New Data Shows that You Can Double Revenue by Overcoming This One Sales Weakness

Posted by Dave Kurlan on Mon, Oct 22, 2018 @ 06:10 AM

24 TV Show Cast

My wife and I have been watching 24 for the last few months and we've made it to season 7.  Once in a while, one or both of us falls asleep during late-night episodes but we are always saved by:

PREVIOUSLY ON 24...

With that in mind, I will save you if you didn't happen to read last week's article which is a pre-requisite for this one.

PREVIOUSLY ON UNDERSTANDING THE SALES FORCE...

My article revealed that salespeople who are burdened with the need to be liked are far less effective at selling than those who don't have that weakness.  The biggest insight of all was that these salespeople were 47% less effective reaching decision makers!

This article will take the same approach and use the same data from Objective Management Group's (OMG) evaluations of 1.8 million salespeople to look at salespeople who are uncomfortable having a financial conversation with their prospects and customers.  The latest data reveals that 60% of all salespeople have this weakness!  What do you think it will reveal?

As you might guess, the money weakness effects fewer competencies than the need to be liked.  Where the need to be liked has an impact on sales effectiveness in 7 of 21 sales competencies, discomfort discussing finances impacts only 4 of those sales competencies.  See the table below.

money-stats-2
It should not be a surprise that this weakness has an impact on the Value Seller (47% less effective), Qualifier  (50% less effective) and Negotiator (46% less effective) competencies.  What might be surprising is the overall impact it has on Sales Percentile (they score 69% worse overall) and Opportunity Probability.  Salespeople who are uncomfortable having the financial conversation are 50% less likely to close their opportunities than those who are comfortable!  That's huge!  Coincidentally (we are measuring different things here), that is the same difference as in the Qualifier competency. Cool!

But the big story here is not the difference in effectiveness.  In my opinion, there are two big stories with discomfort talking about money.

  1. Wasted time and energy - just think about the calls, meetings, visits, quotes, proposals and people that were involved in the HALF of opportunities that didn't close.  That is a huge waste.
  2. Lost opportunity - think about two numbers - either the value of a customer, account or deal and the number of customers, accounts or deals in a year.   Let's pretend that a deal is worth an average of $25,000 and each salesperson closes an average of 4 per month or 48 per year.  That comes out to $1.2 million.  If a salesperson with this weakness is wasting 50% of his opportunities, that is $1.2 million in lost opportunities - PER SALESPERSON - with this weakness!

While the need to be liked can take many months to overcome, overcoming one's discomfort discussing finances is more of a decision to simply have these conversations.  So if you have this weakness, the $1.2 million dollar question is, are you ready to double your sales?

Read the discussion and add your comment to the LinkedIn thread for this article.

Topics: Dave Kurlan, talking about money, uncovering budget, double revenue, Sales DNA

Is $100,000 a Lot of Money? What Would Your Salespeople Say?

Posted by Dave Kurlan on Mon, Sep 13, 2010 @ 09:09 AM

$100,000 is a ton of money.

$100,000 is peanuts.

Your perspective makes all the difference.

Suppose I told you that I could double your revenue and my fee would be $100,000?

Now is $100,000 a lot of money?

It would depend on several factors, wouldn't it?

The first would be your current revenue.  Look at the table below:

Revenue

Clearly, if your revenue is below $1,000,000, then $100,000, even to double revenue to $200,000 is of little value.

But if your revenue is $10,000,000 or more, then $100,000 to double revenue to $20,000,000 or more has tremendous value and the value and return increases exponentially from there.

The next factor is the length of your sales cycle.  If you have a short sales cycle, say less than 3 months, you'll realize your return much more quickly, within the first year.  Given the short time frame, there is even great value with the current revenue at $1,000,000 - a 10x return in one year!  However, if your sales cycle is long, say 12 months or more, the return may be 24 months away, making the $100,000 investment to go from one to two million less appealing.

Finally, there is a reality check factor.  Look at the next table which simply adds a third column titled Realistic.  It weighs how realistic it is for the current revenue to actually be doubled.

Revenue2

As you can see, once you hit $100,000,000, it becomes extremely unlikely that you, even with my help, could double revenue in that short time frame.  While $100,000 is not a lot of money to double revenue, the credibility factor would factor in because the offer isn't believable.  So the proposition must change as the revenue increases.  At $100,000,000, a 10% boost results in a $10,000,000 gain - a great return on $100,000 - and much more realistic.

With those three factors understood, we can return to the original question which was, "Is $100,000 a lot of money?" 

No, $100,000 is not a lot of money, as long as your current revenue is $1,000,000 or more with a fairly short sales cycle, less than $20,000,000 with a longer sales cycle, or up to several hundred million dollars with a reduced proposition for return.

And yes, it is a ton of money if the revenue in question is less than $1,000,000.

Lesson: Your salespeople must be able to understand the value proposition of their offering from every possible angle in order to make it fit their prospects' and customers' different worlds.  Do they?

By the way, I would be happy to help you determine what kind of increase is possible at your company.  Our sales force evaluation includes a determination of who can be trained/coached/saved, what will be required, and what the return will be from developing them....

Topics: Dave Kurlan, sales consulting, double revenue

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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 and this one for 2017. Read more about Dave.

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