For Diane Hessan, selling is a lot different than it was just a
few years ago. Sales cycles are longer as prospects convene
15-person committees to debate even the smallest sales decisions.
Customers demand to see a definitive ROI before they'll buy,
and they ask for more price breaks when they do.
"It's just a much more challenging sales
environment," says Hessan, CEO of Communispace, a
40-employee software company in Watertown, Massachusetts, that
helps blue-chip companies get customer feedback and insight over
the Web.
Hessan and the company's four in-house salespeople are
putting more emphasis on solid relationships with existing
customers, and the company's implementation people are much
more involved in the sales process. A referral program pulls
promising leads from customers, and each resulting sales call is
customized to the prospect much more than in the past.
"We're trying to reduce our ice-cold [sales] calls,"
Hessan says, "and we're spending a lot of time collecting
ROI stories and using them in our sales process."
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Hessan, 49, isn't the only entrepreneur navigating a sales
climate that's gotten a little better but still leaves much to
be desired. When sales and marketing research firm CSO Insights
surveyed more than 1,300 sales professionals for its report on
sales effectiveness in the fourth quarter of 2003, only 49 percent
of sales reps met or exceeded their quotas for the past year-the
lowest percentage since 1994. Even more startling, 70 percent of
the study's participants were small businesses with fewer than
50 employees. "For the under 50 [employee] group, it's
even worse. For them, quota attainment was 46.6 percent," says
, a partner at CSO Insights and co-author of the
firm's sales-effectiveness study, released in February 2004.
"It's fair to say that virtually everything is going in
the wrong direction for salespeople."
It takes more forethought and way more strategizing to meet
today's biggest sales challenges. "How you sell is
becoming as important, maybe more important, than what you
sell," Trailer says. Here's how successful entrepreneurs
are overcoming their sales challenges.
Sales Challenge No. 1:
Increasing Sales Effectiveness
Making effective sales calls is one area where salespeople are
falling short. A sales-effectiveness study of nearly 2,300 sales
leaders conducted late last year by Reno, Nevada, sales training
and consulting firm Miller Heiman found 67 percent of sales
professionals believe their sales teams aren't making enough
calls to add good leads to the sales funnel. In addition, 6 out of
10 say their sales departments aren't qualifying leads as well
as they should.
For Mike Robson, building greater structure around the sales
process has been key to increasing effectiveness. Robson, 39, is
founder and CEO of ATA Services, a 48-employee company in Salt Lake City
that maintains, refurbishes and brands existing ATM machines at
banks and credit unions around the country. He's tightened the
sales team's reporting procedures, monitoring the progress of
the company's four-person sales team through daily call
reports. Those call reports keep Robson posted on sales proposals
and the salesperson's strategy going into a selling situation.
More structure is generating more sales: ATA Services' sales in
two of the four sales territories topped $1 million for the first
time last year, and the company projects sales of $6.5 million in
2004. "We've had to become better at selling. We used to
go by our gut, but we've moved to a more structured
system," says Robson. "That's helped us."
Successful sales teams are establishing multiple contacts within
companies that put them on the CEO's radar from a variety of
different directions-marketing, IT and accounting, to name a few.
They're also changing the way they approach prospects. Today,
research combined with highly qualified calls to set up
informational meetings with prospects is hot; overscripted
telemarketing calls are not. Direct marketing is out; creating
"safe venues"-webinars, breakfast meetings,
research-report release events-to meet prospects and build
credibility is in. "The space is so crowded that the way to
get me to understand you is to give me some value," says Sam
Reese, CEO and president of Miller Heiman. "The sales call
comes afterward."
Steve Johnson is founder and president of G2 Safety, an
Anaheim, California, distributor of gear designed to protect
against workplace hazards. A few years ago, Johnson, 35, relied
solely on inside sales and direct marketing to drive traffic to the
company's Web site. But now, G2 Safety is putting more boots on
the ground, having recently hired four territorial sales reps, with
six more to be hired by year-end. And the company is also joining
trade organizations to identify quality leads. G2 Safety's
sales hit $1.5 million last year, and Johnson forecasts sales of
more than $3 million in 2004. "We originally thought we could
do direct marketing only," Johnson says. "[Now] I think
you need to do everything."
Originally published in the August 2004 issue of Entrepreneur Magazine
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