2. Avoid ambiguous or overlapping sales stages at all costs
Your sales process should have clearly delineated and progressive steps.
For example, “Needs Analysis” and “Investigation” both imply that we’re engaged with the customer in defining their needs and requirements more closely. We don’t need both.
Make sure your sales stages are clearly defined and cannot be misinterpreted. Make the definition of them short, precise and easy to understand.
3. Sales stages must represent phases in the sales lifecycle
One of the most common mistakes is to deploy sales stages that denote milestones in the sales lifecycle. Common offenders include stages such as “Meeting Booked”, “RFI Received”, “Identify Decision Maker”.
All of these terms describe milestones. Sales stages should cover multiple milestones. These milestones are often called ‘leading indicators’ or ‘leading KPIs’.
You can read more about leading KPIs in our blog post: Lagging vs Leading KPIs – What Should you be Tracking?
2. A six-stage sales process you can adapt
Stage #1 – Prospecting
This stage should see your team focus on identifying targets that match your ideal buyer persona(s).
These potential buyers can be people who have expressed an interest in the product or service you’re selling, or who might reasonably have interest based on their demographics, industry, or other factors.
To ensure a healthy pipeline, prospecting should be an ‘always-on’ instinct across your sales team.
Stage #2 – Qualification
Typically, this stage is the first time your sales team attempt to make direct contact with a prospect. The goal? Simply to qualify if they are a good fit for your product or service.
At this stage that usually involves determining if a prospect actually wants what you’re selling, has the money needed and the decision-making authority to purchase from you at some point in the near future. If the answer to all of these is ‘yes’, then they’re qualified to move on to the next stage.
Stage #3 – Needs Analysis
This is where the rubber really starts to hit the road and where you might choose to deploy a sales methodology such as SPIN.
The SPIN methodology is a system for asking questions and that is exactly what is required at this stage. The most successful sales folks sell to the prospect’s needs. To do that you first have to understand what those needs are.
Asking probing questions will not only uncover the prospects pain points and needs, it also builds trust. The right questions will also help to determine competitive differentiation and allow you to lay potential landmines for your foes.
Although the process of intelligence gathering occurs throughout the entire sales process, it’s at this stage we should dwell longest and deepest.
Stage #4 – Value Proposition
By this stage we should be confident we’re talking to the right people and that they are in a ‘buying mode’. We should also have clarity about the pain points and needs that have driven them to this point.
Now is our chance to bring together all of the intelligence gathered and formulate our value proposition. Note the deliberate use of the term ‘value’. If your team attempts to sell on features, they will very quickly be reduced to a price and discount discussion.
This situation is best avoided by focusing on the benefits to the customer and the value they can generate from deploying your solution. The prospect will also be more easily able to justify the expenditure if they understand the value the solution will generate.
Taking this approach will make you a ‘trusted advisor’ in the eyes of the buyer. You have taken the time and trouble to understand their business problem, figure out the ideal solution and determine the benefits and value it will help them achieve.
Stage #5 – Negotiation
Once our clearly differentiated value proposition has been delivered we are in a position to firm up the details with a formal costed proposal.
Now we can move forward into the negotiation stage. This stage should see the delivery of a fully-costed proposal to support the value proposition previously presented. The proposal should contain the cost justification and Return-on-Investment models used to build the value-based solution. This allows the prospect to utilise these details in their internal sign-off process.
A considered ‘close plan’ should be our next target. It should clearly determine how we plan to navigate from this final stage to a successful outcome?
Stage #6 – Closed (Won/Lost)
Closing opportunities exist throughout the lifecycle of an opportunity. For example, closing on securing the initial prospect meeting. In fact, at each prospect interaction the rep should be closing the prospect to agree on the next appropriate step. Each of these smaller victories leads to the final closing prize.
However, the work doesn’t finish once the deal is done. There is the matter of customer success to consider. After all, customer testimonials play an increasing role in the decision-making process. Smooth handover to the implementation team and the setting of regular customer success checkpoints are just a couple of the recommended post-close actions.
Next is the chance to consider this win as a launch pad. Where in the business could you land next? Other business units? Other geographies? This final stage should also be seen as the first stage of the next campaign.
Finally, if something goes awry and the result is a loss, don’t despair. Nobody wants to lose. But there is an opportunity to learn from these situations. Conduct win/loss analysis across a strong sample set of your deals to determine root cause for success and failure. Only then can you make the tweaks that will improve win rates. Lastly, set a win-back call task for a suitable date in the near future. After all, who knows how smooth or bumpy the implementation might be?
3. The difference between a sales process and a sales methodology
Sales Process – Your map to the destination.
Think of your sales process as a map that facilitates the sales & prospect journey. It details the steps required to progress towards the required destination (i.e. a closed deal). As with a map there are often multiple routes to the destination. However, broadly speaking, if the right milestones are achieved and the right stakeholders engaged, you can be confident that you will arrive at the desired end point.
Sales Methodology – The skills required to navigate the journey.
A sales methodology sits on top of certain parts of your sales process and provides the skillset of selling. One or more sales methodologies can be deployed, allowing you to execute your sales process as effectively and efficiently as possible.
A sales methodology can be defined as:
“The learned behaviours, tactics, and strategies used by a sales team to execute and fulfil the sales process in a professional and conversational manner.”
To highlight, let’s pick an example. Take Neil Rackham’s SPIN Selling methodology. SPIN is a system for asking questions. In fact, it’s probably the best methodology for asking questions there is. But it isn’t a sales process. It can, however, be used at certain points within any sales process.
Having defined the sales process – we are done, right? Well no. You really need to instrument the entire sales process to determine its efficiency. Sales leaders are increasingly managing using leading sales indicators.
4. The typical leading indicators you should measure
Sales leaders manage their sales team and process using leading sales indicators. They take this approach because it’s proven to “maximise middle performers”. In other words, they use this approach to get more from their existing sales resources. They also use this data to determine if there are any friction points across their sales process that require attention.
The Sales Executive Council suggest that:
“A 5% performance increase in middle ground sales reps yields over 70% more revenue when compared with a 5% shift in top performers productivity.”
What do we mean by ‘leading indicators’? Well, these are the high-value steps that move us along the journey towards a closed/won deal!
Let’s take a closer look:
Lagging Sales Indicators track what has happened (think of them as rear-facing). For example, “Close £100K per quarter” would be a lagging metric. And because they are rear-facing, lagging KPIs are very hard to influence. By the time you have measured the outcome it’s too late to influence it. Which is why sales leaders have started to focus on leading indicators.
Leading Sales Indicators are the steps needed to reach our lagging metric (think of them as forward facing). For example, we know that if we have enough ‘meaningful’ calls every day that we are more likely to close more revenue. So, a good leading KPI would be ‘have 30 meaningful calls per day’.
You will notice that in both cases the metrics have a quantity and are time bound. Together these form a critical factor in making sure that we achieve the right level of sales cadence needed to achieve the overall sales objective. In other words, to ensure we are running fast enough to hit our sales target.
Example leading indicators for our six-stage sales process:
Stage #1 – Prospecting:
- Create 30 leads per week that match the buyer persona(s)
- Create 5 ‘hot’ leads per week
- Capture key lead information (data quality)
Stage #2 – Qualification:
- Identify decision maker
- Identify influencers
- Scout for 5 new contacts at each account
- Convert leads to pre-pipe opportunities
- Identify need & pain points
- Confirm budget
Stage #3 – Needs Analysis:
- Book prospect discovery meeting
- Identify competitors
- Document prospect pain points
- Build Return-on-Investment model
- Identify business sponsor
Stage #4 – Value Proposition:
- Document prospect value proposition
- Build prospect justification case
- Present value-based solution proposition
- Handle outstanding objections
Stage #5 – Negotiation:
- Issue pricing quote
- Deliver solution proposal
- Create a close plan
Stage #6 – Closed (Won & Lost):
- Handover to implementation team
- Setup regular customer success touch points
- Investigate opportunities for expansion to other business units / geos
- Create a win-back task
- Internal sales learning review
- Conduct a win/loss analysis
Why not download our Ultimate KPI Checklist to learn the 70 KPIs you should be tracking?
5. Drive engagement with your sales process
One of the biggest headaches for sales management is driving engagement with and adherence to the sales process. Plenty of time and trouble (not to mention historical data analysis) has usually gone into the construction of the process. Yet reps often choose to follow the path of a ‘lone wolf’ instead.
One sure-fire way to drive adherence is to measure the achievement of leading sales indicators. Measuring them allows to allocate a ‘sales behaviour’ target as well as a ‘revenue’ target to sales folks.
You can read more about the positive impact of assigning sales behavioural targets here.
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