4 Ways to Cut Down on the Hidden Costs of Sales
How much does it really cost to close a sale? Sure, there’s the salesperson, the swagger and relentless pursuit of the deal (which all comes at a price). But there’s also a massive opportunity cost most companies overlook. Currently, sales reps spend a large portion of their time doing everything but selling.
For instance, according to a recent CMO Council study, nearly 40 percent of a rep’s time is spent creating presentations, customizing messaging and preparing pitches. All in all, this squandered time means your closers are only spending about half their time actually closing.
I have always said that the most expensive hour you will pay for during any given work day is a non-sales related hour. Obviously, the more time your reps spend on non-sales activities the less successful the company will be. Here are several ways to keep your salespeople happy and on the hunt:
1. Bring on the automation
Even the most skilled salespeople need the right tools at their fingertips. To save them precious time, you’ll need prospecting tools capable of growing your database with the most targeted leads.
If you don’t already have a marketing-automation system, try looking into one such as Eloqua, Silverpop, Marketo or Pardot. Also consider whether you’ll need a customer-relationship management program as well, and if these tools will be able to integrate and work well together.
Given today’s digital landscape, software-as-a-service models are often best because they give your team access to the tools they need anytime and with any device. By automating sales-funnel pit stops such as totals and targets, open accounts, new leads and opportunities and performance reporting, your sales team will be armed with this insight from the start -- giving them the necessary time to go and do something with it.
2. Join forces with marketing
Too often, sales and marketing teams fail to play nicely when it comes to nurturing leads. Yet, marketing can and should be a major part of your sales strategy. The benefits of leveraging marketing to both generate and qualify leads before they get into the salesperson’s hands are significant.
Take the time to ensure your marketing efforts are focused on the most effective methods. InsideSales.com recently published a study suggesting companies waste millions in time and resources on ineffective approaches to lead generation. While exciting and new, social media was found to be most overused tactic. Executive events, telemarketing, webinars and search marketing are generally the most profitable avenues for finding potential customers.
By deploying your marketing team as an effective ally for sales, closing deals will happen at a faster pace than ever before.
3. Lay off traditional processes
For centuries, sales leaders stood by rigidly structured methods when honing in on a potential customer. Even today, qualification criteria, reporting methods and activity metrics are all designed to keep the funnel running smoothly -- but companies are now finding the approaches that once helped streamline their processes are actually holding them back. Why?
Research from CEB describes a dramatic shift in the way modern customers seek out business solutions. Better informed than ever before, people are no longer satisfied by the salesperson’s predictable path toward simply filling a need.
Consequently, your sales team should be prepared with the skills and mindset necessary to not waste either party’s time, and instead identify who the new decision-makers are, what their business challenges are, what it will take to secure their partnership and how to deliver that insight in just the right way.
4. Run rigorous analysis
For sales leaders, the metrics we watch can make all the difference between a stellar quarter and a lackluster one. More likely than not, you’re already collecting this data, so make sure you’re using it to your advantage by identifying correlations between which activities lead to certain sales outcomes. You might end up redefining your team’s understanding of which metrics are worth watching and which aren’t.
For instance, early on at Domo, we discovered several non-traditional ways to measure sales performance that could deliver incredibly powerful insights. We used to consider total number of deals in the pipeline as a standard measure for evaluating sales progress -- it turns out, a different metric, pipeline velocity, was actually a much better predictor of monthly and quarterly numbers. Nuances like these can be hard to detect by just looking at the surface of your data without digging in for deeper analysis.
As important as sales are to driving an organization forward, there’s no reason why your pipeline shouldn’t run as smoothly as possible. Empower your salespeople by giving them the tools they need and removing the distractions they don’t. They’ll not only appreciate you for it and stick around, but also regain an entire day (or more) each week to do what they were actually hired to do.