Turbo-charge sales. Shorten the sales cycle! #CRO-PlayBook
We have been pitching our offerings to a manufacturing-based company in India. It’s a public limited company and we really wanted that deal, badly. This lead was referred to us by an existing client who was very happy with our offerings.
The prospective company has already bought a similar offering from a competitor a few years back. But was not happy with it. They were actively exploring new vendors. So we went and met them. All thing went well. We fancied our chances to win the deal.
Over next 6 months, we did 9 meetings, each lasting at least 3 hours. They met our customer success team, IT team, domain experts etc. So a given meeting had at least 3 people from our side. Post this, we were even more confident that we won’t lose this deal to anyone else. Afterall, why would client spend so much of their time with us?
After the 9th meeting, they mentioned that they were busy with the board meeting, and would get back to us 2 weeks later. When we connected them after a couple of weeks, they said they need two more weeks. They took two months. Then they informed us that we will take this up in the quarter after the next. And then the next financial year. At the start of the next financial year, they told us that they have shelved this initiative. Later we got to know that they are hiring a new resource to run the old system.
We get such clients once in a while. 1% of our SQLs (Sales Qualified Leads) - to be specific. But there are a lot of clients which do multiple meetings and don't result in the deal. So we pulled out our data and analyzed the number of sales hour wasted pursuing clients which would never buy from us. We tried to analyze if there are any common factors among such clients and if we can come out with an algorithm which credibly predicts which deals are unlikely to get converted. We found some interesting trends.
E.g. Counter-intuitive as it may sound –
the probability of success actually declined once we started having more than 5 meetings with the client.
The median value of the number of meetings needed to close the deal was 4. We didn’t realize it when we were actually doing it. But the data analytics revealed it well.
In an industry and internal system, where your marketing team generates enough SQLs, we need to be prudent about investing time on the client which are more likely to result in a deal. The opportunity cost not pursuing stronger prospects is very high.
So we did our math and predicted that we could achieve 30% more revenue with the same. We put together our lead scoring engine to qualify the lead more scientifically. If I get a chance I will write more about it in a separate blog. We also realized that accelerating the further qualification of leads (Sales Accepted Leads) could also save a lot of our time. The earlier we went into the next stage, the earlier we could disqualify, or for the interested clients, we could provide better attention. This blog is about how we evolved methodologies that helped us cut the sales cycle and improve our chances of closing the deal successfully. It not only helped us but brought benefits to the client. Here is my insight followed up by three steps.
3 Action points to shorten the sales cycle:
#1: Record the sales data, analyse it and implement learnings. Do this in over and oever again.
#3: Achieve more in a meeting and in less number of meetings
Data & Analytics
For me, the improvement in the sales, marketing and customer success team happens in a continuous cycle of three steps: Capture data, analyze and improve. You need to figure out dynamics of your space all by yourself. Needless to say, you need a good CRM and related automation (lead scoring automation, lead generation automation etc). In my initial years, we didn't have a CRM. We started maintaining following data manually.
- Meeting date, time of the day. Yes, even that helps. E.g. We realized that 50% of all meetings happen on Tuesday and Wednesday.
- Who represented us during the meeting. Often it helps to have 2 salespeople to attend Crucial meetings. E.g. when multiple stakeholders (and seniors) from client attend the meeting. (So make sure that you get this information before the meeting. I have been surprised on this count multiple times. E.g. The salesperson turns up alone and there are 15 people from the client side.) Often during difficult negotiations, it helps to have two salespeople.
- The stage of the meeting: For every meeting we attend, we document how many meetings we have already done and what stage of sales cycles we are at.
- We looked at our successful deal closures of the past. We replayed that in our minds and tried to capture various variables that were common in each deal closure process: industry sector, company size, the role of the key decision makers, average response time to emails, etc. The resulting list of common variables gave us further parameters of the qualification framework.
- We analyze which client meetings ultimately yielded a business (and how many meetings it took, spread over what time span, how many cumulative salesperson-hours were invested in meetings etc.). Such data helps us with the unit economics of the sales process.
Each meeting cost us around 1% of the average deal value. In other words, 10 meetings would shave off 10% from your bottom line.
For a deal that eventually closed, we ended up doing two meetings for deals which didn't.
You’ll succeed in this game based on where you spend our time, and where you don’t.
In the first year, my team spent about twice as much time meeting clients who didn't close the deal than the clients who did.
The % of total pipeline deals that you actually close, has a strong lag effect of how well you qualify the leads. We started with BANT to qualify the leads, although it has its challenges. But it worked well to initiate the team. Along the way, we brought in qualification factor that is peculiar to our business. E.g. the revenue of the client was a useful criterion.
We also have a few more budgeting criteria such as the revenue of the prospect. Our offerings are best suited for a company about certain revenue numbers. So slowly over the period of time, we have evolved our own objective framework to maximize our chances of qualifying the right leads.
A part of qualification process is to find out things that clients are not very happy to share. E.g. the budget. We have developed a way to enhance our chances of getting an idea of the budget. So instead of asking "What's your budget", we ask "Our clients in the similar industry tend to spend $ XYZ on the offering .... is it in line with your expectations?" The answer to that is binary and hence more likely to come by. Yes, some clients get a bit surprised by that. But they also appreciate that your bandwidth is limited. Many times, I find my salespeople are nervous about asking this direct questions. So we always practice such conversation through a role play. Try it with your team. It works!
We also consistently look at non-intuitive qualification criteria through correlation analysis of the data. E.g. if they have made purchases in related areas. Automation platforms such as Datanyze help you to do that.
Yes, it's a bit different than Qualify. As you get engaged with the prospects, you need to take a data-driven view on whether the deal is going to get closed in the given sales cycle or the next. If not, then disqualify them. Rather than having them take up space in the pipeline. The idea is to maximize your time spent on the deals that are going to close. I understand that there is a good likelihood that some such 'disqualified deals' would close the next sales cycle. This will help you to invest more time, skills and resources to sell to the ones more likely to close and, thereby shortening your cycle. So just as you data mine the old deals to find good qualification criteria, also find good disqualifying criteria. Look at which clients said 'No" and which were indecisive. Try to identify the pattern to catch of those early. E.g. for us, the absence of CFO in the first two meeting had a significant correlation to the deal not getting closed.
(But the interest of non-closer deals can be revived later when they ripe for closure. Needless to say that you need to have enough in your pipeline to pursue the next prospect.)
Achieve more in a meeting and in less number of meetings
I talked about getting direct with the client about the budget to save her and your time. It doesn't stop there at the qualifying stage. You need to look for time wastage at every stage of the buying stage and find a way to proactively cut that. This doesn't mean that you find shortcuts and ways to annoy client by pushing her too much.
Pre-prepare a proposal before you go for a meeting:
Our clients took a long time to scope the deal. In some cases they took weeks. So before the meetings, I started pre-empting the scope based on the public domain information and the experience of working with the companies in the same industry segment. I put that scope on the slide. This helped the decision makers realize they don't have the information needed to give me the scope. This dramatically reduced the lead time to go to the next stage.
Once this showed good result, we took a step forward. We actually made a proposal (and a legal agreement) before going to the meeting, based on our assumptions. This helped us frame all important questions to fill the blanks and tally the assumption. Post the meeting we sent the proposal much before our 24-hour deadline. This further decreased the sales cycle time. In addition to speeding up feedback loops, this has the extra benefit of building a client’s investment in the ultimate final proposal, keeping both parties tightly aligned throughout the cycle.
It’s critical that the first version get put together within 24 hours of your first meeting, and that you’ve been clear with the client upfront that you’re going to send them something very rough with the express purpose of getting feedback. We request client for a 20-minutes meeting the next day. That saves a lot of time and works very well.
Don't undermine the importance of in-person meeting:
As we have more inside salespeople, as we have better video conferencing tools and higher pressures to close the deals faster, we all make the mistake of undervaluing face-to-face meetings early on. I have come to realize that it actually is counter-productive. We end up selling faster and better if we make that investment of time and money to get in the same room with clients.
“We assume digital is fast and better, but we miss so much of human communication when we can’t see each other — the body language, the attention being given,” he says. “On top of that, traveling to be there in person is a massive demonstration to the client of how important they are.”
Even though travel takes time, being in person can drastically reduce the number of meetings needed, because you get to a place of mutual understanding and trust faster.
Of course, we are even more careful to make sure the lead is well-qualified before proposing an in-person meeting. Once a client (a large professional services and IT company) pushed back and said they can do it over the phone. But we insisted: If it’s all the same to you and you’ll be in the office anyway, we’d like to talk face-to-face.
Map out the whole sales cycle
Mapping the whole buying process is one of the most effective ways to ensure that the sales cycle doesn’t elongate for avoidable reasons like connecting with all of the stakeholders, agreeing to legal terms, and revising terms and conditions.
As mentioned above, this map of the buyer’s journey is not just for the sales rep ‒ it should be shared and discussed with the prospect as well. This allows reps to get to the “if this, then that” place that helps them achieve MANA and ensure that they really know where they stand with the prospect and can accurately forecast when the buying process will be over.
Sales reps who follow these steps will find that they not only help reduce the length of their sales cycle, but also provide them with a much better and predictable understanding of their own sales process. Most sales reps focus time and energy on improving the very sales-specific parts of their job ‒ sharpening elevator pitches, honing closing skills, bolstering rapport-building techniques ‒ but the truth is that investing in strengthening the project management aspect of inside sales may have the most profound impact on their success.
We lay out a detailed timeline outlining each step with customers — typically on a single slide with color-coded line items showing who is responsible for what. His team tries to get clients to explicitly confirm their acceptance of that plan. Even if they don’t end up sticking to it exactly, it still establishes a shared understanding of what’s about to happen, and the clearer it is the faster things go.
Relatedly, sales reps can easily reduce the length of their sales cycle by getting prospects to commit to a timeline as early as possible. Again, they shouldn’t push it to the breaking point and force prospects into an agreement against their will, but they can always ask the right questions to get a pretty accurate idea of when a prospect thinks the process can end, assuming everything else goes as planned.