Optimizing Sales Process

Are you (or your company) closing as many sales as you’d like?

Many organizations have teams of marketers who optimize everything they can, from Facebook ads to landing pages, email campaigns, and more, all in an attempt to generate more leads.

But then what happens?

Once a lead is generated and handed over to sales, the process isn’t always as efficient. Perhaps you can relate; sales reps using their own pitch decks, creating new CRM processes, proposal templates, and more. This lack of sales optimization not only costs your reps time, but it’s likely costing you closed deals, too.

In this article, we look at the sales cycle and outline what to look for, plus tools that can help you optimize each stage of the sales process.

Benefits of optimizing sales process

There are many benefits to optimizing your sales process, some obvious, some not. These include:

• Improved win-rate – By optimizing the sales process, you’ll increase the conversion rate between each stage, and ultimately improve your win-rate.
• Shorter sales cycle – Research shows that it takes twice as long to lose a deal than to win one. Or put another way, the longer a deal is in the sales cycle, the more likely you are to lose it. Conversely, if you can optimize your sales process and accelerate your sales cycle, you’ll likely also increase your win-rate.
• More capacity per rep – Optimize your sales process to remove unnecessary manual steps, and you’ll increase capacity per rep. Imagine…more time for prospecting, pipeline management, or for more focused and personal attention to each account.
• Better team morale – Sales reps love closing deals. Ringing the sales bell and earning commission is a great feeling. However, they don’t love negotiating clauses in sales contracts with legal teams. If you can optimize the sales process, not only will you generate more revenue, but you’ll have a happier sales team that sticks around longer. (Very important, given it can often take a new rep 6 months to reach full productivity!)
• Faster feedback to marketing – If you can optimize your sales process and get a better win rate plus shorter sales cycle time, then you’re going to get faster and better feedback on your marketing initiatives. For instance, if you spend $10,000 to generate 100 leads from Google Ads per month, have a 20% win rate and a 3 month sales cycle, then it’s going to take 6 months to get proper, statistically-significant feedback on the effectiveness of that channel. However, if you have a 30% win rate on a 1.5 month sales cycle, then it’s going to take approximately 3 months to get statistically significant feedback. If it turns out that channel isn’t returning ROI, then you save $30,000 of your marketing budget (3 months at $10k per month).

How to optimize your sales process

1. Map out your current processes

Most companies have an informal sales process, where everyone sort of knows what is supposed to happen and who does what. The first thing you’ll want to do is map out these informal processes to get a formal understanding of all the steps to making a sale.

Examples of sales process steps include:

·       generating leads

·       sending proposals

·       negotiations

·       sales confirmation

·       delivery

·       receiving final payment

2. Define your key performance indicators (KPIs)

Writing down your processes will allow you to track prospects as they advance from one step to the next. This will allow you to measure how many leads successfully move through your pipeline. You’ll also know how long it takes to complete a sale on average from start to finish.

If you talk to 100 leads next month, how many leads will move onto the next step? Is it 50%? 10%? You can measure that and use it as a KPI. You can also measure service turnaround time. If it usually takes the sales team two days to turnaround a quote and all of a sudden it turns into 10 days, then that’s a big problem and it needs to be fixed.

Common KPIs include:

·       sales to date this month

·       sales to date this year

·       overall time in the sales cycle

·       closing rate

·       burn rate (How much money you are spending in your sales process.)

·       average sales price

·       lifetime value of a customer

·       customer acquisition cost

·       churn rate (How many customers repurchase your services or products.)

3. Follow-up and measure performance

Holding sales meetings is a good way to ensure a regular review of sales data. The goal of the meeting should be to determine what opportunities are in the pipeline and how leads are moving through the process.

Your KPIs can also be used to measure individual performance. Employees generally appreciate the transparency of knowing how they are judged. It can also be a great way to foster friendly competition within your team.

The data gives you clarity and purpose at the sales management level. Why is my guy just sitting at his desk? Why isn’t he on the road? If you have a process by which to judge behaviors and accomplishments, then you are no longer asking those questions. Data collection and its management is a habit you have to stick with. Otherwise, you won’t have that window into how your sales are going.

4 Use technology to simplify monitoring

Your next step should be to centralize all your client and contact information. This database can take the simple form of a spreadsheet, but as your business grows, you will probably want to invest in customer relationship management software (CRM).

Twenty years ago, the cost of CRM was prohibitive, or they were complicated, but that’s not the case anymore. Many have scaled back versions that can get you started recording data and mapping your sales process.

A good CRM system will:

·       store all your contact information in one place

·       allow better sharing and communication of information across your team

·       help manage your activities tasks and steps in the process

·       automate the tracking of your KPIs

5. Start forecasting your sales

You can think of your processes as a funnel or pipeline. By measuring your conversion rate at every step, you’ll be able to determine the inputs you need to achieve your sales goals. If you talk to 100 people and know we can close 10 of them, the math gets pretty easy. But you have to be doing the math and measuring all this stuff otherwise, you’re guessing.

One trick is to think of your sales funnel as a reverse pyramid. If 50% of your leads move on to the quote stage, 20% go on to the negotiations stage and 25% close, then you know that you need to talk to 1,000 leads to sell 25 units. 

6. Increase your sales

After you’ve mapped your processes and established a forecast, it becomes simple enough to increase your sales. You can calculate that to get X amount of sales you will need to spend X amount of money to increase the number of prospecting calls or pay-per-click advertisement to get more leads in your pipeline.

However, you might be better served by working to optimize your existing processes. This is usually done by:

·       Improving your win-rate (close more deals)

For example, you can tweak your sales script, create offers that are more appealing and provide additional training to your sales staff.

·       Increasing your deal size (sell more stuff)

Consider offering discounts for larger orders, free shipping for orders over a certain threshold, or upselling and cross-selling items.

Conclusion

Optimizing your sales process has many benefits, including more closed-won deals, reduced sales cycles, improved efficiency, and increased team morale. It can also be the difference between a bad sales year and a good sales year or a good year and a banner sales year.

If all of this seems a bit overwhelming, don’t worry, you’re not alone. You’re an expert in your particular business and probably not an expert in designing and optimizing sales processes. We’d enjoy the opportunity to help you get started with a 45-minute brainstorming session. There’s absolutely no cost to you. 

To learn more and schedule your brainstorming call…. CLICK HERE.