July 15, 2011
The struggle with sales
No doubt about it: Many businesses struggle with sales.
They have no problem doing the work, but they have a serious problem selling the work. And until they fix this problem, their growth will be severely limited.
Does this describe your business?
BY PHIL HARWOOD
Taking the time to draft a step-by-step sales process that builds in accountability, will result in a higher close rate.
In many small businesses, the owner is a part-time, untrained salesperson. He or she is also actively involved in marketing, operations, customer service, account management, administration, accounting, finance, human resources, legal issues, and more. The challenge for these owners is to be able to carve out time to focus on sales and to follow a systematic sales process when they have their sales hats on. Their sales skills get rusty between sales calls, and they struggle to keep up with leads. Many great opportunities fall through the cracks because of the simple lack of follow-up.
Even in many mid-sized and larger businesses, sales processes are often not well defined and are sometimes even inconsistent with strategy. I also regularly find underfunded sales budgets and an effort to replace sales activity with marketing activity. Marketing is absolutely necessary, but a business cannot completely ignore the sales function. Driving traffic to your website is great, but if you can't return a phone call from a prospect in a reasonable amount of time, you have a broken sales process. Marketing builds awareness and credibility, but sales pays the bills.
I recently sent an email to a business requesting some information. I received a reply almost immediately. I was thrilled by the response time until I opened the email. It said that my email was received and that someone would get back to me within two business days. Are you kidding me? This is simply not acceptable in today's fast-paced, always-connected, hypercompetitive business climate. This business is telling every new lead, "Please go away. We don't need your business. In fact, we can't handle what we have." This is one example of a poor sales process. Alienating a prospect before you ever have a shot at winning his business is not very smart.
Developing a great sales process isn't all that difficult. But it does take some focus and effort. Let's look at some of the components of the sales process.
Tips to improve selling skills
- Focus on uncovering the prospect's needs. Keep in mind your prospect will rarely state his deepest needs. It's your job to draw them out.
- Ask questions. The most effective sales people ask a lot of questions, and do very little talking.
- Sell, don't tell. Nobody cares what you know until they know you care.
- Invest in relationship-building. Relationships matter more today than ever before.
- Don't waste time on unqualified prospects. The most effective sales people spend more time with prospects, qualifying and building relationships. They bid much less, but close much more.
- Don't focus on price. There will always be someone cheaper than you. Sales people who complain
about losing bids on the basis of price are simply being outsold.
- Get face to face. It's always best to present your proposal in person.
- If someone isn't willing to meet with you, does he really plan to hire you, or does he just want your numbers?
- Win the face-off. Someone will control the sales (buying) process.
- Don't let it be your prospect.
- Sell constantly. Be prepared at all times with your introduction, business cards, a pen, notepad, etc.
- Say thank you and keep in touch. Don't ignore new customers after the sale is made.
This is a rookie mistake and will result in low customer retention.
Set a goal
Establishing sales goals is a logical place to start. Goals should align with your long-term vision and three- to five-year plan. Many businesses lack both vision and plans. Without these in place, it's almost impossible to establish a reasonable sales goal or to communicate the importance of achieving the goal.
Sales goals should be established for each market segment and service line. For example, a contractor who provides landscape construction services for both commercial and residential market segments may project an increase in one segment and a decrease in the other. By establishing sales goals for each market segment, the business will be able to target its sales and marketing efforts toward the growth areas and fine-tune its messages for each segment.
Own the goal
Accountability for results is next. Specific people in your business must be accountable for sales results. Results must be tracked, reported, and compared to goals on a daily or weekly basis. If nobody is specifically accountable for sales results, there will either be finger-pointing and arguing when sales results don't materialize, or you may become complacent.
Create a carrot
Incentives are another important component in a great sales process. Owners obviously have an incentive to sell, but what about non-owners? If a salesperson's incentive to sell is to keep his job, fear is the incentive. Fear is definitely a powerful incentive and may work for the short-term, but it will ultimately push your best people out the door as soon as a better opportunity comes along. Nobody likes to work in a fear-based environment.
Creating an incentive plan for salespeople requires effort, but it can be done quickly and simply. In my experience, many businesses over-engineer compensation plans, creating an unnecessary administrative burden. Incentives may be financial in nature or non-financial. Keep in mind that some of the most powerful incentives, such as recognition among peers, are non-financial.
Process is key
With goals, accountabilities, and incentives in place, the next step is to define the steps that will occur in your sales process, from the initial contact to the renewing of the business. These steps will need to be created for each market segment since the buyers are different in each segment. If you sell to multiple market segments, you'll need multiple sales processes. This is one of the drawbacks to diversification.
As you develop these sales steps, think about what has been successful in the past. How did you land that most recent customer? Whatever it was, it would be smart to incorporate these steps into your sales process. There's a rule in sales: If something works, keep doing it.
Let's pretend you landed the new customer through a referral from an existing customer—someone you play hockey with every Thursday evening. Once you were referred, you met the prospect for lunch at a nice restaurant. Since this meeting went well, you invited the prospect to visit your facility. After this, you made a presentation at the prospect's office and signed the agreement. What can we learn from this?
In this example, your relationship with a customer made all the difference. A logical sales process for you would be to invest in relationship-building and learn how to ask for referrals. Inviting a prospect to visit your facility should be standard procedure from now on since this step made your prospect more comfortable. It might be wise to make your facility even more attractive and comfortable for prospects. You may want to invest in better presentation materials and skills.
Keep in mind that a shorter, less cumbersome sales process is generally better than a longer, more complicated one. In our previous example, was the lunch meeting necessary? If not, it should be removed. Fewer steps means a more efficient, less costly process.
By the numbers
Once the process is defined, tracking the progression of sales activity is vital. Going back to the previous example, you should be tracking the number and frequency of customer "touches" to build relationships, the number of referrals asked for, the number of referrals received, the number of facility visits, the number of presentations, and the number of sales. Tracking of these steps may be done by raw number, dollar value, or both.
With a good tracking system, you will always know what's in the sales pipeline. In addition, you'll always know the rate of success for each activity or step in the process. This closing rate for each step is an important number to calculate and track, as it will allow you to recognize the steps that need improvement. Your tracking system may be a manual system or you may utilize a software package – a customer relationship management program or module.
Bringing home the bacon doesn't just happen by itself. It takes a great sales process to make it happen.
Phil Harwood is the founder of Pro-Motion Consulting, helping landscape and snow contractors create healthy, profitable, and sustainable businesses. Visit www.pro-motionconsultingllc.com for more information.