Does your business experience feast or famine when it comes to sales? If the answer is yes, you're not alone. "Many businesses are vulnerable to dramatic swings in sales because they need to improve how they manage their sales pipeline," says BDC Vice President and District Manager Nigel Robertson. "From the time you generate a lead to the moment you close your sale, you have to be very rigorous about your sales processes," he emphasizes. Robertson shares some pointers on how entrepreneurs can drive more consistent sales and grow their businesses.
Be systematic about generating leads
The first step is to ensure that your company systematically generates sufficient leads to keep enough business in the pipeline. "You need to have specific targets in mind for how many prospects should be in the funnel at any given time," he explains. "Too many entrepreneurs get caught up in daily firefighting and ignore the fact that they have to think about where business is coming from down the road," he says.
For Robertson, it's a question of efficient time management. "Before you start your week, it's a good idea to plan the number of appointments you intend to secure. If you're not always scheduling sales meetings with your clients then you risk finding yourself in a state of famine," he believes. "Generating leads is not necessarily the easiest part of your job but it's a necessity if you want to drive consistent sales," he emphasizes.
Know your sales cycle
Depending on the type of business you're in, you also have a specific sales cycle, which is basically the time that elapses between an initial meeting with a client and the day the deal closes. "This can vary greatly from one company to the next. But you need to understand exactly how much time it takes you on average, measured in weeks or months," he says.
To get this number, Robertson recommends that entrepreneurs make a list of their 20 most recent closed sales transactions, jot down how long each took and then compute the average. Entrepreneurs can also consider using Customer Relationship Management (CRM) technology, which can help business owners get a better picture of their sales pipeline, determine top clients or target specific groups. If CRM technology is not within your budget, Robertson believes that entrepreneurs can still apply the basic principles. "What's important is that you can see exactly what's speeding-up or slowing-down the transaction. That allows you to make adjustments and train employees to improve on specific steps of the sales process," he adds.
Know your numbers
Every company has a specific number of prospects needed in order to generate and maintain sufficient sales, says Robertson. "Do some basic math first. Look at the number of closed transactions desired per month and the average sales cycle. The figures don't lie. They will help you set targets for your company," he stresses. "Take for example if you want to sell 3 items per month and you know that it takes an average of 4 months in the sales cycle. You've also concluded perhaps that for every 4 prospects you reach, you generate one sale, which suggests your close ratio is 25%. In the end, you now know that at any given time, you'll need 48 prospects in your sales cycle. (That's because you multiply 3 desired closes per 4 months average sell cycle and then divide that by 25%, which will give you 48.) So as long as you maintain 48 active leads at anyone point in time, you can be confident you will close 3 transactions per month. It's that simple. If you decide one day to increase your monthly output to 4 closed transactions than it follows that you will need to maintain a list of 64 active prospects, and so on."
Armed with this knowledge, entrepreneurs can also set specific targets for different team members. "It's a fair and productive way of clearly setting your expectations and customizing goals for each employee. Rather than telling people in your company that they simply have to do 'more', you're able to set real targets based on their history of performance," he says.
Actively seek referrals
A rule of thumb for any business is to get referrals from satisfied clients. Robertson, however, believes that entrepreneurs can avoid the "awkward moments of actually asking your clients directly for referrals. That can be a little embarrassing sometimes. Don't make your prospects do the heavy lifting for you," he emphasizes. As an alternative, he suggests business owners encourage their clients to first talk about their customers and suppliers, which he calls the "snowballing effect. Once you identify a potential client during a conversation, you could say: would it be alright if I gave Tom a call and mentioned that we spoke." When you reach that client, Robertson suggests this type of wording: My name is John and I was speaking with Robert who thought it would be a good idea for us to get together. How about next Tuesday?" This subtle name-dropping lends you borrowed credibility and converts what would have otherwise been a cold call into a warm call, he says.
Focus on securing appointments
Although it seems very basic, Robertson believes that entrepreneurs have to focus more on getting appointments when making calls. "If you're calling people, don't do the sales pitch on the phone. Keep it simple and try to secure that necessary meeting first," he suggests. "Focus just on getting the appointment. Prospects are turned off if you take too much time on the telephone, especially in the initial call. Suggest a meeting time and be prompt about it." Equally important, says Robertson, is getting that second meeting once you've had the first contact. "You want that client to have you in their calendar. Always securing a next step advances you ever closer to a closed sale."
Get ready for objections
Robertson strongly recommends that business owners should also prepare for "common objections, particularly with cold calls." Typical negative responses can be:
- I'm dealing with somebody else
- I'm too busy
- This isn't a good time
- Send me material first and we'll talk later
If you're not prepared with clear answers, he says, you'll lose the prospect's interest. "Practice exactly what you're going to say in response. It's important to acknowledge their objections and then try to reframe it in a positive light," he stresses. He suggests using the "feel, felt, found" method. For example, if a client says, 'Your prices are too high' then your response could be 'I understand how you feel. Many of my other clients have felt the same way. But what they eventually found was that my product allowed them to add 10% to their gross margin."
Follow-up and listen
Building a strong relationship with clients today is crucial to maintain consistent sales, he adds. "You have to show them that they are not just a business transaction. Always take a proactive approach in meetings with clients and take notes," he says. "A pen and paper are very powerful tools in sales. Prospects will open up when they see that you're taking the time to listen and write down what they are saying."
Finally, if your client has concerns about your business performance, always come back with a "solution that will blow them out of the water! It's all about making sure that they will come back," he concludes.
