Don’t Get Caught Flatfooted: 5 Steps for Improving Predictability
Too Close to Call
It’s the end of the quarter. All eyes are on you. Everyone is expecting you to deliver the number. But unless you can pull another revenue rabbit out of your hat, you probably won’t. If you’re tired of being caught flatfooted, you need to build more predictability into your sales model, fast. Your CRM system can help.
Step 1: Honestly Evaluate Past Wins and Losses
Selling is part art, part science. Boosting revenue, and revenue predictability, requires tuning both. The first step, often the most difficult, is honestly evaluating past performance. You must identify the true triggers for purchasing and the untold story behind losses. This reality check will enable you both to refine your selling process (science) and to evolve your sales interactions (art).
Identify Buying Triggers
First, start by identifying high-level win-loss trends. If you’ve selected a flexible CRM system, you won’t need to tediously stitch spreadsheets together to reveal meaningful patterns. Dynamic dashboards should allow you to slice and dice the data by vertical, product mix, geography, etc., helping you identify objective, demographic-based triggers such as company size, location, and industry.
Customer conversion, however, is rarely a matter of demographics alone. Purchases are commonly triggered by subjective factors: new management, new regulations, poor quarterly earnings. Your historical analysis must surface trends regarding subjective buying triggers. If you do not currently capture this information, you should immediately update the fields in your CRM opportunity records, so you can track and continuously monitor this most heavily weighted of conversion criteria, subjective buying behavior.
Again, if you’ve selected a flexible CRM system, a business person without a heavy IT background can quickly make these updates through various built-in wizards and configuration options. If not, these crucial changes will have to wait until your overburdened IT staff has time to implement your request.
Ask the Tough Questions
Behind each loss is an untold story. To fully understand why an opportunity did not convert, take a close look at your pipeline and ask these tough questions to get to the heart of the matter:
- Did deals fall out of the quarter, or were they never there in the first place?
- Were deals lost because business problems lacked sufficient magnitude or urgency, or did we lack political sponsorship?
- Is our competitive position degenerating, or has the market gone soft?
- Was the price too high, or was the sales rep ill-equipped to discuss business value?
Many deals are lost because reps are reluctant to raise their hands and ask for help. To surface issues before deals die, formalize your selling process.
Step 2: Formalize Your Selling Process
If you don’t use a formal selling process, start now. Formalizing your process provides a common language and measurement tool, permitting sales and sales management to determine quickly which deals are progressing smoothly and which are in jeopardy.
Speak a Common Language
Research from the Aberdeen Group indicates that 95% of Best in Class firms, versus 33% of sales laggards, use a standardized selling process. Methodologies such as Miller Heiman or Solution Selling offer a starting point. Every company has a unique selling process and a specific vernacular. These methodologies must be tailored to fit your sales organization, so processes can be discussed using a common, relevant language.
Begin by establishing a set of discrete steps in your sales process that track opportunity progression from “suspect” to “contract.” Each step should indicate a significant change in the customer’s commitment to make a buying decision, helping you predict the likelihood of revenue. Assign definitions to your sales steps, then identify step triggers and sub processes for each. If you already have a selling process, review the steps to ensure their validity. Next, automate the defined selling process in your CRM system.
Automate and Enforce Selling Steps
If you’re fortunate, your CRM system shipped with one or more pre-built methodologies, enabling you to jumpstart process automation. You are even better off if the workflow underneath the sales process can be reconfigured by a business person, not IT. Your objective is to automate and enforce the process so that opportunities can only progress to the next stage when specific tasks have been accomplished. Deals thus stay on track and have a higher probability of closing, because every salesperson is following a “top performer” process. Studies show that companies using technology to support the selling process have increased revenue by 16%.
Step 3: Focus, Focus, Focus
Focus is another enabling factor of revenue predictability. Armed with your buying triggers and formalized selling process, you must now define a profile of your “ideal opportunity” and focus selling efforts on winnable battles. Provide your salespeople and sales managers with clear direction regarding what types of deals are ideal. Then have the discipline to enforce the focus. Of course, you may sometimes want to pursue an opportunity that doesn’t fit the profile – with a brand-name customer, perhaps, or to penetrate a new industry or geography. But when departing from your strategy, be explicit with your rationale.
The Importance of Forecasting
If you have selected a flexible CRM system, you can generate a forecasting model that enforces your strategy. Configurable options should allow forecasting by territory, time, and employee. The ability to dynamically monitor ideal opportunities against forecasting criteria enables sales management to confidently predict the flow of business. And allowing sales reps to view individual forecast attainment against their sales quota gives them a visual indicator of where they stand and where they need to focus to hit commission accelerators, or make “club.”
Step 4: Enhance Rep Productivity
Clearly, hitting your number involves people, not just process. Most sales people spend less then half of their time selling and the remainder on meetings, administrative tasks, account service, training, travel, research, and intra-company communications. To predictably hit your revenue goals, you need to increase the amount of time your reps spend selling.
In the Field
For reps in the field, more face time with prospects and customers means embracing mobile CRM technology. Providing reps with real-time access to critical CRM information via their handheld devices ensures them a complete view of the customer relationship, increasing their effectiveness on the road. Reps can update pipeline opportunities, tasks, and activities remotely, keeping management and the rest of the team up to date with the latest developments in the field.
On the Phone
For reps on the phone, more talk and connect time means embracing auto-dialing technology. Auto dialers automatically call numbers from a list or database. To truly enhance productivity, this technology must be integrated with your CRM system, providing the ability to dial from contact records and automatically track calling activity within the records. Auto dialing improves both productivity and rep performance. Features such as digital recording and playback, silent observation, and whisper coaching help reps perform at peak.
360-degree Customer View
Whether on the phone or in the field, sales reps must have access to a 360-degree customer view. Because customer data resides in other business systems, you will want to look beyond the front office and pay some attention to integrating with external data sources. Companies in manufacturing, for instance, may require tight integration with the back office, so should focus on integrating enterprise resource planning (ERP) and supply chain management (SCM) systems. For others, a complete customer view will call for integrating with accounting systems
If you’re fortunate, your CRM solution was built on a service-oriented architecture (SOA). The goal of SOA is to make integration cheaper and easier by leveraging a modular set of standards-based services offering more flexibility than previous architectures. SOA, part of the enterprise software market for about two decades, has recently become a hot topic for CRM vendors, because traditional solutions were brittle and difficult to integrate. If your CRM is not leveraging this latest technology advancement, you may not have the flexibility you need to obtain the necessary 360-degree view of your customer.
Step 5: Manage Your Pipeline Proactively
The ability to accurately forecast sales numbers is directly related to the quality of your selling process. Your process fuels the pipeline stages, enabling you to predict the likelihood and timing of revenue. Where sales executives often get caught flatfooted is not managing the pipeline proactively.
Frontload the Sales Funnel
A common sales pipeline management metaphor is a funnel, wide at the top and narrow at the bottom, illustrating your step-by-step selling process and the inevitable opportunity drop-off at each stage. At the top of the funnel are suspects, people who match your ideal customer profile, but are not yet qualified. At the bottom of the funnel are customers who have purchased your product or service. Logically, you want to frontload the funnel to ensure that you always have enough deals to compensate for drop-off.
By using the sales funnel, and by quantifying the number of prospects required at each stage of the process, you can build predictability into your sales model. If your CRM system offers dashboards, you can identify bottlenecks or determine which sales stages have an insufficient number of deals at a glance. Armed with this knowledge, you can take action to orient team focus to what’s needed to keep deals progressing at the desired rate, so you won’t miss the number. Or you might discover that marketing activities require adjustment; perhaps more leads or higher quality leads are required to fuel the funnel.
Real-time Pipeline Updates
A gating factor to proactive pipeline management is timely participation by your sales team. The sales team is responsible for feeding data into the funnel and is also responsible for selling. Your CRM system can help reduce the administrative burden on your salespeople if it can automatically transfer opportunity status updates directly into the funnel. No additional reporting should be required. With mobile CRM technology, your reps can also update opportunity information from the road, reducing tedious data re-entry, and ensuring that your pipeline is always up to date.
With these five steps, you won’t be wasting time on Sunday night, stitching together spreadsheet information from various reps and sales managers. Your CRM system will dynamically monitor your defined selling process, and the progression of deals, giving you the comprehensive real-time view necessary to manage your business proactively. The next time your CEO stops you in the hallway and asks, “Will we hit our number?” you will have the visibility and predictability to answer the question with confidence.
Coming next, Volume II: “The CRM Guide to Eliminating Guesswork: Elevating Your Credibility: 5 Steps for Proving-and Improving-Revenue.”