QUALITY NOT QUANTITY
Answer these four questions honestly.
a) How many potential sales do your people have in their prospect lists?
b) How many of them are real, that is they will end up in profitable business for your company?
d) Do your sales people know the answer to the last question?
e) Are their answers based upon gut feel or on thoroughly understood facts?
The most common honest answers to the questions are:
a) Not enough of the right ones
b) I don’t know
c) I don’t think so, and
d) A mixture I suspect.
In this month’s SalesPulse we examine the biggest of the self inflicted wastes of sales time and that is qualification. Or rather, it is the lack of disciplined application of the qualification process. Sales time is at a premium, it is a very valuable commodity. It is imperative therefore that it should not be wasted but every time a deal is “lost” because the customer does not make a decision, or is really lost to a competitor, it is likely to be a failure in the qualification process.
Let’s start with a definition of qualification. Qualification is an investment decision, and like any investment decision there should be a return. “Should I invest my company’s time, including my own, and resources in trying to win this piece of business”? Other business investments require rigorous return on investment statements, due diligence and risk management strategies to ensure that the investment pays back. However, sales people can and are even empowered to make their own investment decisions, and as a sales manager I would endorse that but with a caveat. That is that the qualification process should be competently used at all stages of the sales process, because that will ensure that the sales people work on deals that they can win.
According to CSO Insights just over 50% of forecasted orders are lost to competitors or to the no decision syndrome. This accounts for a half a sales person’s time. There are two fundamental reasons for this. The first is human nature; if people don’t appear to be busy they feel worried and as a result keep unwinnable prospects on their to do list until they come to a predictable end. These people will, and sometimes with management support respond to unsolicited open tenders or request for proposals without any prequalification. The most useful place for such unsolicited documents is the bin. Secondly they don’t know, understand, have forgotten or fail to apply a qualification methodology that reduces the likelihood of failure. Best practice shows that great sales people win 90% of the deals they bid for; even the best are not perfect.
The key message here is to ask yourself the four questions I started with; then go and talk with your sales people and understand why they are working on the prospects they have. Then start the process of weeding out the chaff, focusing on the ones that can be won and use the subsequent spare sales time to develop new prospects or to nurture ones that will buy, but are not ready to purchase yet. You will then have a quality prospect list and have positive answers to the questions. Sorry, the answer to the first question rarely changes.
In this newsletter we have mentioned two types of qualification, but there is a third and that is how to select and develope your next strategic accounts. This will be the subject of our next webinar details of which can be found here