuses for CRM usage and accountability. If they aren’t using the CRM exactly how you need them to, here’s an inflection point to clear that up.

Sales is about getting your hitters their at-bats

Hopefully your sales team is made up of one of two types of people, or both:

1. a) experienced closers
2. b) young guns that are quickly on their way to being closers

If you have lingering mediocrity in your sales team, or even worse, you don’t have one or aren’t sure, let me know and I can point you to some great books or consultants to help you get the right people on your sales bus. 

This piece is about execution and results, so we will assume you have already scouted and selected your team. We’re going to talk about a critical step yielding the sales growth you’re after.

I consistently hear other executives, clients, prospects, etc. reiterate what local and national surveys tout as the number one objective of business this year (and last year, and the year before): sales growth.  We’re always looking to grow the top line, add new customers, scale up.

But when you talk to the Salesman or Saleswoman, not the VP or Sales manager, one of the things that rarely gets the attention that it deserves is the time they are spending not selling.  I’m not talking about internal meetings and emails, travel time, and admin; that gets plenty of attention from lean experts.  I’m talking about all of the activities in the sales process that aren’t actually closing the work.  Early in the sales funnel, there are a lot of activities that are important, but are NOT CLOSING.  They frequently get lumped in with selling, and therefore taking up the time of your best sales people unnecessarily!

Early funnel activities that ARE NOT SELLING:

• List building, purchase
• Data cleanse
• Point-of-contact validation
• Contact info gathering, validation
• Introduction, information sharing
• Content delivery
• Initial investigation, opportunity identification
• Follow-up, lead nurturing
• Appointment setting or warm-transfer

Where my last post focused on the overall sales management process, the next 3 posts will focus on the benefits of taking a close look at these early funnel activities and the chunk of time that your sales people spend doing them, as well as some of the pitfalls of (excuses to) not looking at a different way to go about driving early funnel activities.

For now, focus your mind’s eye on the end-game.  Resist the urge to come up with all the execution detail or things that would be challenging.  Picture what your top-line could look like one year from now if 20-75% of your best sales person’s time was freed up to close more sales.  For your product and organization, does that lead to a faster sales cycle?  Does that lead to a better close ratio in the final stages of the funnel?  Does that lead to faster development of your best and brightest? 

Ultimately, all of these things are consistent with everyone’s end-game: more and bigger closes.

Inside Sales, science feeding art

There is absolutely an aspect of art in the execution of a successful sales process.  But there is also absolutely a needed aspect of science to sales in order for your business to be as successful as it should be. 

This post, and a series of posts to follow, are intended to be at least thought-provoking, if not instructional, on how to approach your own sales funnel and client acquisition planning.  In later posts, I will share thoughts and processes on how to make decisions on execution plans related specifically to inside sales activity and early-funnel movement.

Inside Sales Math

The analogy of the funnel has leads flowing from top to bottom, becoming prospects, opportunities, and eventually clients.  However, we’re going to build the sales plan from the bottom of the funnel upwards.  Pre-work to this planning exercise lies in your business plan and growth goals for the company.  The two initial inputs to the process are the revenue target and the number of opportunities closed.  Most leaders start with the revenue target, based on where they want the organization to be 1-2 years from now, and then calculate the number of closes based on a desired or historical average revenue per opportunity closed.  The figure below shows the inputs, as well as an example to help illustrate.

From here, we work our way up the funnel.  Each ratio should be filled in with either historical ratios if known, or realistic estimations/goals.  The mathematical stack-up of these ratios can cause significant issues if you don’t use precise and realistic ratios.  The only other inputs that need to be determined are at the convergence point at the top of the funnel.  Strategically estimating or targeting what percentage of initial conversations come from each channel allow us to move even further back in the sales process.

Here’s an example:

Now that you’ve worked your way to the top, take a step back and look at a couple of potentially interesting interpretation points.  Hopefully these will lead to a few very clear action items as well:

Number of closes, proposals, meetings

• Mentally divide each of these numbers by 50, and you will get an idea of how many closes/proposals/meetings per week you should be seeing from your sales team.
  • Are these numbers reflective of recent activity?
  • Do you have the depth and quantity of talent to handle these activities? Who can execute each of these late steps in the process?
• Where is there opportunity to increase the ratios in these steps? The closer you are to the bottom of the funnel, improvement of the ratio has a very linear impact on the final outcomes, as well as the cost to make that improvement.

Upper Branches of the funnel

• Do you have the tools in place to generate that many interactive leads?
• Do you have the partners/network to generate that many referrals?
• Do you have the tools, talent, raw material to generate the leads? What is your biggest challenge, the size of the potential lead universe, the qualification process, or the quality of the leads?

As you’ve probably noticed, the bottom of the funnel is highly dependent on the capacity and skills of a few critical sales people or executives.  Alternatively, the early-funnel activity at the top is driven more by statistics and processes.  In most businesses, referrals have the highest conversion ratio, but require costly resources and can be difficult to generate, more similar to the “artistry” that the closers are employing at the bottom of the funnel.  Inversely, lead generation can be done very effectively with internal or co-sourced capacity at very reasonable costs and can have great impact on the number of touches and awareness in the marketplace, but the conversion ratios are much lower. 

The artistry that is driving the big, exciting close at the bottom of the funnel is fueled by the science at the top of the funnel. 

As you’ll consistently hear from me in posts, I’d love to hear where you went with these thoughts.  What additional questions came to mind? What innovative thoughts were spurred? And what holes did I leave?