Revenue Growth Doesn’t Always Come From More Leads
Everyone typically thinks that having more leads is better, but it’s not always the case. More frequently, companies have enough leads, but they’re not optimizing the follow-up process on those leads to close them faster and more frequently.
Maybe this is your company, or maybe not. One way to find out for sure is to know your conversion rates at each stage of your sales process, or as we like to refer to it, your revenue cycle.
You need full click to close, from the first time someone visits your website to the time they sign your paperwork. Each stage in that buyer journey and each touch point has a conversion rate associated with it.
The only way to know if you’re optimizing your leads and your opportunities is to know these numbers.
If you don’t know them (or can’t get them), that should be your first task, and we can certainly help. We set up benchmarks on company revenue cycles as a standard part of our work with clients.
A Comparison Study For Your Revenue Cycle Metrics
In other words, “How do we know if we have enough leads to hit our revenue goals?” We’re 18 months into our use of our own Cyclonic Buyer Journey™ models to assess client pipelines, and we now have enough data to publish baseline data.
Here what a standard revenue cycle looks like from click to close. How does your company compare?
Just to be clear, this is not what you should be shooting for – this is on average what our research shows as representative of the companies we’ve looked at over the past 18 months. You can use this to compare your company’s metrics.
To give you another data point, here’s what a current client’s revenue cycle looks like. You’ll see the differences are dramatic. With the same number of website visitors and the same number of leads, the improvement toward closed new customers is 230% percent.
Just by focusing on doing a better job at nurturing and providing a better prospect experience, a company went from three new customers a month to 13 new customers a month.
What Does The Sales Improvement Program Look Like?
If you’re looking to tackle this at your company, the best way to approach it is with the Square 2 prioritization methodology. What’s going to have the biggest impact on results for the least amount of effort? Start there.
In most cases, that means starting at the end of the buyer journey and at the end of your sales process. The fastest way to impact revenue is to improve your close rate on proposals submitted.
Good news; there are a lot of ways to make improvements in this area. Here are just a handful:
Take a prospect’s view of your contract or agreement - Your customers look at your contracts and agreements and make judgments on how easy or difficult you’re going to be to work with going forward. If your documents are filled with legal jargon and contractual language (regardless of whether it’s necessary or not), they’re going to be anxious. If they’re not lawyers, they are going to only feel safe if they send the documents to an attorney or their legal department for review.
Remember, our goal in sales is to make prospects feel safe. Legal contracts do the opposite. You also know contracts that go to a company’s legal department always come back with changes. This usually adds time to your sales cycle.
Limit the legal, if you can. Try to keep these docs short and in simple English. You can also walk your prospects through the documents, answering their questions and keeping them feeling safe.
Go back and review each part of your proposal – One of the weakest areas we see consistently is how companies put together their proposals. In most cases, these are overly focused on the company and not nearly enough about the prospect. These decks or docs should be 90% about what you’re going to do for them, the value you’ll deliver, and the business outcomes and results they should expect. The remaining 10% can be about you and your team, your history, your awards, etc.
Also, don’t send these proposals without offering to walk your prospect through them step by step, line by line. Again, your goal is to make sure your prospect always feels safe. When you’re not available to answer questions, people feel nervous.
Adjust your sales process to send these docs over five minutes before the call or meeting that’s designed to walk prospects through every detail of your proposal. This ensure they’re never concerned and that you’re available to answer questions immediately.
Look at the experience associated with delivering the proposal and or agreement – Keeping our focus on helping prospects feel safe, do you create your proposal and then send it over to your prospect, or do you co-create the proposal with them so that when it arrives they’ve already seen or talked about some of the components?
People don’t like surprises. When you go away, create the proposal and then dump it in a customer’s email box, it’s very likely to be a surprise to them. Instead, co-create it with them.
Here’s an example: A client asked us to come in at $11,000 a month. But when we evaluated their goals and what we needed to do to get them to their goals, we needed $13,500 a month. Instead of putting our proposal together for $13,500, we hopped on the phone and explained the situation. The client then gave us approval to go over their budget. When they received the proposal, it wasn’t a surprise.
Make sure you build into your sales process the opportunity for a few co-creation touch points to bring your customer into the proposal development process.
Review how you handle reference requests – Every complex sale requires references. How do you handle it? Do you put them in touch with three of your customers and allow them to handle the scheduling of the reference calls? You know this can add weeks to your sales cycle, introduce risk and, depending on the reference, work against you making your prospect feel safe.
Instead, try a reference reel. This is a video reel of current customers talking about their experiences with your company. It’s delivered proactively right before prospects ask, and you get to control the reference, ensuring risk is limited and everyone feels safe. Done right, this can shave a week or more off your sales process.
Map out what happens after the proposal is submitted – Finally, what do you do when your best prospects go dark? They said they would get back to you, but despite emails and calls, days have passed since you’ve talked. This is a big challenge. The longer your prospect is dark, the less chance you have of closing them.
You need a defined and well-designed process to handle this. What emails and phone call messages do you use to get your prospects to come out of the dark? Do you even have these tools? You need them, and you need them now.
At Square 2, we use what’s fondly referred to as the “close-the-loop” email. It’s an email that gets our prospects to tell us what’s going on, and it allows them to give us the bad news that we’re out or let us know what is going on. It works like a charm. About 90% of the time, we’re not out; they’re dealing with other priorities and we get them to let us know.
This is just one of the conversion points in your revenue cycle. Upgrades and sales process improvements like this exist for each of the conversion points.
It’s possible you don’t need more leads. You may just need to better handle the leads you have to produce a higher close rate and a shorter sales cycle.
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Posted By Author Mike Lieberman, CEO and Chief Revenue Scientist
Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.