Yesterday I did a workshop for Business Link on ‘How to win more sales’ and there were businesses with turnover ranging from £1m to £8m. I asked around the room who had heard of terms like the ‘sales funnel’ and ‘pipeline report’. None of them kept statistics and knew what their conversion rates were.
This is basic sales management and doing it not only makes sales more predictable but it also provides all the answers to where in the sales pipeline you can work on to increase sales. For example, lets say a sales person had statistics as follows:
50 Leads Generated
10 Qualified Leads
5 Sales meetings
1 Sale won
The sales person knows that without working on their sales technique they need multiples of 50 leads to get more sales. Simple mathematics.
These statistics give a number of additional insights. Firstly the lead generation is probably not that well targeted or perhaps some leads are being incorrectly qualified out. It could be that getting more focused leads can bring down the ration of 50:10 to 40:10 or even lower. That way you do not need so many leads to win a sale. Secondly the ratio of Sales meetings to Sales wins (5:1) tells me the person is probably not approaching the sales meetings in the right way. For example, they are probably not drawing out the pain of the prospect and instead focusing on pushing a specific ’solution’.
If you keep a pipeline report where you list opportunities at each stage of the process then you can review what needs to happen to take them to the next stage. It will also form the basis of your forecasted revenue in the weeks and months ahead. This can then provide information about expected cash flow, which in business is key.
These sales management tools, are not just for managing others. Every sales person should be managing themselves when it comes to these basics. If you do not currently do anything in this area then you will be amazed at how the results tell you what activity is required and what you need to do to get the sales you need. Furthermore, if you have plans to build a sales team or you already have a sales team then failing to manage the sales pipeline and the numbers will mean you have no control over the sales or the sales forecast. Best to start now!!