Colorado small businesses are less likely to change health insurers for the upcoming year, even as they anticipate continued price increases, according to the second-annual Delta Dental of Colorado Small Business Survey.
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The traditional thinking was assessing the player based on his scoring record or in sales language that would be, closing sales. The new thinking was to focus on the frequency of when the player got on base or in sales terms how often he got in front of a prospect.
So those salespeople who get in front of prospects have a greater chance of closing the sale. In the movie, the thinking was those who have better ability to get on base have a greater chance to score runs. As it turns out that strategy developed a winning team. Let’s use that thought pattern for closing sales.
How do you determine if the time and resources you invest to grow your market and develop selling opportunities are profitable investments? One might think the answer is obvious: If your salespeople are closing sales, it is a good investment. If they aren’t closing sales, it isn’t a good investment.
I suppose there is some rationale for that thinking, but it doesn’t provide an accurate analysis. From a profit perspective, the length of time to close a sale (or close the file on the opportunities that don’t pan out) and the associated costs of doing so is the real yardstick.
Sales that close quickly (without resorting to price-cutting tactics or offering other concessions) are good. Shorter selling cycles mean more sales can be completed in any given period of time. More sales, at acceptable profit margins, mean more revenue, more commission for the salesperson, and more profit for the business – everybody is happy. Sales that take an excessive amount of time to bring to fruition are not so good: fewer sales, less revenue, less commission, less profit.
So, how do you decide where and with whom the salespeople should be investing their time, energy and company resources to profitably grow the business?
First, you’ll need to analyze your market data in a manner that helps you better understand your customers, your markets, the challenges you face and the opportunities available to you. Identifying your company’s strengths, weaknesses and opportunities is a useful method for understanding your situation and making decisions. It provides a practical framework for reviewing strategy, position and direction of company initiatives, and then translating the information into actions that are quantifiable and measurable.
Next, it’s time to turn your attention to the process the salespeople use to develop the opportunities identified.
The more quickly potential opportunities that will eventually go nowhere can be identified and disqualified (allowing the salesperson to move on to more viable ones), the better the profit picture will be. Salespeople need specific criteria and a process to quickly measure the potential of opportunities and quickly qualify or disqualify them.
Concrete reasons to do business – a pivotal criterion – must be established very early in the cycle. Making persuasive presentations or submitting thoroughly prepared proposals before compelling reasons for the prospect to buy your product have been established and acknowledged by the prospect is likely to lead to a longer selling cycle…or no sale at all. The availability of resources to buy your product or service is another element that must also be determined early in the development cycle.
Time — the yardstick we started with — should also be considered. Let history be the benchmark. For instance, if it typically takes 60 days to close a particular class of sale and the salesperson is 120 days into the process, he likely went off track.
When you have specific criteria to judge an opportunity and your salespeople are committed to apply and abide by them, you increase efficiencies and the potential for closing more sales more quickly.
Selling cycles will be shorter, closing ratios will increase and profits will grow. The concepts and lessons illustrated in “Moneyball” have revolutionized the game of baseball. Is your business tracking sales efficiency by simply using a “win-loss” record, or have you evolved to consider all of the other factors that go into generating profitable business that truly builds the value of your company?
Bob Bolak is president of Sandler Training in Boulder. For a free copy of “Why Salespeople Fail And What To Do About It,” call Bolak at 303-376-6165 or email email@example.com.