Why Marketing (not Sales) should own B2B Telemarketing

This is a question that is often debated or even argued over in staff meetings and budget planning meetings the world over. Both Sales and Marketing departments can make a reasonable case for who the telemarketing or outbound lead generation team should report to.

The Marketing department will argue that telemarketing is a marketing function whose primary objective is to qualify and nurture leads until they are ready to meet with a sales person and be promoted to the sales pipeline report. They would claim that this is no different than an email marketing program designed to generate leads for the sales floor.

Of course the Sales department has been known to argue that when you start talking with prospects you have already started the selling process, therefore tight alignment between the telemarketing team and the sales team is critical to their success. Plus, the telemarketing team is often seen as a hunting ground for sales managers looking to recruit promising sales talent not afraid to pick up the phone and cold call a prospect.

To be honest, coming from a Sales Management background, in the past I have been known to side with the sales teams on this one, however, these days I am changing my tune…  Here is why.

It is all about the leads

A successful marketing department is one that consistently generates high quality actionable leads and sales meetings for the sales organization. The marketing team is obviously not closing deals and working to make quota, but rather setting the sales team up for success and giving them what they need to ensure the business meets its revenue targets for the quarter and the year.

An effective telemarketing or lead generation team will be 100% aligned to this goal. In fact, when the telemarketing team creeps across the line and becomes involved in the sales process their productivity as a marketing resource begins to diminish. Like they say, “you can’t serve two masters.” This team shouldn’t be distracted from their role of generating qualified leads and new business appointments by staying engaged with a prospect after the lead has been handed-off to the sales team.

Don’t have a telemarketing team?

Like many of the marketing functions today, the telemarketing effort can be outsourced to a specialized firm that can build dedicated programs or quarterly campaigns to execute the lead generation or sales appointment setting efforts for the business. By outsourcing the telemarketing function to a professional marketing firm, the marketing department can now easily leverage this traditional marketing channel without the challenge of building the technology infrastructure, recruiting and managing a telemarketing team and creating the processes and developing the skills required to make it consistently successful.

Accountable

Marketing leaders are more accountable to the business today for producing results than ever before. The days of creating campaigns and marketing collateral, then training the telemarketing team/inside sales team to deliver a targeted message just to find out all your work and investment ended up in the “circular file” or ignored are over. Now you will have to defend your campaigns and report the actual return on investment against a forecasted return.

Marketing leaders today do not shirk this accountability and are demanding the authority that comes with it to run their own outbound calling campaigns. Now marketing directors can be confident that their research and messages they have developed are leveraged to the benefit of the company. To accomplish this they are staking claim to the telemarketing teams, building their own teams or partnering with experienced lead generation and appointment setting firms to execute their campaigns under their watchful eye.

Therefore, I believe most B2B companies will be better served by letting the telemarketing team “market” while the sales team sells. Clear lines between the organizations with open communication and teamwork will allow the business to be most successful.

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , , , , , ,

No Comments

How to Calculate the ROI on a Lead Generation Program

Every marketing investment a business makes should have an estimated return on investment (ROI). This is necessary to be able to properly frame the expectations with the marketing budget holder as well as the sales department. The sales team will obviously benefit from the investment and they need to create a plan to support the program.

Below we have broken down a simple marketing investment a client shared with us recently to show how to quickly determine if a program meets your marketing ROI goals.

To keep life simple, we will focus only on the hard costs and not the soft costs like time you or members of the marketing and sales team might spend organizing or managing the program.

Here is the scenario we will use to illustrate the process and equation for calculating an estimated ROI. You will need to know or be able to estimate the following data points to understand the ROI on your next lead generation investment.

Calculating the ROI of a B2B lead generation campaign

  • (TMC) Total Marketing Costs: In our example, our client will spend $8,000 on a lunch-and-learn event for new prospects. Note: This cost included the food, venue and door prizes, as well as the cost of creating marketing materials used to promote the event and the cost of driving attendance.
  • (L) Number of Leads: They expected to get 12 new prospects to attend the lunch event at an upscale restaurant in the area.
  • (LO%) Lead to Opportunity Rate: For this group they expected 25% of the attendees to become Qualified Opportunities in the next 30 days.
  • (C%) Sales Close Rate: The sales team has an established close rate of 33% for qualified opportunities.
  • (ACR) Average Client Revenue: They know that the average revenue generated from a new client is $24,000 annually.
  • (GP%) Average Gross Profit Margin: The average gross profit margin for their solution is 35%.

With this data a Marketing Director can easily calculate the ROI of any marketing program on the back of a napkin. For this event it looks like this:

  • # of Leads (12) x Lead to Opportunity Rate (25%) = 3 Qualified Opportunities
  • 3 Opportunities x Sales Close Rate (33%) = 1 New Client
  • Average Client Revenue ($24K) X # of New Clients (1) = $24,000 in Revenue
  • Est. New Client Revenue from Program ($24K) x Average Gross Profit Margin (35%) = $8,400 in Gross Profit
  • Gross Profit ($8.4K) minus Total Marketing Cost ($8K)/ Total Marketing Cost  = 5% Return on Investment (ROI)

In summary, the following equation can be used to quickly and accurately determine the return on investment for any marketing program. In the lead generation or demand generation world, all marketing investments should be directly tied to new business opportunities and ultimately new business revenue.

The process is expressed as an equation below for easy reference.

((12 x 25%)33%)((24K x 35%)-8K)/8K = 5%

((L x LO%)C%)((ACR x GP%)-TMC)/TMC = ROI

Is this helpful? Do you calculate ROI differently? Please share your thoughts below!

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , , , ,

No Comments

How Marketing can Build a Pipeline for Sales

The ultimate role of marketing is to not only increase awareness and consideration, but to generate quality sales leads for the sales team. And of course, the role of the sales team is to convert the leads into opportunities that will close quickly and for top dollar. So, if it is marketing’s responsibility to help sales “fill the funnel” or “build the pipeline” we wanted to dig into some of the most effective ways to accomplish this is today’s B2B marketing world.

In most organizations a prospect isn’t added to the sales pipeline until there is an introductory or discovery meeting where the sales person has identified the sacred “BANT” (Budget, Authority, Need and Time-frame). This 1st meeting allows the sales person to understand the prospect’s challenges and where they can begin to introduce your company’s products or services as a potential solution to that challenge.

So, if it all starts with the qualified lead… how can the marketing department help the sales team by generating more quality sales leads?

In today’s B2B marketing environment there are 3 common strategies that marketers use to help the sales teams secure critical 1st sales meetings.

  • Content Marketing
  • Email Marketing
  • Telemarketing

Content Marketing

Of course, content marketing is all the rage these days and for good reason. By creating informative and entertaining content and sharing it for free on your website, you build trust and authority with your target market. These are powerful elements that can be used to increase consideration for your products and services. When visitors to your website attribute real value to your content, and a well thought out conversion strategy is executed to convert these visitors to sales leads, your website can be the goose that lays the golden egg!

Email Marketing

This is the old standard these days. Most businesses have some form of email marketing activity going on. Even though open rates have fallen over the years, when integrated with a sophisticated content marketing strategy; email can still pack a punch. The key is getting the prospects to engage with the business so that your sales force can quickly begin to qualify and build a business relationship.

Telemarketing

Some will tell you telemarketing is dead. However it is very much alive and still extremely effective because it is proactive and gets to the meeting faster than just about any other marketing activity. Whether you leverage an internal team for calling or you deploy an outsourced marketing firm for telemarketing, it should be considered. The most overlooked benefit to telemarketing is that even unsuccessful calls can have a very positive impact on your marketing efforts. A voice mail left with a prospect is a private and personalized “radio spot” that can be played more than once and even shared with colleagues. A professional outbound call can make an impact and increase brand awareness for new companies or new products.

As professional marketers, we now know that a multi-channel approach that leverages the benefits of all three channels can have a compounding effect on your marketing efforts. There are a number of other activities and investments that a marketing department can invest in, and each business and market is different, but today the above 3 should be staples for any marketing program focused on lead generation.

Please share your comments below. I’d love to hear what you think!

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , , , ,

No Comments

How to Get the Sales Team to Buy you Lunch

As a professional marketer there are a number of channels at your disposal to attract and engage your target prospects. You can potentially leverage any or all of the following:

  • Online Marketing
  • Channel Promotions
  • Print, Radio, TV
  • Direct Mail
  • Mobile Marketing
  • Social Media
  • Email Marketing
  • Natural Search

A successful marketing plan will certainly include at least a few of these channels. However, the ultimate goal of any lead generation efforts is to find, qualify and connect with new business prospects. More directly, the goal is to help the sales person schedule the first meeting. Once there is an initial discovery meeting scheduled with a qualified prospect, sales is firmly in the driver’s seat. Mission accomplished for the marketing department.

How can a marketing team amplify their efforts and ensure more actual sales meetings get booked for the sales teams?

Start with the end in mind. Marketing departments are increasingly leveraging the power of professional telemarketing teams that are focused specifically on making outbound calls and setting new business appointments for the sales force. With a telemarketing process, a marketing department can produce those actionable customer meetings that the sales team needs to help the business grow. The benefit of an appointment setting program is its ability to proactively engage, qualify and schedule meetings directly for the sales team under one marketing program.

Most other marketing channels are passive and have to inspire the prospect to take action. This can require between 5-8 touches before a prospect ever responds. Then, after the prospect has taken action, the lead is still only half baked. It will require either direct engagement by the sale force or several additional touches from an email nurturing campaign before an actual sales meeting is ever scheduled. This creates additional expense and more opportunities for the ball to get dropped.

Marketing departments often become frustrated with the sales team’s lack of urgency concerning the leads generated from other marketing efforts like tradeshows or website downloads. The marketing team wonders if the sales organization will take the lead seriously and follow-up with the prospect in a timely manner. It might also be difficult to track the lead back to the initial marketing efforts for ROI analysis once it has been handed off. After all, we have all seen a marketing generated lead get buried in the pipeline and incorrectly attributed solely to the efforts of the sales force.

When leveraging a telemarketing team as in internal function or as an outsourced marketing service, all leads are easily tracked back to the marketing expense. And because the lead has been fully qualified and a confirmed sales meeting has been booked, these leads are given top priority by the sales team. Sales people live for these meetings. Because these sales meetings are so tangible, the sales teams immediately attribute the lead and consequential opportunities back to your marketing efforts.

Don’t be surprised if the sales team buys you lunch when the deals close!

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , , , ,

No Comments

4 NEW Ways Marketing Needs to Help the Sales Force

Marketing has always shared some responsibility for this process by; increasing brand awareness while promoting the company and solutions. This is generally achieved through print and broadcast media, direct mail, online marketing, events marketing, PR, email campaigns, and other wide reaching marketing channels.

Along with driving brand awareness, marketing bears primary responsibility for increasing consideration and preference by developing a value proposition that gives the business an edge over the competition.

However, changes in how prospects make buying decisions have introduced additional demands on how marketing needs to help the sales teams. Here a 4 ways marketing can help sales grow the business.

Generate quality leads

Some responsibility for lead generation has always rested with the marketing department, but today most B2B selling organizations tag the marketing team with this critical function. Sales teams are increasingly counting on the marketing department to generate the inquiries, leads and even sales meetings that sales can convert into opportunities and new clients. It is no wonder that 69% of sales organizations report that consistently generating quality leads ranks among their top business challenges.

Define the challenges that target clients are encountering in the market

The sales team is usually “heads-down,” trying to close the next deal. While a strong sales person needs to stay tuned into current events and developments in their chosen industry, marketing is now taking on a more significant role in this area. Marketing and sales working together, need to identify the trends that are impacting how potential clients react to both the industry’s and the company’s offerings. As better information is available to buyers, it’s also critical that marketing and sales teams collaborate to position the company’s solutions in context with competitive offerings. Marketing must demonstrate “thought leadership” by defining the challenges clients are facing and how the solutions address those challenges.

Build strong value propositions

A recent report suggests that 95% of the visitors to a website don’t want to talk to a sales person, but 70% will eventually buy from that company or a competitor. In the past, sales customized the “pitch” based on the needs of the prospect sitting across the desk from them. But in today’s fast-paced digital world, a potential client may be further along in the buying process than ever before when they finally are engaged by a sales person. Marketing must work with sales to articulate the value propositions for the solutions being offered so that both online and offline messages address the needs of prospects earlier in the sales cycle.

Keep the resources and collateral ready and available

As the buying process extends out past the 60, 90, or even 180 day mark, sales teams need a deep library of resources they can draw upon to continue to demonstrate value and keep buyers engaged. A sales person can only ask, “Are you ready to buy yet?” so many times without being a nuisance. Marketing should be ready to deliver communication vehicles and offers like videos, interactive demos, promotions, case studies, etc.—all packaged for easy distribution by sales—that can minimize buyer fatigue during an extended buying process.

Keep the love alive. One aspect of the lengthening buying process is disengagement, where a purchasing decision gets put on the “back-burner” and the potential client disengages from the sales process. This can be due to an unexpected budget shortfall, the hiring of a new decision maker, momentum, etc. Marketing should take the opportunity to jump in to relieve the sales person, picking up the chain of contact with a series of emails, direct mail, postcards, invitations, and other strategies that deliver a constant flow of valuable content. This helps keep the company’s solutions top-of-mind with the potential client while the sales person is freed up to pursue more imminent opportunities.

What other ways can marketing departments help sales people close more business? Please share your thoughts below!

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , ,

No Comments

Cold Calling Master Class – An Interview with Mike Faherty on CONNECT! Radio Show

Recently I had the pleasure of joining Deb Calvert, President of People First Productivity Solutions, on the CONNECT! Radio Show. Deb interviewed me on the important subject of cold calling. We discussed cold calling strategies, as well as telemarketing and inside sales for B2B environments. I have included a recording of the interview below where I explore cold calling best practices and some of the lessons we have learned while delivering successful B2B telemarketing and inside sales programs for our clients at ProSales Connection, LLC.

During our interview I also discuss how to get our free whitepaper, “The 5 Secrets to Cold Call Success.” Please download that whitepaper and share it with you teams!

Thanks for listening to this informative interview. I hope you found the information and tips I shared useful in your daily selling. Please feel free to ask any questions below and I will respond personally. If you would prefer, you can send me questions at @ProSales_Mike as well.

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , , , , , ,

No Comments

Increase Sales with Better Sales Questions

Poor questioning habits from sales people are one of the single most significant reasons sales people are not consistently successful. Struggling sales people have unproductive sales meetings every day that could easily be saved with just a single well timed question. The challenge is that the single question is never the same question, and therefore can’t be given to the sales person to ask and can’t be paid for with a high dollar sales training program.

The skill and the right to ask that question must be earned.

“How is it earned?” It is paid for with lots of other questions. Let me explain.

There are 2 basic reasons that sales people don’t ask enough or “the right” questions when in a selling situation.

  1. Risk of losing credibility
  2. Lack of questioning skill

Most sales people understand that they must possess credibility to be successful as a sales professional. Few sales people need to be taught this basic fact of human interaction. However, their innate impulse to establish or retain credibility causes them to resist asking questions. They think, “What happens if the prospect gives me an answer I don’t understand or I am not prepared for?” “What if the client figures out that I don’t really understand their business that well?” Most sales people would rather lose an opportunity than “lose face” with a client or prospect. So, how does the sales person overcome this challenge?

Prepare for the sales call

Take 15 minutes and look through the company’s website. Read the first few pages of their quarterly report to investors. Read a couple of the company’s blog posts and latest news clippings.

Prepare 3-4 primary sales questions

After researching the client for a few minutes, draft 3-4 well thought out questions that will get the conversation headed in the direction you want. Then practice asking them out-loud so they sound natural when you ask them. The more you do this, the easier it becomes to prepare these questions. In most cases the best questions can be edited and reused with different prospects.

Next, be prepared to “drill down” with follow-up questions. This is the silver bullet if there is one. The more you drill down on a topic, the richer the conversation. The richer the conversation, the more credibility you earn and most importantly… the more you learn about your prospect, their industry and business in general. Each and every one of these conversations serves to inform every conversation you will have in the future. This dynamic is not in play when you simply present your solution and respond to questions from your prospect about your solution.

Sales questioning exercise

Here is an exercise that will help you have deeper and more insightful conversations with your prospects and clients.

Start with a well thought-out and researched primary question that will help you uncover a pain point that your product or service can relieve. For example:

Primary Question – “I read in your quarterly report this morning that your CEO has made expanding your service area nationwide a priority for this year. HOW is your team involved in supporting that objective?”

(Listen carefully to the response and attempt to ask a Who, What, Where, When, Why follow up questions)

WHY is this project such a high priority for the business?

Interesting, besides your team WHO else is involved?

WHERE does the project stand today? Are you on track?

WHEN do you expect to finish this phase of the project?

WHAT will happen if you can’t finish on time?

As a professional sales person, you should now have all the information you need to align your solution to the specific goals, priorities and time-frames you have uncovered. In addition to your stronger position with the client you have more details about how and why clients in your market make decisions. The most successful sales people will leverage this insight in future conversations with other prospects. Using these principles will elevate an average sales person to a trusted adviser in short order.

Practice this Line of Questioning exercise with your colleagues, sales manager or sales team. Make it a goal to ask better primary questions and at least a 2-3 follow-up questions to help uncover the real opportunity.

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , , , , ,

2 Comments

The Secret to More Sales Meetings Today

We set a lot of sales meetings for our clients… in fact, our clients are consistently surprised at the number and the quality of those sales meetings. Obviously, as an inside sales and marketing firm that specializes in B2B appointment setting you would expect us to be good at this.

We love hear that we have set a meeting for one of our client’s dream prospect. They tell us stories of how long they have been calling and all the things they have done to try to penetrate the account. That is invariably when we get the magic question, “What is your secret?”

So, what IS our secret?

The first thing we tell our clients is that we do not have a silver bullet. There is not a phrase or question that hypnotizes a prospect and guarantees a meeting. If there was, I would have written a best-selling book by now. No, the real answer is much less exciting.

The ProSales Connection secret to more sales meetings:

1. You have to make the calls.

I apologize for this one, but this factor is one of the single most important differentiators between the average sales team and our team. Most sales reps will find something… No, anything to do to avoid making a cold call. It is just human nature. In college, I would clean my apartment when I had a major paper to write or a big exam to study for. I would find something “productive” to do to avoid what I knew needed to be done. Sales people do this every single day. So, schedule time and reward yourself or your team for making the calls. They say it takes 21 days to form a new habit. Get started today!

2. Be crystal clear on your value proposition.

If your sales team cannot articulate in 20 seconds the value they bring to their clients, then don’t waste your time making cold calls. Investing a couple hours to nail down your value proposition in simple language that can be spoken over the phone is the first step in effective cold calling.

3. Have your references ready… use them early and often.

There are 2 types of references that can be used effectively on a cold call. The first is the internal reference. An internal reference is someone within the prospect’s organization that has recommended you meet with the prospect. This could be the CEO or the CEO’s Administrative Assistance. It could also be a subordinate of your target contact. Whoever it is, use their name to your advantage.

The other reference is the client reference. This is nothing more than a name drop. Work a satisfied customer that your prospect has heard of into the beginning of your call to establish credibility with the prospect. This simply tells them that you didn’t just launch your business yesterday and that real businesses with real money trust you and your company to deliver value.

4. Ask for the meeting.

Some of the best advice I got as a young person starting out in business was to ask for the job. I found that if I just asked for the position I wanted, I would either get it, or I would get real objections that I could work to overcome. The same is true with appointment setting. You will not get a meeting if you do not ask for it. Use any and all reasons you can find during the call to ask for a meeting…

  • They had an issue with your company in the past… ask for a meeting to understand what happened.
  • They are using a competitor… ask for a meeting to understand how your company can improve their offering.
  • They would like more information… ask for a meeting to present it to them or to bring an expert to discuss.
  • They are too busy… ask for a meeting to see how you can help make their job easier or to take something off their plate.

5. Stop short of selling.

This is a huge mistake that sales people make every single day. By definition, a cold call will catch a prospect doing something else that is important to them or their company. They are not prepared to discuss in detail their business challenges with you on a cold call. Acknowledge this and respect it. Your goal is to introduce your company, create interest and secure a convenient time for a meeting. Your opportunity to convert a prospect to a customer goes up considerably when you can have enough time and their full attention to effectively lead a discovery conversation. If they are engaged and excited about what you are saying, leverage this into a meeting… don’t sell on the cold call.

As we like to say here at ProSales Connection, “It’s not rocket surgery!” Leverage these simple tips to increase your sales meetings today.

If you would like more information about ProSales Connection and our B2B insides sales and appointment setting services, please contact us today. We would love to answer any questions you may have or help you determine if our services would be a good investment for your business.

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , , , , , , , ,

No Comments

3 Steps to Increase Sales without Improving Close Rate

As we work with businesses to help them sell more and grow their revenues, we often find that there is a lack of basic understanding of the principle of sales ratios.

A sales organization’s sales ratios are the ratios between the numbers in your sales funnel. These ratios are essential data needed to understand how to improve performance, measure results and can help identify where to make strategic investments.

Step 1: Understand your ratios

Every business is different and the sales stages can vary dramatically. We usually suggest starting with your target market. How many potential clients will you market to this year/quarter/month? Then determine how many of those contacts you can qualify as having a need for your product or service over a period of time. That is your first ratio. Now identify the stages each sale goes through before it is closed as a won deal. The ratios between these numbers are your sales ratios.

Step 2: Measure your ratios

For instance, let’s say you have a technology product that is sold to schools and you have identified 200 school districts that you want to sell your product to in your territory. After reviewing your historical data (or estimating) you determine that you can qualify 40 new leads out of these 200 target accounts. You have now determined the first ratio is 5:1 or 20%.

After reviewing your sales process, it is clear that your next sales stage is a face to face meeting to demonstrate your product. So your next ratio will be the percentage of the 40 qualified leads you have identified that will agree to meet with your sales rep for a presentation.

Let’s say that the ratio is again 5:1 or 20%. So that means you can plan to meet with 8 prospects out of every 40 that you qualify.

Next, you know from experience that if you meet face to face with a prospect, 38% of the time that meeting will result in a new sales opportunity being created. So, your ratio is 8:3 and you will have 3 new sales opportunities to pursue

Finally, because your sales people are so skilled at selling and your product’s competitive advantages are so clear, you typically close 33% of all qualified opportunities. Your close ratio is 3:1. Therefore, in this example, you will win one new account. That is 1 new account for every 200 target accounts identified.

200 Targets > 40 Qualified Prospect > 8 Sales meetings > 3 Opportunities >1 New Account

This list of ratios is commonly represented as a funnel because it narrows as you work through the sales process.

Step 3: Improve your ratios

Now that you have determined/estimated what your sales ratios are, you can leverage this data to help you make business decisions on hiring, training, coaching, and marketing investments to name a few. The insight these sales numbers provide will allow you to create tangible action plans to improve your sales team’s effectiveness.

I recommend as a starting point, you should identify the 2 ratios that you believe through coaching and professional development can be improved the quickest/easiest and mount an effort to create a measurable improvement in those ratios.

In the example above, by improving the ratio of targets to qualified prospects by just 10% from 20% to 30% and qualified prospects to sales meetings by another 10% from 20% to 30% you will double the number of new accounts closed without improving the close rate at all!

200 Targets >60 Qualified Prospects > 18 Sales Meetings > 7.2 Opportunities > 2.3 New Accounts.

Without a solid understanding of your sales ratios, sales managers almost always go straight to the end of the funnel for improvement. They focus a disproportionate amount of time and resources on the close rate. When in the case of my example above, a significant return was found making moderate improvements in early stage ratios.

The point is; by understanding, measuring and continually striving to improve your sales ratios you can have a huge impact on your revenue and quota performance.

TIP: Consider what other investments can be made that will have an impact on these ratios. Perhaps by investing in market research you could identify 200 target accounts that are more likely to be qualified. Or, by leveraging a professional appointment setting firm the ratio of qualified prospects to sales meetings could be increased.

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , , , , , , , , , , ,

No Comments

5 Things Sales Leaders Don’t Do – That Get Them Fired

According to a number of sources, the average tenure of a Sales Leader is about 18-19 months. That means on average it takes sales managers about 6 quarters to find a way to get fired.

That is a pretty dramatic number… far shorter than most would guess!

There are obvious things sales managers get fired for like; not making quota, inappropriate use of company resources, and poor cultural fit with the organization… just to name a few. This post will explore the things that sales managers DON’T DO that can end their tenure with their company prematurely as well.

Not inspiring – We know that the role of the sales manager is to take the company’s vision and values and make them real by giving them context. A sales manager has to find ways to inspire her sales team around these values and create a shared vision. This gives the team a foundation for how they will work together and how they will interact with their clients and prospects. Inspiration has the potential to transform an average sales organization into one that consistently over-achieves. When ignored, consistent success is hard to find.

Not getting the right people on the bus – As a sales manager, your responsibility is to build the best team possible… one that can exceed the expectations of the organization. This might mean making difficult decision to remove members from the team that are not performing or are not invested in improving themselves or their teammates. This might also mean taking the time and placing particular emphasis on attracting the very best new team members to the team. Not building a great team will almost certainly cost sales leaders their job sooner or later.

Not coaching…every day – Coaching is the most important role of the sales leader. This goes for all levels of sales leadership, not just the frontline managers. Every day there are opportunities to coach and to teach your team to improve. High performing sales professionals also need expert coaching support from their managers to stay at the top of their game as well. Here are a few best practices:

  • Sales managers should speak to their sales reps one-on-one every week.
  • Sales managers should be in the field or on the phone weekly helping the rep prepare for meetings, attending meetings and debriefing after the sales meetings.
  • Key performance indicators should be reviewed at least on a monthly basis and this data should be used to easily identify areas of concern and opportunities for improvement.

Coaching is a huge topic, so if it is not an area of strength for you today please go investigate this further. Remember, coaching is not about what needs to be done, but rather how to do it.

Not ending the elephant hunt – Sales managers (like sales reps) can get sucked into the exciting world of “elephant hunting” and more often than not they fall prey to their own short-sightedness. Don’t get me wrong, every healthy pipeline should have a few huge, quota-busting deals on it. However, if your sales pipeline is not at least 3 times your quota WITHOUT the elephants, you are playing with fire. Elephants (huge, low probability deals) have longer sales cycles than most sales people will admit and because of their poor close rates, most sales leaders factor them too heavily into the forecast. By the way, missing the forecast consistently is another great way to get an early exit from your sales leader role.

Not empowering their people – By enabling the members of your team to act and to make decisions, you create an environment of empowerment and action. This can super-charge a sales team and increase sales results dramatically. Sales managers who tightly control the flow of information to their teams and require too many sign-offs to respond to a client take the spirit out of a team and restrict performance. There is a chance that fewer mistakes will be made, but what is that worth to you?

With that being said, empowerment is only effective when there is a culture of consistent and effective coaching. Help your people understand how to make sound business decisions and then empower them to execute with authority. When mistakes are made, address them quickly with an emphasis on how to avoid the mistakes in the future.

Sales leaders are only as successful as their teams. The top-down autocratic sales manager has been replaced with a sales leader that inspires, builds great teams, coaches and empowers. To be successful in the sales leadership role you must deliver results. To deliver consistent results you have to leverage the full potential of your team.

What are some of the other mistakes sales leaders make that can get them fired?

Check out our FREE white paper, 5 Secrets of a Successful Cold Call

Request a call back from ProSales Connection to learn more about our Appointment Setting and Inside Sales Services!

Mike Faherty

Mike Faherty

Mike Faherty is President of ProSales Connection, LLC a Sales and Marketing firm based in Houston, Texas. Mike Faherty is a noted leader in the technology industry and in 2008 founded ProSales Connection to use his experience to build and lead inside sales teams for B2B clients in the US and around the World. Please connect with me at the links below or give me a call at 832-365-0730 for more information about ProSales Connection.

Website - Twitter - Facebook - More Posts

, , ,

2 Comments