WHAT IS SALES VELOCITY?
...and why is it important?
Sales Velocity – this is the measurement the equation produces usually in dollars per day/month
Number of Opportunities – this typically means deals in progress but can also be isolated to deals won and lost to compare actual SV to prospective (ongoing) business SV
Dollars – average Opportunity dollar value in the pipeline – this could be revenue or profit
Percentage win rate – The number of times you compete and win reflected as a percentage – the time window for calculating this percentage is user-defined and could be historical, running/dynamic, or projected by the CRM system
The length of time it takes to close a deal – usually calculated in days and sometimes, to one decimal point.
SALES VELOCITY LEVERS
Each element of The SV Equation can be positively affected by the
application of specific treatments or levers depending on the situation.
Element Influences: Number of Opportunities
Lead Generation/Nurturing Process
Is it truly working and attracting the right prospects. If you have “suspects” raising their hand with interest do you have the right touch-points and formalized process to effectively move them from “suspect” to “prospect” leveraging a well-thought-out communication roadmap.
Time Allocation
No amount of process eliminates the need for the appropriate amount of outreach attempts but often mere activity is confused with effective activity. We need to analyze what activities are effective in moving through the sales cycle as efficiently as possible. Win analysis can help you understand how many activities are needed and what type of activity “blend” provides the greatest success. This allows a data-driven approach to time allocation
Engaging Website
Your very best salesperson is your website! Are you equipping that salesperson with the necessary engagement tools?
Value Proposition
Everyone looks at this and believes they “nailed it!” But our experience tells a different tale. All too often, the Value Proposition is merely a reflection of what “we” believe is valuable, not what a potential client would value. We have seen so many companies “enamored with their own elegance” they lose sight of the main purpose – what does it do for the client – that’s true value!
Element Influences: Dollar Value (Revenue or Profit)
Hyper-Targeting Methodology
Have we really done the analysis to deeply understand what makes up our best prospect? Have we conducted a deep dive into past successes to see which targets offer the highest level of revenue/profit for the effort expended? We want to hunt only that which will sustain us! We have seen all too often, salespeople willingly hunting a prospect that if they are successful will add little to the top line and erode the bottom line with inordinately high maintenance and costly interactions.
Opportunity Approval Gate
In our experience salespeople can all too often fall into the trap of “a deal is a deal is a deal” and chase low revenue potential deals on the belief that they offer huge upside. Now we know these prospects exist of course, but they are not as prolific as some would have you believe. A great best practice is to install an Opportunity Go/Nogo Gate early in the process before a prospect becomes an Opportunity. The criteria are specific to each client but obviously must incorporate the stated traits, characteristics, and attributes of the ideal prospect/client. Sure exceptions can be made but only those objectively vetted by sales leadership.
Upsell/Bundling
Another trap salespeople can fall into is leaving money on the table to get the “quick win.” The belief that they can always add after the initial deal is done can be overpowering for many. Superstars know the best time to “bundle or upsell” is during the initial deal consummation. If the additional services/products truly add value, you should not be averse to approaching it while “the iron is hot!”
Element Influences: Win Rate
Sales Process Utilization
The Sales Process is there for a reason. Those that use it as intended invariably win more consistently, forecast more accurately, and surpass their stated goals regularly. That said, we have witnessed it in various situations – a step is skipped because the salesperson interpreted a “signal” and tried to close the deal out of sequence, skipping a stage(s) only to find there is more work to be done. Now it is incumbent on sales leadership to assure they have the appropriate sales process completely aligned to today’s sophisticated buying process. We recommend a Sales Process Audit to assure this is the case
Negotiation Skills
Question: How much time/money did you spend on instilling and honing the negotiation skills of your sales team last year? How much did you spend on yourself or those collaborating with your salesperson during the negotiation phase of the sale? Now I can hear a few folks saying that they don’t negotiate – if that’s the case then fine – but I suspect someone in the process is negotiating something along the way – it’s the way of business today. OK, assuming you agree that your team has to negotiate during the process – how much do you think your client company spent on the same topic for their purchasing, strategic sourcing, or simple buyer functions? There are endless tactics and strategies used by purchasers today to assure they get the very best deal for THEIR COMPANY no thought to yours. We have identified 19 common tactics frequently used today in B2B purchasing. We can help your salespeople compete and win more often while maximizing the economic value of each sale
Effective Discovery
It is critically important to spend the appropriate amount of time and have a formalized Discovery methodology for this is where value is established and/or uncovered. Time spent here accelerates you through the following stages of the sales cycle – as a mentor of mine would remind me “you have to go slow to go fast sometimes!” That value will help during negotiation, proof points, and competitive differentiation. If you miss the opportunity to fully establish and quantify value during the discovery stage, it is all but impossible to go back or try to uncover value later in the sales cycle.
Confirmation of Value/Understanding
It is imperative to establish and confirm understanding, current costs, business inhibitors, and potential value offered with the prospect throughout the sales process and particularly before you move to the next stage. We have seen numerous situations where a salesperson “assumes” the prospect agrees or “gets it” only to be upended during the Proposal stage. Have you ever been confronted with the following question during the presentation of your proposal: “Where did those numbers come from – I don’t recall anything like that being put out there?” Ouch! Ouch indeed.
Element Influences: Length of Sales Cycle
Adhere to the Sales Process
I know we keep saying it and we won’t stop!
Sales Tools
Do we have the right ones and are we using them when we should and as often as we should? Tools like Value Calculators, Cost of Inertia Calculators (avoiding the do-nothing decision), written Executive Summaries to confirm and document what was uncovered, agreed, and disclosed. Does our CRM system house and present them for completion at the appropriate stage or event to streamline the use of those same tools? Automation makes this easier than ever now and allows for yet another point of competitive differentiation while providing a sense of “these folks are buttoned up – I feel safe doing business with them!”
Honesty/Realism
OK, this one is always hard for any salesperson, I know this only too well having spent a large portion of my career as an Individual Contributor. Each of us has to step up and say – “this deal is just not gonna happen!” All too often we keep the Opportunity on “artificial life support” when we know the sensible thing and actually the best use of our time, is to “pull the plug,” close it “lost” and find a new Opportunity worthy of our time, skills, expertise and effort. We have found in just about all client cases when we analyze their win/loss data – the losses have the longest length of sale! Think about that for a moment. Think of the additional time, effort, costs involved, and where else they might be applied. Establishing a consistent Opportunity review process can enrich your sales pipeline with highly closable deals that are worth pursuing.
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