Research from Implisit suggests that the average lead-to-opportunity rate in B2B sales is 13 percent, and that only 6 percent of those opportunities convert to deals. By that logic, a mere 0.78 percent of all B2B leads become a sale. What is even more alarming is the fact that it takes an average 84 days to turn a lead into an opportunity, then another 18 days to close the deal.
It's understandable, then, why salespeople exhaust themselves getting to the finish line. When they reach the proposal stage, they take an "any means necessary" approach to secure the deal. At this point, though, sales reps should actually continue to take their time to convince prospects to commit to bigger contracts.
And in doing so, sales teams should strategically utilize their sales pipeline. Rather than add more leads to their funnel, sales reps might instead focus on increasing average deal sizes to more easily reach their monthly or quarterly sales targets.
Below are four strategies my own team at Tenfold and I use before we send clients -- even price-sensitive ones -- a proposal to close a larger contract.
1. Create obvious upsells.
After you introduce a prospect to a product the customer loves, sell an add-on or complementary service that will help the customer extract more value from the purchase.
In this context, FunnelEnvy founder Arun Sivashankaran lists five types of upsells sales reps can use:
Full-service solutions: This helps customers overcome the barriers they may face in adopting a new product or service; to help them get started, you provide full support and ongoing product or service management.
Coaching or consulting: Some clients need assistance applying your product or service to their unique business.
Results acceleration: Everyone wants to get results faster; salespeople who can help facilitate that should ask for an additional fee.
Product or service customizations: It is rare that a single product works perfectly for every customer. So, be flexible and offer your clients the option to customize their purchases for a premium.
Exclusive content: Provide users with premium webinar recordings or an invite to an upcoming training course that will help them develop mastery of your product or platform.
2. Explain the opportunity cost of low-priced packages.
To hedge their risk, customers may agree to license your lowest-tier product with a limited number of seats to save money up-front. This gives them the chance to explore the inner workings of your platform before they commit to a bigger purchase. Unfortunately, this may negatively impact the results your client may have using your service.
For example, an internal communications tool like Slack works best when it's used by everyone within an organization, not just a handful of employees doing a pilot program. At Tenfold, we have seen that customers purchasing our Enterprise package experience a 50 percent bump in productivity with time-saving extras such as Next Dialer, a feature that helps salespeople queue up back-to-back calls from prioritized prospecting lists.
Although our Pro and Team plans are guaranteed to help sales teams close more deals faster and more smartly, they miss huge earnings opportunities without all of the special features that come with our Enterprise plan.
3. Lock in fixed prices.
As your business and product evolves, so will your prices. Remind your customers that your prices are subject to change at any time unless they make long-term commitments now to lock in current prices. If, historically, you have raised prices 10 percent year-over-year, explain that to customers. This provides them with the incentive to commit to extended contracts (for two years or longer) at preferred rates that protect them against future price increases.
To sweeten the deal, offer customers a month or two free when they sign a long-term contract.
4. Swap discounts for value-add extras.
Customers love a good deal. And they are shameless about asking for a discount. Although a strategic discount can instantly close a deal with a lead you have been nurturing over the past few months, consider holding out a short while longer while you figure out a way to bake additional value into your offering to get your prospect to agree to your original quoted price.
Upgrade this customer's service warranty from one year to five years. Or, throw in a free subscription to an online training course you host.
Whenever possible, avoid slashing your prices to close a sale. That way, you will consistently close bigger contracts and earn a larger commission.