HARDISON’S TIPS – DECEMBER 24, 2021 – Creating a Sales Process
The sales world has been evolving for years, with traditional tactics like paper marketing and face-to-face sales meetings slowly giving way to more digital-first strategies that reflect the desires of the modern buyer. By 2019, 81% of buyers were doing online research before committing to a purchase, showing how important a persuasive and informative online presence has become in the quest for increased sales growth.
This years-in-the-making digital transformation was turbocharged by the pandemic, which pushed more transactions online — a change that will almost certainly be permanent. If it wasn’t already clear to sales leadership that the days of traditional sales tactics have ended, it should be apparent now. Sales organizations will have to change their focus and figure out how to best scale virtual sales and adapt more quickly as markets continue to change. This is going to require a smarter approach that uses AI and big data to guide sales processes and customize tactics to specific customer needs.
To accomplish this, sales teams will have to reexamine every point of their sales infrastructures to see how they can be best adapted for a more modern approach. Sales objectives will have to change to provide a more up-to-date road map for sales teams. Key performance indicators (KPI) will need to be adjusted to make sure they measure the right factors for these new goals. Training, too, will have to change, along with compensation and incentive strategies to better reflect new priorities. Finally, the technology used will need to be updated, with tools like customer relationship management (CRM) software replacing older solutions like spreadsheets.
The number of adjustments you’ll need to make will depend on your current strategies. When it comes to improving sales operations, though, nothing in your sales infrastructure should be regarded as sacred. You’ll need a system in place to evaluate your progress, with regular team check-ins to look at what’s working — and what isn’t — so you can make improvements to your organization as a whole.
But what about when you’re just starting to make changes? Where do you begin to trim the fat? To help you in your journey of creating a leaner, meaner, more modern sales team, let’s look at some of the different components of a sales plan and help you decide what to keep and what to change.
Component 1: Sales Process
An effective sales process should mirror the buyer’s journey. When your buyer starts purchasing in a different manner, the sales process should change with it. As buyer behavior continues to evolve and adapt to new technology, you’ll want to build a buyer-focused sales process that can help sales reps quickly find where customers are in their journey and approach them there — not expect buyers to meet them halfway.
A buyer-focused approach puts sales teams in the shoes of customers and truly attempts to understand what they want in a transaction. The result is messaging tailored for the different sales process steps, increased win rates, and an accelerated sales cycle. It also results in a better experience for buyers. Considering a positive sales experience makes it 53% more likely that a buyer will become a loyal customer, this is no small feat.
How can you ensure you’re continuously keeping the buyer in mind during each part of the sales process? The key is regularly monitoring for effectiveness while watching for these three warning signs:
- Your sales process fails to connect emotionally.About 70% of the success or failure of a sales process rests on how buyers feelthey’re being treated. If you’re not connecting with customers on an emotional level, you’re missing out on an incredibly effective sales tactic.
- Deals are stalling out more than normal.When the time it takes to close deals keeps stretching out, that’s an indication that the sales team is focusing more on selling than engaging with buyers. While a sale is your ultimate destination, the journey should be about communicating, providing customers with the information they want — when they want it.
- There’s been a significant change in market forces.Sometimes it’s less a matter of what you’ve done in the past and more that the present is just radically different. A change in the economy, your particular industry, or with competition can all impact the customer’s journey and necessitate a new approach to your sales plans and actions.
Component 2: Sales Compensation Plans
Ideally, a compensation plan should encourage your salespeople to perform at their best while still making sure that the goals they need to hit are realistically within reach. In reality, these plans are often created by leaders who haven’t personally dealt with compensation tied to performance, so they don’t always understand how salespeople think and behave.
This results in plans that either favor base salary too heavily or commission too heavily. On both ends, these sales compensation plans can fail to drive the right behaviors — and sometimes even encourage the wrong ones.
Meanwhile, a 50-50 sales compensation plan (i.e., a salesperson’s compensation is based 50% on salary and 50% on commission or bonuses) can provide the right level of motivation and security. A compensation plan should be easy to understand and based on behavior instead of specific contracts or tenure. Here are a few things to keep in mind when structuring a sales compensation plan:
- Decide what the optimum sales level needs to be.If you don’t know what you want, it’s going to be hard to create the right incentives. How much are you looking for, and when do you want these sales goals reached? What kind of revenue mix do you want? Are you looking at it by product, customer type, or some other metric? These are questions you need to answer before you can create a proper plan.
- Make sure sales reps can earn their desired income in the increments you want.The compensation structure you create should depend on how much of each revenue stream you want to bring in. If you want reps to generate more new customers, for instance, then the commission percentage should be higher for those than what they receive for existing customers.
- Explain what your plan is.One deceptively simple obstacle to making a compensation plan effective is making sure your sales reps understand how it works. A good sign of a well-written plan is whether it’s easily understood. If you find yourself struggling to explain it or fielding quite a few questions, that probably suggests you need to take another pass at it.
Component 3: Result Tracking
The previous two components of a sales plan can largely be approached as before — just with some modifications. However, the way many sales organizations track results (i.e., by spreadsheet) needs a serious overhaul. Spreadsheets aren’t built to handle modern sales objectives and needs.
With spreadsheets, real-time collaboration is tricky at best and disastrous at worst. Even with a cloud-based solution like Google Sheets, having multiple users updating information simultaneously can lead to a variety of data conflicts.
More importantly, spreadsheets are passive rather than active. Once the data is entered into a spreadsheet, it just sits there; it’s not analyzed or spun off into reports that can be used later. There’s no depth to a spreadsheet, which can make it hard to spot issues or create game plans out of the information stored there. Instead, sales organizations should consider onboarding a CRM to track results. A CRM can also manage a variety of other useful tasks, including lead management, workflow automation, and analytics.
Most modern CRMs are accessible from any device and updated in real time, which makes them significantly more suited to digital-first sales teams. This might explain why, in 2019, CRM use increased from 56% to 74%. What’s more, 74% of CRM users said the tool offered improved access to buyer data. In short, CRMs are more than just a pandemic convenience.
If you’re still using spreadsheets to track results, it’s past time to make the change to a CRM. If you haven’t yet because you’re worried about how best to implement a CRM into your current sales infrastructure, here are a few best practices to keep in mind:
- Define your vision. A CRM can do more than just replace spreadsheets, but you won’t get the most out of your investment unless you have an idea of what you want it to do. Outline your sales objectives and overall vision, researching how a CRM can help you reach your goals. This will give you a much better idea of where a CRM fits into your current processes — and how it can improve them.
- Identify buyer profiles. Do you know the buyer personas of your target customers? Having a clear idea of who your customers are and what they need is important if you want to use a CRM to help create a buyer-centric sales process. Before you commit to a CRM, you should have defined, detailed profiles of your ideal customers to help you understand exactly what you need.
- Map out the buyer’s journey. At this point, you already know how important the customer journey is to your sales plans and actions. It’s also important when implementing a CRM. Plot out your entire buyer’s journey, if you can, asking yourself what customers’ goals are each step of the way, who will interact with them during each stage, and how you can improve each engagement.
- Integrate your data. A CRM shouldn’t just be integrated into your sales infrastructure — it should be integrated with your data. Modern CRMs make it possible to not only collaborate with your sales reps in real time but also to communicate with various data sources and organizations. This is one of the key ways a CRM is a more effective and efficient alternative to a spreadsheet.
Component 4: Sales Forecasting
Traditionally, sales organizations have based future sales on past performance. While learning from experience is important, using past sales numbers as the key element of sales forecasting is a good way to remain stagnant. Customer needs continue to change rapidly at the moment, so basing what you expect for the future on what you had in the past won’t get you where you need to be. Instead, a robust sales infrastructure should have metrics in place that can help companies plan for the present and the future.
Of course, that probably sounds easier said than done. How do you determine future sales using metrics other than by looking at past sales? If, as one survey found, 86% of reps don’t know what is supposed to happen at every step of the sales process, how can you make any consistent projections for the future? Let’s look at three strategies for getting a more realistic forecast out of your data.
- Determine your average sales cycle.Rather than simply looking at sales, use your historical data to define the average length of each sales cycle. Once you’ve determined how long it takes a prospect to become a buyer, you can better understand how long it will take for an action to turn into a sale.
- Identify your sales process steps.Each step in the sales process comes with different needs, goals, and probabilities of closure. Looking at your historical closing rates will help you determine those percentages for each step of the sales cycle. Figure out which parts of the cycle are most likely to turn into sales, tracking each opportunity in your CRM.
- Encourage realistic forecasting.Your forecasts shouldn’t be overly optimistic or pessimistic. Your sales team should know the top priority is delivering accurate information into the CRM so you can get realistic predictions from the system. Future sales shouldn’t be based on an individual sales rep’s viewpoint — everything should be based on data.