Whether they had a tremendous 2017 or a difficult one, sellers likely hit the re-set button with the start of this new year. And that button push probably was accompanied by more aggressive quotas for those sellers to achieve in 2018.
So, what should sellers do to gear up for the coming year? As 2018 gets under way, here are five things I can share to help sellers get off to a good start.
1. Avoid stale quotes and proposals
Unlike fine red wine, proposals that have been in the sales pipeline more than 45 days old aren’t getting better. Many of them, in fact, are likely to have “no decision” outcomes.
So, if you’re the seller, what’s going on? There may be instances where your prospects have chosen a competitor and not given you the bad news. My suggestion is to send a snail mail letter, “return receipt requested,” to the highest level you’ve called on within the account. State in the letter how long the proposal has been outstanding, noting that you haven’t been updated on its status and that you intend to withdraw if you don’t hear anything back.
The hope is that your letter will cause the buyer to contact you and say there is still interest. If that’s the case, you can ask to revisit the opportunity (help facilitate a cost vs. benefit analysis) and see if a revised recommendation can be made.
If your letter doesn’t elicit a response, you can safely remove it from your forecast. While that’s not the desired outcome, you’ll have the benefit of a more realistic view of the size and health of your pipeline.
2. Create add-on opportunities
Sellers often believe that if customers have additional needs, they’ll proactively reach out. Certainly, close rates will be higher when there is an existing relationship vs. when sellers are closing new accounts. That’s why sellers should take a look at each client and try to determine potential business needs that might be addressed through the use of their company’s offerings; they should then proactively contact the key players who might be interested.
The key to initiating add-on opportunities is taking executives from latent to active need for a company’s desired business outcomes.
3. Be realistic with nurtured leads
If the cost of your offerings exceeds $50,000, you may want to take a hard look at the entry level that nurtured leads provide. My view is that many of those leads get sellers in touch with people that are doing product evaluations. So, those people may not be working with budgets and have not identified potential areas of value/payback that can be realised through the use of your offerings.
Ask yourself if the contact you’ve been given is a potential champion who can provide you access to the key players you must call on to sell, fund and implement the offering being considered. If not, I suggest you treat the contact as a coach that may be willing to get you an introduction to a higher level that may then serve as your champion. My thought is to gain access to people who will see value in your offerings.
4. Ask for referrals
Satisfied customers can be under-used assets, especially if sellers can help them quantify results.
My preference is that sellers break down benefits and values specific to titles and outcomes that have been achieved using those sellers’ offerings.
Once quantified, sellers can ask if their customers know of any other individuals or companies they could be referred to.
5. Plan a sales cycle ahead
When I was in engineering school, I was a “just-in-time” learner in that I studiously avoided professors who assigned homework and also approached midterm and final exams with some last-minute cramming.
Some sellers follow my academic model – and that’s not smart: In terms of their year quota, many sellers who are not YTD against their numbers believe they can close enough business in the last quarter to make up for their previous gaps. But this is a very stressful strategy, and there will be times when sellers run out of runway.
An alternative I’d suggest is for sellers to break their quota into monthly increments and multiply that number by the months in an average sales cycle. They can then estimate their close rates and set pipeline thresholds they should try to exceed.
Once they’re at the stage of interviewing committee members, sellers can then negotiate their activities and time frames via a written document with buyers (I call this pipeline “E”). Here’s an example of how to project ahead:
- A seller has a $2.4 million quota ($200,000/month).
- Her average sales cycle is four months and her close rate is 50 percent.
- Therefore, her “E” target is to close $800,000 or more every four-month period.
- At any time, if she is YTD or better, her E target will be $1.6 million in her pipeline.
- In a given month, any shortfall from YTD must be doubled and added to that $1.6 million; business development efforts must be ramped up.
Being aware of YTD performance to date and projecting the sales cycle that’s ahead on a monthly basis can reduce stress levels during Q4.
And reducing stress is good, right? I hope these tips can help make your 2018 a great, and de-stressed, year.
This article was originally posted here on Entrepreneur.com.