A big pipeline does not always equate to big sales.
Sales people who chase everything are almost always outpaced by those who chase the "right" opportunities with the "right" clients. To increase revenue however, sales leaders are constantly trying to get more and bigger deals in the pipeline.
This concept makes sense if you accept the following assumption:
This line of thinking assumes that more "at bats" with bigger deals will result in greater sales. The flaw in this reasoning from our perspective is that not all opportunities are created equal.
The type of solution that you are selling and how it compares to available alternatives has a big impact on your conversion rate.
The problem with most sales pipelines is not their quantity, but their quality. Most B2B conversion rates hover well below 20%. For example, Forrester research indicates that the average conversion rate of online leads is 2.9%. Other clients we speak with typically expect to close around 5%-10% of their overall pipeline.
Our experience tells us that most sales reps waste an inordinate amount of time inflating their pipeline to look productive best sales中文 during weekly forecast meetings and chasing the wrong opportunities. When sales teams are struggling for growth, we believe that "Conversion Rate" is a more powerful lever if your sales team only invests in opportunities at target clients where your solutions have the best chance to win.
In addition to getting referrals from clients and from your personal network to increase your opportunities and conversion rates, we recommend using the red, yellow and green light approach to prioritize what your sales teams go after.
1. Green Light: In this case, you have accurately obtained reliable answers from the buyer(s) regarding the specific problem the client is trying to solve (pain or gain); the value to the client of solving the problem; the budget, timing, scope, decision criteria and process; and the competition. You also know how your solution stacks up against the competition. Once you have a deep understanding of your buyer's business situation and buying process, you have all the information you need to determine if you want to go after the opportunity. We recommend only pursuing opportunities that fit your target client criteria and where you know you can (and should) win. If any of the key information is missing, you have a yellow light.
2. Yellow Light: A yellow light means that you are unable to acquire a key piece of information necessary to clearly understand your odds of winning the work. In this situation we recommend trying to turn yellow lights into red or green lights as fast as possible by asking more insightful questions. For example, if a client will not share their budget with you (a common yellow light), you can reveal the typical range that similar solutions cost similar clients. If your client says that the range is within reason, then you have turned a yellow light into a green light because you know that the budget is not a barrier to closing the deal. If however the client is shocked by your proposed range, you know that your services are best suited elsewhere. While many sales reps would consider this a "loss," we consider your decision to spend your time in areas with greater probability for success more like a "gain."
3. Red Light: A red light means that you have a received an answer to a key question (i.e. desired solution, budget, timing, competition, business priority, ROI, decision maker, selection criteria, etc.) that leads you to know that you either will not or should not win the work. We consider that a red light is as valuable as a green light because it points you in the right direction in terms of where to spend your time. This is not a loss. The work was never going to be yours to begin with.
The right solution selling skills allow your sales reps to get to red lights and green lights as fast as possible so that you spend minimal time chasing the wrong opportunities and, instead, invest in the opportunities most likely to close.
Mike came to my office one day looking very discouraged. He had been selling for about two months. He was doing significantly above average so his discouraged look surprised me.
I asked him what was wrong and he said, "I don't understand it. With my last prospect I thought I did a perfect selling job. The greeting went very well. My fact finding told me all the important things he wanted. His response to my product presentation seemed ideal. I over came his objections very effectively. But when it came to getting a commitment from him to buy - nothing I did was successful."
"What did I do wrong?" he asked with a frustrated tone.
I first ask Mike a series of questions about each step of the selling process. I then said to him, "In my opinion it looks like you did everything right."
"Then why didn't I make the sale?" Mike asked emphatically.
10-80-10 Selling Rule
I calmly responded, "I would say it's because of the 10-80-10 selling rule."
"What is that?" he asked.
I explained that for every 100 customers you wait on:
The secret to success with the "10-80-10 selling rule" is in two parts.
First, focus you time and efforts on improving your selling skills like you are doing now taking this selling secrets course. The fact that you are reading selling secret #10 says some powerful things about your commitment to your selling skill development.
Second, don't focus you time and efforts being frustrated because you didn't sell that bottom 10% of your customers. Joe Girard the #1 car salesperson in the world (according to the Geneses Book of World Records) had a bottom 10% he couldn't sell too. So my advice is to get over it and move on to more productive sales producing activities.
Selling is an art not an exact science. Don't think you have to be perfect in sales. It's amazing how rich you can get in sales by being good but not perfect.