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Open Your Sales Force To a Quicker Close
By Mark Levit
The past decade has brought immense changes in technology and with it, marketplace competition. As a result, customer buying behaviors have changed as selling the product benefits is no longer the focal point of the sale�customer
satisfaction reigns. Customer satisfaction is the premier goal and as a result, the customer holds the negotiating power in addition to purchasing power.
To maximize efficiency and effectiveness, sales teams must adapt to changes in the product/customer power shift. Sales teams must succumb to meet the needs and wants of customers, especially in a mature market where technology has insured there exists little difference between products. In this case, creating differentiation rests on the shoulders of the sales team. In addition, they are responsible for cultivating interest, negotiating, closing a sale, and insuring customer satisfaction while being held accountable for their company�s profitability. Talk about a balancing act!
On the buying end of the spectrum, companies have consolidated vendor relationships. Many now make large purchases from a handful of vendors, much unlike the past�many transactions from a myriad of vendors. In essence, the customer base has contracted, leaving sales teams skirmishing for prospects. It is now imperative that sales teams prove themselves�customers have an abundance of suppliers from which to choose. One miscalculation by your team can ensure you don�t win the prospect�s business.
With all that in mind, how can you prepare your sales team to reel in the prospect and minimize the length of the sales cycle? Organizing your sales team effectively, selecting the right accounts, and responsible use of closing tactics are some ways to get the contract signed quickly.
Getting Organized
With so many ways to organize the sales team, which one is the best? Dividing your sales team geographically and then by account is the most common and efficient way of delegating responsibility. It is important
that the prospect maintain contact with the same person or sales team. If a prospect is shuffled from sales person to sales person, they tend to get frustrated and feel as if they are not receiving enough attention.
Another way sales teams are often organized is by product or service category. One team solely dedicated to product �A� and another to product �B.� That method has drawbacks as well as advantages. On one hand, you will have a team that specializes in the product. On the other, each team will have a heavy account load, unable to give each prospect undivided attention like it would by divvying up the team by account.
Efficient organization of the sales team reduces the length of the sales cycle by giving quality customer care. Prospects given undivided attention feel like their business is valued, not just sought after. Quality customer care generates more signed contracts, which in turn generates revenue. It pays to be organized effectively.
Bigger Isn�t Always Better
It is a good idea to steer your sales teams toward the best possible prospects. But, there is no sure-fire way to select the right accounts. The adage, �don�t put all your eggs in one basket,� applies here. Big accounts generate big payoffs, but the sales cycle for them can
be incredibly lengthy and not all firms have the resources to court a prospect for long periods of time. Smaller accounts provide income in generally less time as the buying process is simpler and there is a centralized decision-making process instead of the large-account diffused-authority where it is more difficult for the decision making team to come to a consensus. A mix of large and small accounts is ideal. One type generates (almost) immediate income and the other, big payoffs.
There are a lot of mid-sized companies that do not fit the models described above. When size is an issue, it�s best to look at the characteristics of the buying matrix. How simple is the buying process? How can you make it simpler? Is approval needed from another party within the organization? Also, is the sales potential high or low? When a customer has low sales potential, the transaction has a low testimonial value. The opposite applies for customers with a high sale potential.
More often than not, the size of the account is an indicator of how long your sales team will be courting that prospect. Bigger accounts mean greater potential revenue with the implication that buyers will spend considerable time shopping. The opposite is true for smaller accounts. It is important to factor in the potential of the account to allocate your sales budget accordingly. The sales cycle is usually quicker with smaller accounts, but the payoff isn�t as hefty.
Risky Business
Risks are issues that are can easily be overlooked as sales teams focus on closing the sale. More often
than not, a prospect�s career can be at stake if a bad purchase decision is made. The larger the account, the truer this is. One way to reduce this risk is performance based pricing. The price diminishes only if the product performance diminishes in quality, or if expectations are not met. The prospect generally won�t be as hesitant to sign a contract with a performance based pricing clause.
Other prospect concerns can come from the buyer�s switching costs. If you are trying to sell software to a mid-sized or large corporation, how much time and money will it take for the buyer to switch from their current product to yours? Can your software be integrated in anyway? As simple as it sounds, it�s helpful to put on the buyer�s shoes. If you were contemplating purchasing that product or service, what assurances would you like from your seller? Any type of risk�real or perceived�delays the sales cycle.
Risks often go unaddressed as both the buyer and seller are too focused on the deal to think about the aftermath of the purchase. Essentially, the more radical the product, the higher the switching costs and the riskier the transaction. If your product�s switching costs are high, expect to work hard for the contract; on the upside, your client would think twice about switching away from your product or service once you have their account. The general rule is the lower the switching cost, the more competitive the market.
Racing to the Close
Closing a deal quicker is more likely to occur if there is some urgency to the sale. This urgency could be in the form of an appeal to the time sensitivity of the product or service, or when a competitor boasts an increase in market share, or some other event that makes the offering seem irresistible. If a customer knows the product can be bought for less at a later date or an emerging technology can deliver
better functionality, there is no urgency to sign.
One tactic is to put the deal in context. Perhaps a prospect�s competitor is contemplating using the same technology in their business. Remember, the first in an industry to acquire certain know-how or products before their competitors have the �first mover� advantage.
Another not so favored tactic is to be frank with your prospect. Perhaps your company cannot spend additional time and resources with the customer without some type of commitment. Situations like these must be handled delicately, as the customer can take offense and such damage cannot be undone.
Charging upfront can also eliminate customers that are not sincere in their interest. This can be a little tricky, as the customer can perceive your company is out to �make a quick buck,� when an upfront obligation is required. To avoid being perceived as a charlatan, a money-back provision can be parcel to the upfront payment agreement.
Sealing the deal in less time encompasses more than savvy selling techniques. Even the best salespeople, if not organized correctly or not pointed in the right direction, can foil a deal. There is no magic wand to make a sale, but these few simple suggestions can help you better manage your sales in its foreign markets.
Discover more ways to support your sales team. Call our managing partner Mark Levit at 212.696.1200 to arrange a consultation. Or [click here]!
