The Klog value series details three key sales values: the sales funnel conversion rate, location on stage, and stage reduction.
In Europe, we are still quite fresh on our journey to data-based information. However, we have spent our US counterparts selling and accelerating fish products. $ 1,000 on the seller.
These tools and investments define our training, sales activation strategies and sales acceleration methodologies. But he really eats something. Do we do the basic analysis to determine what we invest in, in what order, why and in what ROI we could achieve?
Let’s start with the first metric, sales funnel conversion rate.
When it comes to revenue, we all want to be a hero and prove that we moved the needle for one of the three sales levers: volume. value, and speed.
Our businesses want to sell more, faster and for higher values. The conversion rate of the sales funnel, if explored and capitalized on in detail, will have the greatest impact.
I will experiment a bit here and use a « real life » business as an example:
Company: ReachOut & TouchBase.io
Average order value: GBP 10,000
Earnings rate: 22%
Average sales cycle: 41 days
Monthly income: £ 200,000
Monthly pipeline generation target: £ 910,000
Now, let’s dive straight.
Step 1: Mathematics
Calculate the% conversion rate between each sales stage. In the case of ReachOut & TouchBase.io, let’s look at the conversion from Talk to Proposal.
Number of opportunities that reached « Proposal » / number of opportunities that reached « Under discussion » x 100
= 200/350 × 100 = 57%
Let’s also pretend that our calculations got something below:
Conversion from Discussion to Proposal (57%) is clearly the biggest deadlock and biggest disadvantage to winning more offers, in fact.
Step 2: Granularity
Now we need to divide this level by region, line of business and sales level to really understand where we can actually influence the conversion.
For ReachOut & TouchBase.io, the numbers look like this:
Immediately, we can see that there is a 24% difference between Mark and Amir. This is a huge variation on such a specific part of the sales process. It is also clear that this is the lowest conversion rate of all in the funnel, and as such we must address.
So what do Amir and Mark do differently at this stage? How could Amir’s approach benefit the wider team? And how can we arm the team to help them in this crucial part of the funnel?
Step 3 – Identify the issue / issues
The list could be endless here and will naturally look different depending on your business. However, when it comes to on-stage conversion, it is usually one of the following:
1. Speed or quality of customer documentation
2. Ordinary objections of the buyer
3. Inability to drive an emergency
4. Any transfer of sales that may take place – ie SDR to Sales, Sales before sales
5. The conversation moves away from value to something technical
6. The process of rounding several customer stakeholders
7. Internal processes or bureaucracy of the buyer
8. The sales format shifts from human interaction to documentation
Whatever your problem, diagnose and prescribe …
Step 4 – Remedies
We may then want to look at how any of the following can have an impact or help our situation.
1. Sales activation tools
2. Marketing content
3. Sales approach / Value proposition / Emergency stories
4. Coaching / Shadowing Objective
5. Data enrichment
6. The price
Step 5 – Results
Undoubtedly the best part of the whole process, but for some reason, one step was often missed, leaving us in the dark about how effective our investments are.
Based on the above values, ReachOut & TouchBase.io requires £ 910,000 to reach the £ 200 revenue target. You just have to trust me!
Now if we improve the Conversion Talk on proposal from 57% to 62%, the drum roll please….
The new revenue figure would be £ 248,622. To stay- 50 pounds extra pretty close. Not too hectic for a day’s work.
It is imperative that you have the tools and mechanisms in place to monitor how these results change, justifying and consolidating remedies.
Step 6 – Repeat
We have steps from 1 to 5 licking, so now it’s time to deal and move on to the next conversion stage, which for ReachOut & TouchBase.io is the negotiation proposal.
In this case, I moved clearly Volume the sales lever leading several offers through the pipeline. However, it is very likely that you have taken a good approach in approaching this stage Speed of these offers and Value.
Therefore, we now manage your sales funnel conversion rate, increase your sales value game and more by calculating your location and reducing steps.