Understand Each Sales Opportunity

This issue, I would like to begin with two subjects that are close to my heart: effective sales reporting and how it is linked to the buying cycle.

Whether you are selling equipment or raw materials to the industry both these subjects are of equal importance and, of course, vital in the understanding of your true position to the market. Sadly, however, these two subjects are rarely linked and taught during sales training.

Unfortunately, sales training is often approached with a broad brush, with the belief all sales people and all sales teams are alike. While it is true the principles of effective selling remain unchanged throughout the decades, the methods of approach, testing and measuring together with response monitoring techniques are continually evolving.

The understanding of personalities and timing of delivery also play a major role in sales strategy in today’s markets. Add to this the advent of social media and we have a very fluid set of dynamics that surround – and often confuse us.

The result, in many cases, is a disconnect between management and the sales team through inaccurate interpretation of sales reports and a misunderstanding of our true position within the buying cycle.

Let me begin with modern day sales reporting. The common practice is to apply a two-stage key performance indicator (KPI) that includes a top line budget number and the desired margin approved by management. With this in place our sales teams go about their business in the ever-growing sales territories, picking off the orders that appear to fill the company needs. All sounds great in theory doesn’t it?

The problem is, however, there are many other factors that management need to be aware of to be able to set the course. Additional products and services are introduced each year and others retracted as they appear to be no longer deemed applicable in the sector. This has an ever-changing effect on the total market size available to pursue.

The following questions immediately come to mind:

• What is the total market size available to pursue?

• What is our current market share per product or service sector in each sales territory?

• What is our conversion rate in each product or service sector?

• What is our overall market share?

• What is our percentage of organic growth in each sales territory?

• What is our percentage of new business development in each sales territory?

For marketing and management to be effective in their decision making all the above information needs to be available and reported upon. I have been surprised throughout the years how many companies operate without this data at their fingertips. In fact, it has astounded me on occasions.

The “super seven”, as I call it, is the necessary information we need to be accurate in our sales reporting. Without this the company is really flying blind.

The super seven:

1. Quote bank number off
2. Conversion rate %
3. Organic growth %
4. New business %
5. Product/service %
6. Margin %
7. Market share %

The buying Cycle:

Each and every sales opportunity goes through the same purchasing procedure year in year out and this is known as the buying cycle.

Whether it is new or repeat business the same considerations are made by our customers and the same type of decisions are made – just with different outcomes.

It is up to the ability of our sales people to interpret the status quo and pitch accordingly to the right people with the right type of information at the right time. A pure understanding of all three factors is paramount in being well positioned with any degree of information to predict the outcome.

I will touch on the three initial phases prior to any decision being made to purchase today.

1. The assessment of needs: This is where we identify the key players inclusive of the people who will provide the necessary information, people unsatisfied with the status quo and the decision makes with the power to effect change. This is also where we test and measure sweet spots and build momentum before any pitches are made.

2. The assessment of alternatives: This is where we scan and map opportunities to qualify our leads then, strategise to make our first pitch. We also uncover who our competition is and their capabilities.

3. The alleviation of risks: This final phase is when the “what if” and “what happens” type questions are raised by the client. Our skill in answering these questions non defensively needs to be well anticipated and rehearsed.

Only once we become proficient in this area of sales can we determine our true position with each and every sales opportunity and therefore, accurately report our activity in the field. They go hand in hand.

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