Leveraging the Sales Process for Success
Your sales process refers to the way in which you put your sales strategy into action. A sales process map will plot a prospect’s journey from when they first hear about your solution to when they sign on as customers. The process presents a set of clearly defined, replicable and scalable steps to move sales leads from introduction to close. The term sales process is often used interchangeably with the terms sales pipeline and sales funnel. Whether you refer to it as a sales process, pipeline or funnel the goal is the same: to provide sales management with a reasonably accurate sales forecast of the revenues that they can expect each quarter and to show where deals are being blocked.
Your company’s sales process will differ considerably different depending on what kind of business you’re in. An art gallery obviously doesn’t sell in the same way as a fast food franchise. For the sake of simplicity, we’ll be focusing on the B2B sales process – where you sell your product to other businesses (rather than directly to consumers).
Understanding Sales Process Steps
Sales process steps are relatively uniform across B2B sales organizations. Everything starts with your marketing team working to generate leads, whether that’s through advertising, public relations, gated content on your website, or something else entirely. After a lead’s information has been captured, they need to qualified. Qualification typically involves a more junior sales representative reaching out to the lead in order to understand whether they have a relevant use case for your solution, the budget to pay for it and the authority to make a purchasing decision.
Once a lead has been qualified they’re generally referred to as a “prospect” and a more experienced account will take over the relationship and work to set up a meeting or demonstration. This will give the salesperson an opportunity to showcase the product and find out more about the prospect’s specific pain points. It may take several meetings or an extended trial to fully convince a prospect of a solution’s value.
If the meeting step has gone well the salesperson will attempt to close the prospect by negotiating pricing details and sending over the final paperwork. Be aware that the work isn’t done once the prospect has become a customer, particularly if you’re selling on a license model. You’ll need to continue to deliver value to the customer over time and look for opportunities to cross-sell and upsell to drive further sales revenue.
Sales Process Metrics
Of course, the fact that selling process steps are fairly uniform doesn’t mean you can’t improve. You’ll want to keep an eye on four sales metrics in particular to gauge the health of your selling process: leads, average deal size, close ratio and average deal lifetime. A percentage of your leads will become customers, so (generally speaking) more leads means more customers and more revenue. As such, you’re going to need to ensure that your marketing efforts generate an increasing number of quality leads over time.
Your close ratio refers to the percent of leads that you can expect to become customers at each step of your selling process. While you can only improve your close ratio so much, you want to make sure that the ratio gets better, or at least remains stable, as your company grows.
Your average deal size indicates approximately how much revenue each won deal will generate. Average deal size might not change unless your company modifies its solution offerings, but it’s an important metric to keep an eye on regardless. Finally, your average deal lifetime will be an important metric in your sales forecasts as it indicates when each deal can be expected to close.