Close More Deals, Grow Your Business: The Sales Process
“We need sales training” is a comment expressed by many business owners who feel frustrated that their company is not realizing its full growth potential. Many times this comment is rooted in a frustration caused by gaps in the existing sales process that impede profitable growth. The lack of an effective sales process is one of the top challenges for many entrepreneurs trying to grow a profitable business.
There are many different variations of sales processes. Most companies have some level of sales process in place, but the question should be: “Is the sales process comprehensive enough to enable the business to realize its full growth potential?” In many cases the answer is “No.” Many times even companies with sophisticated CRM systems have major gaps in the sales process which make it difficult to recoup their investment in such costly CRM software.
The cost of having compelling gaps in the sales process is significant. The end result is the loss of key opportunities, clients, and market share to your competitors, or on the other end of the spectrum, winning business that is unprofitable. The latter could thrust you into the Deceptive Busyness℠ Trap.
Assessing the effectiveness of a sales process requires more than looking at key results measurements such as sales revenue growth and close ratios. When working to grow a profitable business, more strategic considerations come into play. This is not always an easy assessment to make, but, below are a few select questions to consider when making your assessment:
- Does the organization truly know its clients?
Does the company have a good understanding of their clients or potential clients? This knowledge includes understanding their pain, growth opportunities, economics (even if at a macro level), decision making process, and a wide range of other factors. Only when you understand this information well can you deliver an effective value proposition. If you don’t truly know your clients, then likely your sales organization is tossing value propositions against the proverbial wall with the hope that something will stick.
- Does the organization understand the end markets?
Is there a good understanding of the size, clients, and makeup of the markets in which the company participates? Which markets best fit the products or services that are offered? Why? Where is the biggest growth opportunity, or the most profitable opportunity? What market trends could impact the future (both positively and negatively)?
- Does the sales process provide critical information for formulating pricing strategy?
What value (in dollars $$$) does the product or service offered generate for the client? In what ways is it unique compared to your competitors? When asked to meet a lower price, are the competitive prices on a comparable basis (apples to apples)? Based on the unique value that the product or service generates for the client, can a premium price b charged? Is value-based pricing being used?
- Is there a good understand of the competitive landscape?
Are clients asked direct and pertinent questions about the competition on a regular basis? Is there sufficient internal information to do a thorough strategic analysis of the competition?
Difficulty in answering these questions might suggest that there are meaningful gaps in the sales process.
In addition to the obvious negative impact on sales, meaningful gaps in the sales process can have other strategic implications. The lack of information related to market trends and the competitive landscape can result in devastating blows to the business. These gaps will impact the strategic direction of the company, its market position, new product development, pricing strategy, and more.
One client saw an 80% reduction in sales over three years in one of their major product lines as a result of not being fully aware of the rate of adoption of a new, disruptive technology. Had a more comprehensive sales process been in place, this critical information would have emerged sooner and allowed them to develop a strategy to compensate for the disruptive change.
A comprehensive sales process will have elements of management oversight, strategic and tactical planning, and a formalized sales methodology. An important part of the process design is to ensure that it is both effective and efficient, and that the process serves the organization and not vice versa. A good process also allows for a higher degree of transparency within the sales organization, consistency in execution, and accountability. It also serves as an excellent training tool for new sales representatives and others.
A comprehensive sales process provides a framework for the sales organization to effectively and efficiently execute the sales strategy and help the company gain an intimate understanding of clients, markets, and competition. This information will provide the basis for market strategy, new product or service development, pricing strategy, and other key factors that enable the business to reach its full potential.