Successful Sales Skills for Increasing Win Rate and Profitability
The old adage "People love to buy, but hate to be sold to" is rephrased from the seller side to "Salespeople love to win, but hate to lose." Sales management might say, "I want to help salespeople win, but win the right business," because the hot pursuit of a win can backfire if salespeople are going after deals that aren't profitable.
Selling has grown increasingly complex and difficult. As research by CSO Insights and Aberdeen shows, over the past five years, win rates have fallen from 50% to 47%. No-decision rates have grown from under 20% to over 25%.
So how can salespeople, sales managers and organisations increase win rates and reduce no-decision rates? The short answer—discipline. If you want the longer answer—discipline in articulating the opportunity, discipline in the analysis of the opportunity, discipline in gathering evidence and discipline in making go/no-go decisions—please read on.
HIGH-PROBABILITY AND HIGH-PROFITABILITY OPPORTUNITIES
The discipline required in identifying high-probability and high-profitability opportunities starts with understanding clearly and accurately what the customer organisation is trying to accomplish. Effort here focuses on collecting compelling evidence and analysing which opportunities lend themselves to increasing win rate. This approach invites dialogue among everyone involved in a sales campaign to make an informed go/no-go decision to pursue an opportunity.
You have to be prepared to describe the opportunity—the "deal"—by articulating . . .
- What the organisation is trying to accomplish
- The customer's main criteria for an ideal solution for accomplishing the above
. . . and then answering three questions:
- Will the customer buy something?
- Does this opportunity have value for me and my company?
- Will the customer buy from me?
Let's unpack these questions and see what's inside each one.
DEFINING THE OPPORTUNITY
An opportunity worth pursuing is one anchored to a business imperative. If you are not able to articulate a problem statement, or what the organisation is trying to accomplish, there likely isn't much need for a solution. If the opportunity is tied to something inside the business, in response to that problem statement you must next be able to answer, "What are the customer's main criteria for an ideal solution?" or "How does the customer define value?"
1. Probability Analysis: Will the Customer Buy Something?
In an effort to conduct an intelligent, informed discussion around, "Shall we pursue?" the first "Yes" comes from a moderate to high probability the customer will buy something. If there is low probability, you may need to rethink if it is worth time and resources to commit to pursuing the deal.
In the probability analysis, your radar must be up, continually listening for and gathering evidence that the opportunity on the table has strategic importance. If you don't know, a disciplined approach to determine strategic importance becomes the focus of the next customer conversation and/or gathering of evidence in the field or from media, annual reports or the MD&A in financial reports.
If an organisation puts out an RFP, for example, that doesn't necessarily mean the opportunity has strategic importance. Don't assume. The customer may just be fishing. If the person you are calling on claims the deal is important but you don't have compelling evidence to support it, the question for you as a salesperson (or sales manager) becomes, "Is this enough evidence—is it believable?" The discipline comes in the discussion between salesperson and sales manager considering, "Are there additional data points that support it is important?" Further analysis and evidence gathering may be necessary to determine the business imperative or strategic importance of the opportunity.
The next key consideration in your probability analysis is determining if there is a level of urgency or a compelling event pushing the customer toward a buying decision. Reality is, if there is no compelling event, little to nothing gets done and the decision gets delayed. If the level of urgency is not moderate to high, you will spend a lot of time and energy likely getting to no decision.
Think of the discipline of probability analysis as a necessary speed bump that doesn't stop the process, but may slow it down to consider if you're pursing a losing proposition.
2. Value Analysis: Does this Opportunity Have Value for Me and My Company?
The discipline around a value analysis enables you to discern if this is business you want. Again, the answer must be "Yes," and it's best to discover the answer early in the sales process.
Key in value analysis is not only establishing the size of the opportunity, but also paying attention to the cost of the opportunity—estimating the salesperson's, sales executive's and support team's time and expense to determine if it is profitable and good business for the company.
3. Position Analysis: Will the Customer Buy from Me?
If you have said "Yes" to the question, "Is there compelling evidence that this organisation will buy something ?" and "Yes" to the question, "Is there compelling evidence of appropriate value?" the next "Yes" needs to be your response to "Is there compelling evidence that this organisation will buy from me?"
In this analysis, your position relates to evidence of how well your offering matches the customer's needs better than the competition, the value the customer places in your offering, your credibility with all decision makers, and your reputation. This type of evidence enables everyone involved in a sales campaign to discuss the relative strength of your competitive position. And if you lack evidence, it is incumbent upon you—salesperson, sales manager, or support staff—to dialogue, ask questions, listen, and determine the strength of your competitive position for increasing your win rate.
SHOULD WE PURSUE?
From a disciplined approach using probability, value and position analyses, the salesperson and the sales manager can then determine "Should we pursue?"
Ponder this for a moment: Recall a time when you wish you would have lost a deal you won. This might conjure up some unpleasant memories, not just from a salesperson's perspective, but equally from a sales manager and from multiple functions within the organisation as a lot of time, resources and energy are involved in the pre- and post-sale process. Taking a disciplined approach to opportunity analysis may have avoided winning a losing deal.
A DIALOGUE OF EVIDENCE VS. AN INSPECTION OF NUMBERS
The approach I have mapped out invites dialogue and discussion based on evidence, rather than an inspection of numbers—numbers that at times can be skewed in ways to sweeten a potentially sour deal. Evidence that shows the probability, value and your position in terms of "high-medium-low" or "don't know" (in which case begs you to find out) provides a basis for ongoing, intelligent discussion throughout the sales process. "What does the evidence say?" "Do we believe it?" "What more do we need to find out?" It takes discipline to ask and answer questions like these for every opportunity in order to strategically point you toward those opportunities that have the greatest chance of you winning. And, everyone loves a winner . . . of the right business.