Whether 2017 was a tremendous or difficult year, sellers have now hit the reset button, likely starting the new year with more aggressive quotas to achieve. In diving into 2018, here are some keys to a strong year ahead.
1. Focus on quality, not just quantity, and try a new approach for securing opportunities.
The best leading indicator of future performance is the quality and quantity of opportunities in a seller’s pipeline.
Most sales organizations are increasingly reliant on inbound leads. If your reps are selling complex or expensive offerings, these leads are likely to:
- Provide entry points below key player levels
- Put them in contact with people who are interested in products but who don’t have budget
- Put them in contact with people who are concurrently evaluating several vendors in a given space
- Put them in contact with people who are unaware of the business results they can impact
- Yield a high percentage of “no decisions” and low close rates
- Represent quantity more than quality
It takes courage and initiative, but there is a way to start opportunities with key players that enables sellers to establish themselves as “column A” from the start with buyers who can find budgets for new initiatives. Key players don’t have time to visit websites and evaluate vendors, so many are unaware of the value and payback offerings your company can provide.
These buyers have latent needs, not for offerings (an erroneous assumption many sellers make) but rather for achieving desired business outcomes. Have reps review a prospect’s annual report to learn the company’s objectives and challenges and select a specific title and outcome that an offering could help it achieve.
Superior salespeople sell outcomes rather than offerings. These sellers pique senior executive interest by leading with relevant business goals or issues. Leading with offerings puts sellers out of alignment with key-player buyers who don’t have the time or interest to learn about products.
2. Remove the proposal skeletons.
Unlike fine red wine, proposals in your pipeline aren’t getting better with age. Many of the proposals more than 45 days old are likely to have “no decision” outcomes. There may be instances where prospects have chosen a competitor and haven’t given you the bad news.
Have sellers send a “snail mail” letter, with return receipt requested, to the highest level they’ve called on within the account. They should state in the letter how long the proposal has been outstanding, that they’ve not been updated on its status and that it is their intention to withdraw it if they don’t hear back from them.
The hope is that buyers will contact them and say there is still interest. If that’s the case, the seller can ask to revisit the opportunity (help facilitate a cost/benefit analysis) and see if they can make a revised recommendation. If the letter doesn’t elicit a response, they can safely remove it from their forecast. While it’s not the desired outcome, you’ll have the benefit of a more realistic view of the size and health of your pipeline.
3. Don’t forget about your customer base, and don’t be afraid to ask for referrals.
Sellers often believe if customers have additional needs, they’ll proactively contact them. Certainly, close rates can be expected to be higher when there is an existing relationship. Sellers should take a look at each client and try to determine potential business needs that can be addressed through the use of your offerings and proactively contact the key players who may be interested. The key to initiating add-on opportunities is taking executives from a latent to an active need for desired business outcomes.
Satisfied customers can be underused assets, especially if sellers can help them quantify results. It’s better for sellers to break down benefits and values specific to titles and outcomes that have been achieved through the use of your company’s offerings. Once quantified, sellers can ask if their customers know of any other individuals or companies that they could refer them to.
4. Don’t wait until you’re in front of the train. Always look a cycle ahead.
In going through a year on quota, many sellers who are not “year-to-date” (YTD) against their numbers feel they can close enough business in the last quarter. It’s very stressful, and there will be times that sellers run out of runway.
Instead, sellers should break their quota into monthly increments and multiply that number by the number of months in an average sales cycle. They can then estimate their close rates and set pipeline thresholds they should try to exceed. Once sellers are interviewing committee members, they can negotiate activities and time frames in a written document with buyers (I call this pipeline “E”). Here’s an example of how to project ahead:
- A seller has a $2.4 million quota ($200,000/month).
- Her average sales cycle is four months, and her close rate is 50 percent.
- Therefore, her E target is to close $800,000 or more every four months.
- At any time, if she is YTD or better, her E target is $1.6 million in her pipeline.
- In a given month, she must double any shortfall from YTD, add it to $1.6 million and ramp up her business development efforts.
Being aware of YTD performance and projecting a sales cycle ahead on a monthly basis can reduce stress levels at quarter and year end.
May 2018 be prosperous for you, and may these keys help your salespeople hit their numbers this year!