There is a school of thought in business-to-business (B2B) selling that a sales organization, and its individual reps, should know by the end of the first quarter whether they'll make their quota by year end. For the most part, this is a good line of thought to subscribe to.
As we approach the end of this year's first quarter, it's a good time to step back and review your progress, the state of your current sales, and your pipeline.
This is the time to make adjustments to your sales strategy and execution. If you're on track or ahead, you can explore how to accelerate your success, how to leverage the things that are going well, and how to benefit from the momentum you created in the first quarter. On the other hand, if you are behind in your goal, it's still early enough to make adjustments, to get back on track and to deliver the kind of year you want. Based on the nature of your business and its revenue patterns, you will require different types of corrections.
Avoid wholesale knee-jerk or reactionary changes, not because drastic is bad but because it consumes key resources – not the least of which is time, your only non-renewable resource. Big projects have little chance of showing returns before year end, which defeats the exercise. Not to sound conservative, but it's more practical to think about executing specific incremental and tactical things that can have immediate impact.
One reality of wholesale change is that it often replaces what exists rather than building on what is working and then adjusting for other elements. Unless you have drastically missed your sales targets for years, you probably have a good starting plan that would benefit from fine tuning or reinforcement, rather than a complete discard.
One of the most effective things you can do is step back and take a dispassionate look at your sales pipeline and its components. People are very subjective about their pipeline, and the emotional attachment clouds their judgment, and it limits their activities at critical stages of the sales cycle. There are a number of basic pipeline metrics you should be tracking and analyzing, regardless of whether you are at your goal, above it or below. These include conversion rates and coverage levels.
While this is in no way exhaustive, here are a few to consider:
- Lead to engagement
- Engagement to proposal
- Proposal to close
A small and very achievable uptick in any or all of these conversion rates can have a dramatic multiplier effect on the results. If you improved just two of these activities by only 10 per cent each, the overall impact on revenues is some 17 per cent, as the chart shows.
(Engage to proposal)
(Proposals to close)
Average deal in $$
Total monthly revenues
If you were to improve all three by the same 10 per cent, you would see a 25 per cent improvement in revenues. To stretch a bit further, if you held your price and increased your price by 5%, the overall gain would be 32%, but let's not push it.
The beauty of this is that you can pick two of these areas to be more effective in – and remember, you or your team are already doing them, so it's an adjustment not an overhaul. If, on the other hand, you don't know these simple metrics, the first thing you might need to do is start tracking them. You don't need a big customer relationship management (CRM) app, you can use tools you already have, such as a pen and paper. It is the tracking and doing that are important.
Pipeline coverage is another lever available for incremental improvement. I'm not talking about piling on prospects, but having the right level. Too few real prospects forces you to spend too much time and energy trying to convert everything, worthwhile or not, because it is the only thing you have.
You cut corners, or discount, because if you don't you'll miss out. Too many prospects crowd out the best opportunities, again requiring extra effort and time just to sort through. Knowing the above conversion rates allows you to know what the optimal coverage level should be, and gives you time to target more of the right prospects. The level is specific to each rep or organization, allowing them to make the right adjustments for the right multiplier effect.
So before spending time, money and resources, and stressing out about the changes needed to get back on track to achieve your goals by year end, pick one or two doable things, make the adjustment, and move forward.