How to Improve Sales Efficiency
How to Improve Sales Efficiency
Are your sales teams running at full efficiency? Most businesses don’t know.
The truth is that most sales teams are only measured by the revenue they produce or the number of units they sell, and not on the actual effectiveness of their process in getting those deals.
In 2020, it’s easily possible to measure too many things. Data can now be found everywhere from CRMs to Inboxes to recorded sales calls, to the number of attempts it takes to start a conversation, to the number of times proposals are opened and forwarded, to a myriad of conversion and attribution data trying to see “what’s working”. It can be very overwhelming.
We believe that reporting on everything is worse than reporting on nothing.
I’ve sat through countless meetings where people roll off meaningless weekly data without any context, just stating increasing or decreasing numbers and expecting others to understand.
Let’s keep it simple so we can make progress. Sound good? OK, then read on.
You know already that growth means generating a healthy pipeline of leads, converting as many of those as possible, and increasing customer lifetime value from account management.
But how can you actually improve sales efficiency?
Keep it really simple to start with:
Measure:
$ new pipeline.
$ closed won.
average days between opening an opportunity and closing a deal.
average order value.
close rate % from opened opportunity to closed won.
loss reasons for deals that do not progress.
Check to see if your team is regularly using the CRM system.
If needed, review the sales process and ensure it makes sense for the way your team sells - this drives adoption as it becomes more useful to the team.
Talk about deals with each salesperson 1:1 weekly - clarify that the next step in the sales process is known, and the salesperson is clear on how to get that done. The key is to get deals “unstuck.”
NOTE this is very different than the “what are you closing this week” discussion you may have in a team sales meeting - it’s a 1:1 exercise designed to identify deals that would otherwise stay stuck in the current stage and ultimately fail - these mostly get missed by teams that just call out what they are closing.
Identify common sticking points and build a list of solutions. Run a training session to work through them with your team.
Rinse and repeat.
The above process will show results quickly - the simple act of talking about deals and clarifying the next step alone unsticks deals and drives accountability for sales to have a solution in mind vs. “waiting for the prospect to get back to us”.
So what does sales efficiency look like?
By supporting your team in the way I’ve described above, you will quickly see that deals move along your pipeline more efficiently, and those that are not moving should be moved to “closed lost” faster, too. More focus = better results, as well as cleaner data.
When you have run this process for at least 3 months, you will be able to take the next step of efficiency analysis, which is to benchmark what an ideal timeline looks like for closing deals when following your complete process.
The two most important measures are: average order value (AOV), and the timeline for a typical deal, which results in a consistent sales cycle. If you are able to increase or maintain AOV, and reduce sales cycle - your team will be running much more efficiently.*
Tactics you can use to drive these metrics:
Focus all marketing and outreach efforts onto your ideal customer profile (ICP) - no compromises.
Invest in teaching your team how to research and prepare for meetings and show up with the most relevant and high impact stories possible for your target customer.
Keep the sales team confidence high by sharing recent success stories from customers in weekly meetings.
Work out a specific simple rate card for typical deals you put together for this ICP - such as pre-authorized additional value items relevant for the ICP that the sales team can throw in to sweeten a deal while keeping AOV high.
Refocus your compensation plan on the specific behavior you want to drive, such as maintaining AOV or higher, and x deals per commissioned period.
a. TIP - Never cap a salesperson’s commission. The ability to earn extra when they exceed their plan is aligned to the motivation to succeed, and must be well rewarded.
I hope you enjoyed this quick tactical guide to improving sales efficiency - this has been proven in SaaS and services companies and has delivered results such as #61 on the INC500, and 225% increase in conversion rate from meeting to deal, so far.
If the above sounds like a project you need to do and you want some help, you should know we help B2B companies through this all the time. If you have at least $500k in revenue and are committing to growing, we may be able to help you, too. If this sounds like you, you can apply for a free consultation at this link
Want to know what we can do? Here are a few testimonials from happy clients.
In our clients words:
“Our sales are exploding” SaaS CFO.
“Brought rigor to what was a haphazard sales process” SaaS CEO
“Transformative and palpable increase in velocity and process” SaaS CEO
Typically our clients are business leaders in B2B businesses doing between $500k and $20-30mm in annual sales, they are most often founder leaders looking for help growing their sales and helping their team succeed, yet it may be too soon for them to hire a full time sales leader, or they have tried and failed to do so successfully. We help them dissolve stress and focus on solving growth challenges by keeping guidance actionable, bite sized, and with a clear definition of “done” so that progress can happen quickly.
If this sounds like you, and you would like to walk through an initial video consultation - you can apply below.
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