We noticed a 71% increase in sales in the first quarter of 2015. Among many reasons for that, optimising our sales cycle played the biggest part in the increase.
Hiring more salespeople and generating more leads are ways to increase sales at your company – but not the only ones.
If your team is stalling, deals take more time than they should, it usually means that unnecessary tasks clutter your team’s workflow. Or they’re not sure of what they should be doing – either way, optimising your sales cycle will eliminate this problem.
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Why? Sales cycle optimisation leads to an increase in sales
Even though there are plenty of tools and guides for salespeople to optimise sales, I think most still don’t do it because they don’t know WHY they should do it.
The reason is that optimising your sales cycle can increase sales (71% quarter-to-quarter in our case), and make your sales team much happier with the amount of everyday work they have (and happier teams are more productive).
For us, optimising the sales cycle meant making it:
When it takes 2 weeks instead of 2 months to close a deal, a salesperson can run about 400% more deals in a year.
Getting rid of friction helps avoiding leaks in the pipeline. Ugh…
*without buzzwords* Potential clients often drop-out of negotations. It can happen for various reasons, but it’s possible to map-out your sales process and find places where the so-called “friction” occurs.
In other words – find the causes of drop-outs (dig deep if you have to, ask your team, try to talk to potential clients you’ve lost) and eliminate them swiftly.
The most basic automation that most companies in the tech industry have is a CRM – Customer Relationship Management software.
They aren’t only for salespeople, depending on your business account managers, project managers, salespeople or marketers could benefit from software like this.
There are several tools and plug-ins purely for salespeople out there. But picking the right tools depends purely on your needs. Start with a CRM if you don’t have one. Learn to use it, teach your team how to use it, only then start thinking about other tools.
Once you get a potential client that’s interested (a “sales lead”), there are certain things you can do to improve the lead to conversion ratio – in other words, the number of potential clients that become paying clients.
That involves improving your lead qualification process. It’s super helpful to have a savvy process for qualifying leads as soon as possible.
This way you can avoid situations where you work your ass off just to hear “Great, but that’s not what I was looking for anyways, just curious” after 14 long discussions and a s*tload of following-up in an 8 week-long sales cycle.
How EXACTLY can you improve your sales cycle? 6 steps
- Map every activity over the course of the whole cycle (especially little stuff like CRM data entry). Whiteboards are your best friend here.
- Get rid of pointless activities. Let go of as many as you can, leave the critical ones. If you want to manage 1000 leads per year, saving 10 minutes per lead gives you an extra work week. Free vacation doesn’t grow on trees. For example: after you run a demo, you don’t need to do a CRM entry based on your notes. Send a summary and/or offer, and enter data into the CRM later not to end up doing it twice.
- Pick repeatable actions and automate them. For example: salespeople send many agreements and offers. We did a universal PDF offer, so we put personalized information in the e-mail, as opposed to re-doing the offer for each client.
- Set up a lead qualification process. You need to reach a definite answer as quickly as possible – “no”, ”yes”, „not now”. Think of it like this – don’t focus on getting a “Yes”, but on getting the “No’s” out of the way fast.
This frees you up to pursue deals that might actually convert. One of the biggest rookie mistakes is not asking the right questions from the start (“Is this something you have a problem with?”, “Have you looked for a solution to this problem before?”).
Not doing it is a great way to spend your time talking to people that won’t become your clients.
Personally, I use a classic BANT approach with a little twist:
- Budget – do they have enough money to buy?
- Authority – can they make a decision on their own?
- Need – do they have a need that you can satisfy?
- Timescale – are they waiting for the right time to make their purchase?
- Twist – are they like my successful clients?
Answer these questions before the first meeting is over. If the BANT adds up, and they’re like your other successfull clients – give it all you’ve got. 15
follow-ups to get a response? No biggie!
- Focus – It’s my firm belief that you can’t push more than 10 deals simultaneously, it requires too much time and brain capacity. However that is if you handle smaller transactions. If you are a VC partner who wants a multi-million dollar exit then that number is way lower – you will not be able to handle 10 big and complex transactions at once. Close more deals by focusing on smaller groups, closing fast and going after another batch of deals.
- Identify positive-action and drop-out triggers – if you follow the previous steps, you should get “yes’s” and “no’s” quickly. But what about the “maybe’s”? They give many reasons for not taking the deal, and you need to separate the real ones from the delusional ones. Once you notice the latter, you could tell the other person about it. This way you either get to the real reason, or remove the obstacle.
What we hear in action
- Waiting for an investment – do they have a term sheet? If not, it’ll take a long while and asking for estimates is a waste of time. In case of first investments, it might take ages and eventually won’t go through in most cases.
- Waiting for clients to pay – payment overdue more than 30 days are usually lost forever. Someone would have to be delusional not to realise that.
- Waiting for after-growth revenue to come in – growth costs money. When they give you a time after which their growth will pay-off enough to be able to afford the deal, multiply it by 2.
Waiting for a new X to join the team – in our case, we hear that potential clients need to hire more salespeople. It takes time to hire someone great. It costs serious cash to hire someone who is not. If it’s an executive they’re hiring, he’ll probably have a different opinion on this deal. In other words – this might be a lost case from the start. Our argument is – you don’t even need a salesperson to fully benefit from RightHello.
Potential clients might be afraid to say “no”, and they’ll keep saying “maybe” instead.
You can sense when they are dishonest (they don’t give straightforward answers, they miss calls, they’re meandering and never get to the point). Encourage them to decline the deal (try saying “I can take a “no”, that’s not a problem”).
Better to have a potential clients that doesn’t buy but refers you, than one that only prolongs the process for no reason.
Make your sales process smooth
- Turn on mobile e-mail notifications – respond in a matter of minutes, regardless of when they write you. They’re thinking of your email, your offer, the deal. Respond while it’s still on their minds, and your chances of success will grow amazingly. There were times that we’ve set up a demo, ran it and sent an offer in less than 60 minutes from getting a lead.
- Compare the conversion time of different leads – if you have different marketing channels, see which one generates leads that close the fastest. You want as many of these as you can get. Optimize your lead gen efforts around that channel (focus on those leads first, then include other channels).
- Start a newsletter and convert your CRM database into subscribers – it’s hard to get anyone to subscribe at the beginning, and your CRM is a great place to look for first followers. Invite leads from your CRM to join your newsletter.
A few additional performance hacks
- Show your Skype ID in your e-mail footer
- Use Calendly to very easily set-up meetings
- Implement an easier, faster and cheaper payment system
- Speed up the deal-signing process
To increase sales in your company, you need to optimise the sales cycle by making it:
There are several specific things you can do:
- Mapping each task within the cycle
- Getting rid of pointless tasks
- Automating repeatable tasks
- Improving lead qualification (BANT)
- Reducing the number of leads you work on at any given time
- Identyfing client’s action/drop-out triggers
71% is just a start. We’re heading for constant growth, and I bet you have high goals too. Sign-up to our 4-day email course to boost your company’s growth – Hacking Business Growth.