A process is never ending while a project has a defined start and end. Sales is a process. Sales are never done, and the conditions constantly change, making this a challenge using finite resources. In sales the grand challenge is “What’s next?” and there is always something next.
Managing a process requires a different mindset than managing a project. For a process, you must manage for the long term and accept that not everything is measurable, but everything is connected. Sales is unlike many other jobs where you can actually complete the task. In sales, as soon as you close one sale, you must move on to the next sale. The key to sales optimization is deciding “What’s Next?”. To do this, let’s start by looking at a typical market chart. This has a common flow from startup to death and if you want a deep dive in the details you can find this at www.SeekingYes.com This is from my AI Team that is working on this problem. The secret is to continue to cycle customers into the lead-to-order process. The path from each status has its own influencers. When you are dealing with new business, as we often are, the key is the path between suspects (those that you think you can do business with) to prospects (those that have indicated an interest in doing business with you). I realize that the prior sentence is complex but it’s important to understand.
Converting suspects to prospects is expensive and not very productive but it is a necessary evil. It is necessary because from these, comes new business and new business means more Customers, Clients, and Evangelists. From those, come the highly coveted referrals that cost less and produce a very high close rate. The problem with the referral business is that it’s impossible to scale. There is no silver bullet that will suddenly cause referrals to grow at the rate YOU want.
Hate New Business Dev? – Everyone Does!
Managing sales means managing the flow from status to status and regulating the size of each pool of business. Sales has a cycle of peaks and valleys created by the mismanagement of the system. The leads grow and sales reps prioritize them above everything else. The first thing that gets dropped is the cold calls because everyone hates them. This causes the new lead flow to stop as the open leads are worked on. When the leads are worked through, they go back to cold calls, but the pipeline is empty, and it takes time to get this reloaded. This causes all sorts of operational issues with demand growing and crashing over and over again. Companies with a large sales team don’t typically have these issues because different reps are in different parts of their cycle averaging out the business as a whole.
The challenge comes back to the infinite work and finite time. The best advice is to consistently work all the paths based on your best estimate of the finite labor resource. Then adjust until you find the right balance. Nobody is perfect at this, but some are better than others.
Now Think BIG
In the chart above, you will see 8 road markers that represent the path flow between statuses within the system. You should have a plan for how to manage each of those and understand the flow through them. When you are new, you must put all your resources into #1 because you have nothing else to work on. As the customer base grows and your referrals grow with it, the lead flow will come from the customers, clients, and evangelists. As this happens, you can transfer resources (time and money) to these but you need to resist the temptation to eliminate cold calls & advertising. In the short term, your sales and profits will increase but you will slowly but surely die.
In future articles, we will explore the business development process in more detail, and we will explore our current thinking on each of the Road Markers and the paths they represent. If you would like to discuss in more detail give us a call and ask for Bob.