I recently read an article on what sales people should be accomplishing with their sales “funnel”. It advocated making fifty calls to get ten appointments so you can do five quotes to make one sale. It was everything I could do to not tear the page from the magazine all while thinking “are you kidding me?” Since when do we advocate a 2% close ratio on prospective clients?
Having been a sales coach for over a decade, I’ve come to understand the dynamics of what successful sales people have in common. One of their shared characteristics is the fact that they spend as much time understanding the sales they didn’t close as those they did. They already have a good grasp on why they’re successful and they struggle trying to figure out what they could have done differently with those that “got away”.
The process from leads to sales has a number of levels – each with their own unique characteristics that need to be acknowledged and optimized to improve bottom line success. After a list of possible leads has been compiled and communicated with, those leads begin a filtration process of
Response Rate – when a 100 leads are contacted, how many take the time to respond? When I work with a direct mailing division, we felt a “creative” was successful if 1.5% of the people responded. That “standard” was applied because of a litany of factors including the fact that the people we were mailing them to didn’t know us, it wasn’t the “time to buy”, no need for the product and no relationship with us. Improving any or all of those factors would have a dramatic, positive impact on the response rate
Quote Rate – once a lead responds to the communication they receive, how many of those translate to the level of their agreeing to have us providing a quote for them? Much of this depends on the difference between the communication they received and the experience they have once they contact us. Personal interaction that is consistent with the print or electronic lead that encouraged them to reach out to you is a critical factor when it comes to improving this component
Close Rate – without a doubt the most critical and skill intensive component of “making the sale” – due mainly to the multi-faceted interaction necessary. Most sales people believe that the application of their personal skills during the initial interaction is enough to “close the deal” during that call and, if it doesn’t happen, it just wasn’t “meant to be” or they “really weren’t interested in the first place”. This attitude causes them to neglect the critical aspect of effective and systematic follow-up with leads that have been quoted and not sold. Focus on improving this skill set will help not only to increase the percentage of leads closed, but is a valuable lesson for the retention of current clients who may go months or years without hearing from you after the sale
In our house, kitchen utensils are divided into drawers with those we use all the time and others that are only used on special occasions. If you’re looking for the funnel, you’ll find it in the latter. Rather than having a “special tool” that takes large amounts of leads and makes the assumption that a smaller amount is the best that can be expected from the other end, why not take the time to build a pipeline that has a steady flow running through a consistent process with an anticipated outcome?
One Size Fits Most
While shopping in one of the local big box stores, I came across a bin advertising a special on work gloves. Before I bought the multi-pack of gloves, I wanted to make sure that they would comfortably fit my XL hands. When I looked for the typical size marker on the package, I began to laugh involuntarily as I came across the claim that “One Size Fits Most”!
My reaction was based in part on my history as a “larger than normal” adult who has become experientially desensitized to the claim that “One Size Fits All”. It evokes the same reaction from me when I see petite individuals wearing clothes that have a prominent “XL” imprinted on them when they are clearly wearing a small / medium! At the very least I could appreciate the honesty in their advertisement.
“One Size Fits Most” also made me consider the sales process that most clients encounter. The typical salesperson has a specific, usually homogenous, product to sell and spends the minimal time possible attempting to determine what the potential clients’ needs are. Although they would never say it out loud, they typically enter the sales process with a belief that “one size fits most” and then wonder why their success in closing sales is not what they’d like it to be.
Rather than simply “appealing to the masses”, why not incorporate elements that will “differentiate to the disenfranchised” as a way of improving your process and overall sales skills? Who knows? You may end up finding that it fits like a glove!
Time IS Money
A mentor of mine once said that, whenever you walk into a business, always remember the “2 W’s” – Watches and Wallets. He pointed out that, when talking to the owners you need to be able to speak to reducing expenses and / or increasing revenues, so talk to their Wallets. When speaking with the employees of the business, they always wish they had more time, so always need to speak to their Watches. Time and money – two of the most important components in any business.
On a weekly basis I come in contact with agencies that hesitate incorporating an agency management system in the operation of their businesses. The most common objection is either that they “don’t have the money” or they’re not “big enough” to have a system yet. Each of these responses are counter intuitive to the “2 W’s” for the following reasons
Don’t Have the Money – when considering the cost of an agency management system, you have to balance the expense of activities resulting from not having one. The time spent collecting info on client activities –endorsements, new business, renewals or cancellations – from each of the companies you represent has a monetary value when it comes to staff salaries, paper and printing costs as well as office space to house the printed material. With one of my clients, the daily cost of all of these activities was enough to cover the monthly expense of their system!
Not “Big Enough” Yet – several of my clients are either “just starting” in the business or are “converts” from one of the captive companies. In many cases they have currently have fewer than 100 clients and find themselves struggling to find enough time and / or revenue. The one question that I ask them to consider is, “with so few clients, how many of them can you afford to lose?” When the agency has to spend an inordinate amount of time in non-revenue generating activities, clients needs for upselling, cross selling and renewal reviews can get overlooked. This leads to a downward process spiral where the agency has to spend a significant amount of time quoting leads to replace neglected clients
The understanding that “Time Is Money” is critical when it comes to successful operation of any small business. While each of the above is cause enough to justify the expense of a system, the missing factor is the opportunity cost of not having a system to manage your agency. The ability to generate additional revenue from cross selling current clients, the ease of communicating with current clients or the soliciting of new clients through lead programs are all opportunities for generating additional revenue that an agency management system can make a significant contribution to your agency’s ability to save time and increase revenue.