The Front End to a Viable Sales Funnel

planning

The key to a healthy, viable sales funnel begins at Teleprospecting. Determine the number of Marketing Qualified Leads for each Teleprospecting team (I recommend at least 150 leads per person). Then, verify their access to these leads.  Lastly, apply the Teleprospecting Best Practices recommend in my blogs.

Be sure to keep these 6 points in mind, as you establish and expand your teleprospecting team.

  1. The Sales Funnel is King! Instill collaboration between Sales & Marketing to ensure a quality sales funnel. These departments must develop and agree on qualification criteria and other key metrics, to ensure consistent sales funnel growth. Revenue growth will cease without quality Sales Qualified Leads (SQL) and a healthy Sales Funnel.
  1. Hire experienced staff. The Teleprospecting team is most often the first contact a prospect will contact, within a company. Therefore, it is counter-productive to assign entry-level employees to these positions. They lack experience in selling complex solutions and communicating with senior-level executives. With a history of nearly 30 years, experienced professionals are readily available to hire. This is one decision your company will not regret.
  1. Focus Teleprospectors on one Solution. Efficiency begins to decrease as telemarketing teams become responsible to sell & learn multiple products or solutions, especially if they are complex. Focus delivers a quality sales funnel.
  1. Develop and implement Kay Performance Indicators (KPIs), or metrics, to manage a team. Once the KPIs have been established, assign each team to create a plan that outlines a process to reach their goals. This empowers team members to carry out each task and take responsibility to meet their objectives. Managers may work alongside the Teleprospecting teams to ensure the practicality of these plans. These plans also provide a blueprint to manage activities and measure results, for the Manager, as well as the Teleprospector. (See my blog for details here).
  1. Develop a Teleprospecting Playbook. A Teleprospecting Playbook is a set of tools that guide Teleprospectors through the qualification process for Complex Solutions. This playbook must be written and assembled by individuals with sufficient knowledge, such as expert from Product Marketing or Sales.
  1. Build compensation plans that drive desired behavior. A satisfying compensation plan motivates Teleprospectors to excel at their duties. Create compensation plans that focus on the Sales Funnel and generate revenue growth.

These 6 points will allow you to create a strong front-end for your sales funnel. By applying these best practices, your team will produce a healthy, robust sales funnel, providing for an increase in revenue growth.

 

Alicia Assefa has been managing Teleprospecting and Inside Sales teams for the past 15 years. She is the author of the bestselling eBook “Teleprospecting for Executives Who Sell Complex Solutions”, which is available on Amazon here.

The Perfect Compensation Plan

predictable revenue growth

Driving Sales Funnel growth, meeting revenue objectives, and getting sales teams to meet or exceed sales metrics are among the many challenges faced by our clients. Quite often, these problems are self-inflicted. Large salaries and commissions provide little incentive for sales teams to achieve the metrics that drive Sales Funnel and revenue growth.

In order to meet your targets, you need to introduce a compensation plan that encourages the appropriate behavior and provides the right incentives for your team to work towards their goal. Key Performance Indicators (KPIs) are the activities that drive Sales Funnel and revenue growth.  KPIs that fail to be established or met, will result in a loss for your target revenue. Example KPIs for Inside Sales might include:

  • Key conversations with prospects that establish pain & fit. Without frequent conversations with prospects, there will not be enough activity to grow the sales funnel.
  • A Sales funnel that is in excess of 3X the revenue objective.  We suggest that clients analyze the sales funnel activity from the past 3-6 months to determine their closing ratios.  Some of our clients have only required a sales funnel of 1.5X their revenue objective, while others have needed a funnel of 5X, to ensure that their targets were met.
  • A pre-established number of demos.  We suggest that our clients determine the ratio of demo presentations to closed deals, to establish this metric.  One of our clients found that 75% of demo presentations generated closed deals.  For this specific client, demos were very important and became a top metric for their Inside Sales team.

What is the best way to ensure that team members meet or exceed their KPIs? Fifteen years of experience and association with over 100 companies, has led us to this answer. The answer: Build a compensation plan with three distinct components: Base Pay, Performance Bonus, and Commission.

Three Components of a Perfect Compensation Plan

  1. Base Pay: Companies with a high base salary often have poor performance within their sales teams. Base salary should accommodate a decent quality of life within said region. Base Salary should not be able to provide “luxury” items, keeping incentive for the team to meet their established KPIs.
  1. Performance Bonus: Compensation plans must provide a pay-for-performance component to encourage appropriate team behavior.

For example: if the monthly KPIs include a specific number of Key Conversations, Sales Funnel growth, and Demos, the representatives should receive a monthly performance bonus for meeting or exceeding these established KPIs. Performance bonuses work very well to ensure that KPIs are met.

  1. Commission: Commission should reflect the achievement of KPIs.

For example: suppose that 5% is the highest commission rate given at 100% of quota.  If a team member has met 100% of quota and 100% of their KPIs, they should receive the highest commission rate.  If not, the commission rate should reflect their achievement of quota and established KPIs.

Appropriate “Selling” behaviors develop when compensation plans are structured around KPIs and Sales Funnel growth.

Why your SQL’s Get Ignored at the End Every Quarter

During my career and at most of the companies that I have supported, I noticed a strange cycle that occurred at the end of every month and especially at the end of every quarter.  At these times, Sales completely ignored the Teleprospectors’ SQLs (Sales Qualified Leads).  The worst time was at the end of every quarter when SQLs would not be called until 15 days or longer after they were passed to Sales. My managers and I started to track this cycle which we called the “Care Factor.”

We dubbed it so, because field reps were very interested in (cared about) SQLs during the first weeks of every month and the first month of every quarter. In contrast, they ignored SQLs during the last week of every month and the last month of every quarter. During the last month of the quarter, after the 15th day, the field wouldn’t touch any new SQL until at least for a few days after the quarter ended.  This was often as long as two full weeks after the SQL was passed.  By then, the SQLs were stale.  Stale SQLs require requalification.

We had a SQL follow-up rule in place for the field.  SQLs needed to be contacted within 48 hours; however, there wasn’t one Regional VP of Sales who cared about this rule at the end of the quarter. Our company, like most, suffered from the ”hockey stick” factor; a few deals close at the beginning of a quarter while most deals are closed at quarters end (spiking up, like a hockey stick).  The “hockey stick” factor caused the field to be super busy with trying to pull in revenue.  They had no time to review potential opportunities (SQLs).  The combination of these two factors, “hockey stick” and “Care Factor,” created a vicious cycle that impacted pipeline and revenue growth.

I developed a solution to the “Care Factor” problem.  Each regional sales office should assign one person to review SQLs as they come in.  SQLs should go to the sales rep that has the bandwidth to work the deal at the time the lead is passed over.  It is far better for your company to be responsive to the needs of your prospects than to let quality SQLs slip away or to stall due to lack of timely follow-up.  If you must, create a commission sharing model to keep the peace among your field reps.

In the end, your company will build quality sales pipeline a lot faster. The Teleprospecting resource will be used efficiently, as time will be spent garnering new SQLs vs. re-qualifying old SQLs.  The benefit to your company will be a consistent flow of opportunities to your sales pipeline which will mean more revenue each and every quarter.

How Does the Care Factor Impact Revenue?

  • Constant requalification of leads is a waste of limited resources.  Most companies don’t have enough Teleprospecting horse-power to support their sales organization.  Rather than going after new prospects, Teleprospectors are then required to regularly re-qualify solid SQLs that have already been contacted and previously qualified.  This requalification prevents a steady stream of new SQLs to Sales.
  • The SQL-to-Sales Funnel quota will be impacted.
  • The Field teams’ delay in follow-up gives prospects the impression that your company is not responsive. C-level executives take time to answer the Teleprospectors questions and/or give them the right person to contact.  The delayed response makes your company look bad due to the slow follow-up by Sales. I have heard from clients that many of their deals were lost due to lack of Sales responsiveness.
  • Growth of the sales funnel is hampered as quality SQLs are delayed.  In some cases, SQLs won’t make the funnel because of the delay in follow-up.  The delayed funnel growth has a direct impact on when deals will close.

Manage all SQLs well, no matter when they come into your sales funnel.  In doing so, your prospects will feel that your team is responsive and effective.  Your Teleprospecting resources will be used effectively and won’t have to re-qualify stale leads.  In the end your company will have consistent sales funnel growth.