Bigger Sales Pipelines - The Dangerous Truth

Posted by Dave Kurlan on Mon, Apr 18, 2016 @ 16:04 PM

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I usually get notified when new sales studies are published and I'm asked to link to those reports from my Blog.

Last week I was invited to download the 2016 InsideSales.com Business Growth Index Report.  I read through it today and while I wasn't terribly surprised by anything, there were a few findings that are quite interesting, showing that some companies aren't making very good decisions, and these decisions could be representative of your company too.

The report showed that overall, pipelines are larger and that would generally be viewed as a positive. But it was no surprise that sales cycles are longer and win rates are lower.  The quality of leads was responsible for all three -  the larger pipelines, longer sales cycles and lower win rates.  In other words, companies were either raising the bar - they wanted better leads - or lowering the bar - they wanted more leads.  

It appears that in the case of better leads, better was defined as bigger companies with bigger opportunities, which increases the total value of the pipeline. Greater competition, a longer sales cycle and lower win rate are the obvious outcomes of that strategy.  

In the case of more leads, the number of opportunities in the pipeline increases.  Of course, more is the opposite of better and longer sales cycles and lower win rates are an obvious outcome of that strategy too.

My question is, do more opportunities, despite the lower win rates and longer sales cycle, translate to better revenue growth?  

The reality is that pipelines should not simply get bigger!  If we know the annual revenue goal, closing percentage and average deal size for every salesperson, then we know exactly how many opportunities must be in each stage of the pipeline at any moment in time.  When we know that, it's all about effective targeting and scoring.  Last week I spent a half day helping a company nail their scoring mechanism.  If you get that right, you'll know not only whether an opportunity qualifies to be in the pipeline, but whether it should be pursued, assigned resources, and quoted.  When companies choose to simply put more in, it's usually because they already have too many of the wrong opportunities in the pipeline.

There were some findings around technology usage.  It showed that in 20% of the cases, the competitive edge could be attributed to technology with the biggest three examples being CRM, Sales Intelligence and Sales Presentation tools.  But even with CRM showing the most widespread usage, only 45% attributed their competitive edge to CRM.

Speaking of CRM, it seems that the data for this analysis came from CRM, so I assume they were mining Salesforce.com data from multiple companies and industries.  With so many executives complaining that their salespeople hate using Salesforce.com, and with sales managers having to hound their salespeople to keep the data current, it raises questions about the accuracy of the length of the sales cycle.  Many salespeople delay entering data until an opportunity is well underway, while others delay entering their follow-up and follow-through, including when they have closed the sale!  These issues cause sales cycles to be represented as both artificially short and long!  We could give them the benefit of the doubt and suggest that it evens out...

The authors grouped findings by company size -  smaller than and larger than $1 billion; but only 11% of the respondents were from the larger companies.  Another thing that might have skewed their findings is that 60% of the respondents were from software and business services companies.  While those industries are certainly hot right now, the lack of balance hides what might really be taking place.  If pipelines are bigger, sales cycles longer and win rates lower, what do you suppose those three metrics look like in the not-so-hot industries?

Well it's not what you might think!  Win rates went down in both tech and non-tech, but they dropped by 100% more in the tech segment.  Wow!  See, that's how some would report this finding - by dramatizing it - when the reality is that win rates dropped by 2.1% in non-tech and 4.7% in tech.  Also surprising is that the increase in the number of new opportunities was 10.8% in tech but 18.3% in non-tech.  To my thinking, it's the rest of the world catching up with the tech and finally getting with the program!

All of these findings are nice to know, but in your company, it comes down to two things.  Let's assume that your deals are not lost because of quality; and your deals are not won because of price.  After all, there can be only one lowest price and one best quality.  That means everyone else has to sell value.  In value selling, differentiation takes place in the field (or on the phone) and that means your ability to differentiate is reliant on:

  • Consistent and effective consultative approach,
  • Effective milestone-centric, customer-focused sales process, and
  • Consistent and effective coaching from sales managers - on their deals and personal growth.

 In my experience, this is generally not what is taking place in most companies.

You can improve the sales process and sales coaching by attending my annual Sales Leadership Intensive - May 17 and 18.  It's two days of the absolute best training on how to effectively coach salespeople and much, much more.  Use this link with embedded discount code to save 30%! [Update - Sold Out]

You can find out if your salespeople are truly selling value and to what degree they are using a consultative approach with a sales force evaluation.  For most companies, the information learned and action steps identified make this a no-brainer.

And you can simply hire better salespeople, but using the most accurate and predictive sales candidate assessment there is.

Topics: Dave Kurlan, salesforce.com, long sales cycle, sales win rates, building the sales pipeline, insidesales.com

12 Proven Sales Hacks to Increase Sales

Posted by Dave Kurlan on Thu, Jun 25, 2015 @ 07:06 AM

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It seems that these days, things are changing faster than we can recognize. Cosby is finally out of the news, but the Marathon Bomber is back in. The terrible winter weather is in our rear view mirror, but now we are dealing with droughts and tornadoes! And in our world, Sales 2.0, a term we haven't heard in a while, is making the rounds again. In today's article, we'll talk about the sales improvements that readers are most interested in.

Let's kick things off with the most popular article of the first 6 months of 2015, which talks about how dramatically things have changed in selling. Read this very popular article from earlier this year, which is all about the next change to take place in selling.

On LinkedIn, this article explains one simple change that salespeople and sales managers can make that will significantly improve the pipeline and win rate.

With all that has changed, no single characteristic is more important to selling than an individual's unconditional commitment for sales success. This article explains what committed salespeople do differently.

This popular article compares a bad sales email to a good one and a similar article exposes an ineffective cold call and includes a breakdown as to why it was so bad! This article completes the business development highlights with 3 keys to help convert more of those calls to meetings.

We've covered how to be more effective getting meetings scheduled, so let's move to another popular article that explored the possibility that with everything changing so quickly, consultative selling could already be dead.

One of the biggest challenges that companies are having right now is in attracting, assessing, interviewing and selecting new salespeople. Companies are hiring and it's more difficult than ever to hire a good salesperson. Accordingly, some of the most popular articles of the first 6 months of 2015 were written about hiring salespeople.  

This article explains why 1 million sales jobs will be lost, while this one explains why half of an entire sales force resigned in a single month. Could this happen at your company? Why is it that some great salespeople don't live up to your expectations while others are as good, or better than expected? This article explains how and when that can happen. On the other side of that story are the weak salespeople - those with poor Sales DNA and/or sales skills - who somehow find ways to succeed. This article talks about the intangibles they may possess and why they can't be taught or replicated. To round out the best of the sales selection articles, read this one about the phoney baloney sales candidate and how you can make sure that he doesn't fool you.

Finally, you won't want to click on this one right now. Instead, save it for when you have 30 minutes to read it in its entirety. The article began as a simple rebuttal to some junk science on sales selection and turned into a debate on the science of sales assessments and specifically, put Objective Management Group's (OMG) sales candidate assessments on trial. The people have spoken, but what did they say?

Was today's article helpful? Share it! Tweet it! Comment.

Topics: sales assessment, Dave Kurlan, Consultative Selling, Sales 2.0, cold calling, sales selection, objective management group, sales emails that work, building the sales pipeline

Top 3 Keys to Convert Phone Calls to Meetings

Posted by Dave Kurlan on Mon, Apr 06, 2015 @ 11:04 AM

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I had just finished speaking in Bozeman, Montana and was sitting in a delicious little breakfast cafe (think cowboy truck stop). That's when I was asked to explain how to maintain control of a cold call.  Well, the environment screamed rodeo, my inner voice yelled riding and taming a bull, but my voice of reason began talking about the concept of flow, patience, listening and staying in the moment.  

There are really only three primary things required to keep a call going long enough to get a disinterested prospect engaged:

  1. Road Signs. Where I live in Massachusetts, we call them rotaries, but in most places, they are called traffic circles or roundabouts.  The premise is that there is no such thing as a wrong turn in a traffic circle. The world is round, so instead of fighting to reverse direction, simply follow the path until you eventually return to the same traffic circle.  On a phone call, that means allowing the prospect to turn onto Put-Off Place, Disinterested Drive, Stall Street, or Hate it Highway. Instead of wrestling with them for control, just go with the flow and at some point you'll have a second chance to turn onto Success Street.  That is when you must use...
  2. If-Then Logic.  If you have ever written software code or even used formulas in Excel, then you have used if-then logic.  In sales, use if-then logic by writing out some formulas that you can use with confidence, whenever a prospect responds in a particular way.  For instance, if the first thing you hear is, "We're all set." you can respond with, "I expected you to say that...so I assume that [insert statement that assumes some version of perfection relative to what you sell]. If you are selling software, that might sound like, "So I assume that the latest efficiencies have allowed you to trim staff."  A series of if-then statements will work effectively if you have the proper...
  3. Tonality.  The most important thing on a call is to sound like someone who your prospect would choose to speak with.  When prospects try to get rid of salespeople on the phone, it's usually because they sound like salespeople, act like salespeople, and suck like most salespeople.  The calls don't sound like they will be much fun, prospects already know it will be a waste of time, and the salespeople are talking about themselves instead of their prospects.

When you utilize these three concepts to listen, stay in the moment, exercise patience, and succeed, your calls will improve.  Those are the three primary elements to getting a prospect's attention, keeping it, getting them engaged, and converting the call to a meeting.

Experts who sell marketing tools will tell you that cold calling is dead and to them, it is.  But they're wrong.  Even a follow-up call to a lead is a cold call.  Why?  If the person you are calling does not know you or expect your call, it's cold.  Today's leads - those where people must complete a form in order to get what they want - aren't any warmer than yesterday's leads.  They're only fresher.

The real problem is that fewer salespeople are making phone calls and when they do, they aren't reaching as many prospects as they used to.  It now takes 8-10 attempts to reach a prospect and 10-20 attempts to reach a CEO.  If that's not discouraging, then their awful calls will be.

It doesn't have to be this difficult.  Salespeople can be trained and coached to be effective at both cold calling and today's modified version of lead follow-up.  It's just that things have changed so much in the past 5 years that most approaches are outdated and ineffective.

If you or your salespeople need to build a bigger, better pipeline today, then the phone is the fastest, most effective way to achieve that.

Topics: Dave Kurlan, cold calling, scheduling sales appointments, building the sales pipeline

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Best-Selling Author, Keynote Speaker and Sales Thought Leader.  Dave Kurlan's Understanding the Sales Force Blog earned a medal for the Top Sales & Marketing Blog award for six consecutive years. This article earned a Bronze Medal for Top Sales Blog post in 2016, this one earned a Silver medal for 2017, and this article earned Silver for 2018. Read more about Dave.

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