3 Leading Indicators That Drive Sales

, , , , ,

Purchasing in the business–to–business environment has changed in the last few years.  Buyers are more critical, more informed, and more careful with their spends. Their focused budgets have eroded sales, which has caused sales organizations to become hyper vigilant on lagging indicators like revenue, sales-to-quota, and close ratios as a measure of success. However, lagging indicators only allow for post–mortem analysis. 

Conversely, leading indicators allow for course correction before targets are missed. Here are three leading indicators that can help you reach your revenue goals. 

  1. Opportunity Pipeline Value – This is a good, early quantitative indicator.  This ratio should mirror your close ratio.  Do you close 1 out of every 3 opportunities?  Then you need 3 times the dollar amount in qualified opportunities to make your annual quota plan.  
  2. Meeting Summary – This is the best qualitative measure I know. A meeting summary is a written communication between buyer and seller. When this is a customer-facing document, then important analysis can happen. Managers can see whether this is a qualified opportunity or not and if the sales person is spending the appropriate amount of time to move the sale along. Also, sales people tend not to exaggerate the size of the opportunity when it is discussed and reflected back to the customer, which makes the pipeline totals more accurate.   
  3. Implementation Plan – This is another auditable, qualitative checkpoint. A clearly communicated plan between buyer and seller, crafted while the opportunity is still being developed, shows commitment on both sides. First of all, it’s auditable. A manager can look at the plan and offer steps that have been missed and strategies to ensure closing. Also, the probability to close increases to 80% when the customer is involved with an implementation plan, thus making the opportunity pipeline numbers more reliable and concrete. 

Above all leading indicators, it is the auditable documents that track the communication between buyer and seller that provide the most accurate lens for the “crystal ball” that we call sales forecasting.  Let us help your organization create auditable documents and an improved focus on leading indicators.   

 

/by

Giving Buyers Permission to Buy

What does it mean to giver buyers permission to buy? Dictionary.com defines permission as “authorization granted to do something; formal consent.”

As a salesperson, you might not think you need to give buyers permission to buy. They are free to do what they want: buy or not buy, buy from you or buy from your competitor. Where does the concept of permission come in?

It’s not actually permission from you. It’s you as the salesperson helping the buyer to give themselves permission to make the purchase.

Buyers are often more sophisticated than sellers give them credit for. They are also more risk adverse and they will second guess their decisions. Simply stated, buyers are not going to buy until they are comfortable that they have all the information they need to make a good decision.

You as the salesperson can help them get to that point. Here are five ways you can help the buyer give themselves permission to buy from you by ensuring they believe they have all the information they need:

  1. Understand their needs. As you get to know the buyer, ask targeted questions that will help you really understand their needs and the problem they are trying to solve. Use active listening skills and repeat back to the buyer what you think they are saying so they know they are heard.
  1. Build trust. Buyers won’t buy from a salesperson they don’t trust. If a buyer senses the seller is genuinely interested in helping them address a need, he or she is much more receptive to sharing information when asked questions, as well as more likely to trust the salesperson. When a seller appears to be pressuring the buyer to make a decision, the buyer becomes wary of the seller’s intentions and may defer the decision or say no.
  1. Help buyer discover the solution themselves. By building trust and asking the right questions, you will be able to paint an accurate picture of how the buyer will use your product to solve their problem. They need to get to the “aha” moment when they can actually picture who will use the product and how.
  1. Establish value to overcome barriers. Buyers will have barriers based on value. They will do research online on their own to overcome enough of these barriers to be willing to engage in a conversation with a seller—and this conversation is critical. According to an article at com, “Forrester research indicates that the conversation with sales reps is still a strong source of buyer influence.” Once in the conversation, the seller must understand what the buyer perceives as value of the product and build more value on that basis to overcome additional barriers.
  1. The cost of NOT doing business today. There was a time when sellers were encouraged to close early and often. In today’s tight market place, this approach no longer works. Buyers are increasingly risk adverse and decision making has expanded to include a larger group of people. When a salesperson can help the buyer calculate how much waiting will cost them in a week’s time, a month’s time or a year’s time, that dollar value will help underscore the need to close quickly.

As a seller, you’re not the one granting permission to the buyer to buy. But you can help the buyer to give themselves this permission with these five tips.

zp8497586rq
/by

And What Did You Get In Return? Thoughts On Managing Buyers

They called you and asked for a quote. Or information, and a reference. And you had not spoken with them before, whether it was a customer (with a new key player), prospect or suspect.

What did you ask for in return? And what did you then receive?

The dynamic is so basic in sales that it is often skipped. Buyers ask sellers for something in the beginning, middle and end of the buying process, and what do we ask for in return?

Are we asking?

I know what you (the seller) wants. The business, be it the order, the opportunity, the account and/or the whole enchilada.

But it starts in the beginning; the negotiation that is. And how well do you set yourself up for success by staying on par with your buyer?

And what did you get in return?

/by

Understanding the 3 Phases of the Buyer’s Journey

Each of the engagements we have with our customers begins with a thorough understanding of their business objectives. We then back up and attempt to help our customers to identify how their customers get to them or if they initiate the contact. We delve into questions such as, what steps did the prospects that looked at their organization go through to get from interest to on–boarding?  

The concept of the buyer’s journey
There is a lot of noise in the sales enablement space today about mapping “the customer’s journey” and then aligning it to the sales process. This is hardly a new approach. It is a dust–off of a three–decade–old concept, decked out with fresh wrapping paper, buzzwords and a shiny bow to get companies to think more about customers than themselves and the products they sell. A dust-off yes, but still a useful approach if it helps sales teams to understand the phases of the buyer’s journey. 

In order to help our customers understand what is important to their customers, we rely on the research done by Neil Rackham. Rackham is the author of SPIN Selling. Rackham’s research yielded a chart that documents the three phases a buyer goes through, as well as what is important to the buyer in each of the phases. Much has been written about this research, and the use of the model has gone through adaptations when major innovative and market forces, such as the Internet, have entered the environment. But in general, the phases hold true.  

  • Phase 1 is called Solution Development. At this time, the main concern of the buyer is their needs, although we often replace the word “needs” with “business objectives.”  
  • Phase 2 is called the Evaluation. During this phase, the most important component to the buyer is proof: proof that your organization’s services and capabilities can match the buyer’s business objectives.  
  • Phase 3 is called Commitment. The most important component to the buyer when they are ready to commit, or make a decision, is risk. The risk comes from the uncertainty of knowing if their selection will do what was promised. This is especially true when moving from one competitor and another in the same industry.   

Note that price and cost are of course concerns for the buyer, but never are they the most important concern at any point in the sales cycle. Despite what you have heard about phrases like “sharpen your pencil,” or “give me your best and final,” price is rarely the final factor, and you’ll see it’s conspicuously absent from the three phases described above.    

Do you know which phase your buyer is in? 
It’s important to understand what phase your customer is in when you engage with them and make sure you identify what’s important to them. You also must recognize when different buyers are in different phases. For example, you could have three different buyers in an organization at different places along the buying phases spectrum.  

It is the sales person job to make sure that they cover all three of the buyers’ phases, regardless of where the buyer is on the initial contact. This is one of the reasons that proactive new business development is critical for sales people. If they can initiate the identification of a business objective, they will be in the driver’s seat to shape how that gets addressed, preferably in a specified solution that your competition can’t offer.    

An engaged sales process means knowing your buyer’s business objectives, offering them proof, and getting them to commit.  

/by

On Cycles: In Life, Sales and At The Zoo

, , , ,

On a recent field trip to the San Diego Zoo with my daughter Hannah (on my knee in the photo), the students, parent-chaperones and teachers went through an introductory one hour interactive session called the “Life Cycles Program”. We were all entertained by a great speaker who took us through the Four Steps in the Life Cycle ( birth, growth, maturity and decline), and the children were then allowed to pet a blue skink lizard that was shedding his skin as part of the phase 2 growth step that he was going through.

Shortly after this, we went on with our excursion through the magnificent park, and happened upon one of the displays where the giraffes live. Several of the zoo employees were corralling us to the side to let us know that an amazing event was unfolding: a mother giraffe was in the midst of giving birth to her calf! Alas, the first step of the Life Cycle was upon us. We were all excited, and asked to keep as quiet as possible as to not disturb this process (good luck on that with a group of 36 eight year olds!).

Cycles are also prevalent in business. There’s the product cycle, the sales cycle, buying cycle, etc. One of the most rewarding components in my career is watching a sales person, Manager, VP of Sales or Executive “get it” when I am bringing a new perspective to them and their team. With the “birth” of a new idea, many see an enhanced way of representing their organization to prospects and existing customers, and the results do follow.  And the primary vantage point that we strive to help our customers to adopt is one from the perspective of their customers. It is not, and never has been about the seller and/or his product, service or organization. It is about the customer, and if you do not understand what motivates them to want to use what you are selling, very little will ultimately happen.

We discuss the importance of matching your sales process with your customer’s buying cycle, as many leaders of Sales organizations confuse the term sales cycle with the important steps they go through during opportunity development. Be careful; it’s not about you as mentioned above! It is important to take the step back and identify if your customer or prospect is in the Solution Development, Evaluation or Commitment phase of their buying cycle. Only then can you determine how to match up your sales process to facilitate the buying process.

The skink sheds his skin as a natural part of its growth phase. How have you and your sales team adapted to the ever changing landscape between buyers and sellers? Mother Nature will move us along in the Life Cycle, whether we like it or not. Be sure to make sure that your buyer’s cycle is one that you are a part of, not one that you are on the outside looking in. Oh, and yes, the mother giraffe gave birth to a healthy calf, and both are doing well. Some of the questions by the 2nd graders on the bus ride back to school still have me perplexed, but that’s alright.

Flannery Sales Systems – We help you drive revenue through sales process.

/by