"You've Got the Order." The words we love to hear. They're Priceless !!
Everyone wants more sales. So here's how. Manage your sales territory better. Bring in more prospects. Improve closing ratios, or do both.
Now increasing closing ratios is by far the easiest if you;
1. Go after the right prospects and opportunities, and
2. Go after the right prospects and opportunities.
Probability and Process
Any successful person learns process and probability – business person, athlete, gambler, sales person, etc.
Process – What's the strategy; what's the game plan; what's the method / system / …?
Probability – Based on conditions presented, what action has the best probability of success?
Let's apply this to closing ratios or going after the right prospects and opportunities.
Here are the probabilities for making sales:
o Existing Customers – Existing Products / Services – 67%
o Existing Customers – New Products and Services – 50%, (80% if they helped develop it with you)
o Old or Lost Customers – 40% Existing Products / Services
o Old or Lost Customers – 25% New Products / Services
o New Customers – Existing Products / Services – 25%
o New Customers – New Products / Services – 5%
This tells you how to manage your sales territory. That is, spend more time prospecting with existing customers. To be more exact, spend 50% of selling time with existing customers, 30% with old or lost customers and 20% with new or competitors' customers. Readjust your time allocations to the above and watch your closing rates go up. That was easy – was not it.
Now let's talk process for selecting prospects and opportunities
Sales Territory Management Starts with Building Your Opportunity Matrix
1. Using an Excel chart, list who buys, and what, and who does not buy. Enter all existing clients (and their divisions and locations) down the left column. Across the top row, list all the products and services you sell. Include new or potential products as well. Use categories if there are many products. Check off with a "+" the products / services existing customers buy and note your percentage if they also buy the same from competitors. Leave blank (for now) all the services and products they do not buy from you, but could. Indicate with an N / A's those boxes that do not apply or fit at all. Do not use dollars or quantities. You just want a simple visual.
2. Now list all the old customers. Here the rows will be empty. Make a note of what they use to buy from you with XX's. Then list competitors' customers. Note what they buy from the competitor with YY's, and things they do not buy from anyone, but could, or do it themselves. Finally list those that do everything themselves or you're not aware who / if they buy from.
This is your Sales Territory Management Opportunity Matrix – a visual of all the sales you could theoretically be making.
3. Now identify each opportunity by chance of them needing it – Way Out There (M1) to Out There (M2) to Likely Candidate (M3) to They Showed Interest (M4) – these are the marketing phases. Once a prospect gives you a good verbal indication there will be a purchase, prioritize into the selling phases – Qualify (Q), Proposal (P), Close (C). Fill in the Opportunity Matrix with the appropriate abbreviation.
Create this Matrix with your Customer Service / Engineering / Tech Support / Operations people. These people usually know more or have easier access to the client's people than the sales person. They can be a wealth of information about what going on inside your clients' organizations. Later they can be a great network for introductions to high level people. Managers should thoroughly review this at least twice a year, but sales people should update it monthly.
4. Now Build Your Sales Territory Management Action Plans
Your first mandated action is to keep the existing business. This is where my book – TAKE ME TO YOUR LEADER $ will help. It shows the actions needed to develop the relationships and leverage to retain and grow existing volume, as well as, get their other opportunities you do not have.
5. Now look at all the other accounts you do not have in the rest of the region. It's overwhelming I'll bet. So start prioritizing based on the statistics above. Note how much business is available from existing customers, either the competitors' share, or services they do themselves that you could sell. Then look at the rest. This visual with be very revealing and motivate you to prospect.
Knowing the inventory of sales opportunities will give you a handle on growth. You can now build action plans for keeping existing business and capturing other potential opportunities. Cover every opportunity in every marketing / selling phase. The farther down toward the sale the more energy / time you should allocate.
For example with a new customer you may want to do a low cost mailing campaign – minimal energy. For a competitor's customer, you may want to do some phone research to find the right people and then contact them (phone or in person) to learn their likes and dislikes of the competitors. For existing customers you should be spreading through that organization like a virus, meeting all the people impacted by your products / services, especially all the senior managers to learn likes / dislikes, issues, opportunities – high energy.
6. Now assign an action to every opportunity, even the 5% 'ers, and a date of completion. Use another excel spread sheet with a column for Opportunity, Action and Completion Date, and Who's Responsible. This is your accountability or tracking document. Without this, opportunities will be overlooked and ripe for competitors. Make different people responsible for different types of actions.
For example, Marketing does the mailing for the specified list of low potentials. The sales person calls the competitors' clients. Customer Service / Engineering / Technical Support practice effective listening and get the sale person introduced to the clients senior managers. The sales person should be the lead and coordinator to make sure each action by others is accomplished.
Managing the Sales Territory Management Process
Sale management should review the Opportunity Matrix and Funnel of Actions for each sales person to be sure all potential opportunities are covered and people are assigned for the scheduled actions. Managers should also review time allocations to be sure sales people are spending time on each category of opportunity in the right proportion.
I often hear, "We do this at the beginning of each year." or "We have to report this every month." My question is, "Do you forecast every month? Do you track the actions you'll do to insure the forecast will happen?" Usually it's the former. The focus of management has to be how well the opportunities are being attended – not forecasted. Besides, low and moderate potentials should never be forecasted.
The Opportunity Matrix and The Funnel of Actions for each sales individual or territory will produce (1) a reality check of whether the sales will be made as forecasted; (2) an appreciation of selling skills / deficiencies for each sales person; and (3) a vision about the future – where will next year's business come from. The manager can then begin directing, coaching and / or correcting before expected sales are lost or not met.
This is probability and process. This is how to select the right prospects and opportunities. This is what will dramatically increase closing ratios and this is what will increase sales.
And now I invite you to learn more.