Your sales team is by far your most expensive resource, compared to Marketing and Prospecting. While your marketing must be targeted, the same marketing assets and messaging will go out to large numbers of prospects. And while your prospecting activity is one-to-one, each engagement happens for a very brief time. A good BDR can work a list of 200 or so prospects in any given month.
Sales, however, is absolutely a one-to-one process and not very scalable. Your sales people will likely find it hard to work with more than 20 or so prospects at any given time.
Every member of your sales team must hit at least 80% of his/her quarterly sales targets on a consistent basis.
Sales Qualify→ Prove→ Propose→ Negotiate→Close
All B2B sales will likely require at a minimum of the following stages. While there may be more stages, these are the “gateway” stages that determine if a deal will close or not.
- Sales Qualify—the most critical stage. During the first call, reps must determine: whether the prospect wants to address this issue now rather than later; whether she is part of the decision making process; whether or not pricing is going to be an issue; and whether there are other alternatives that are far more likely to be selected than your product. This last one is the main reason why so many companies miss their revenue targets—they waste too many resources chasing deals that will never close.
- Prove—Sales reps have to prove that their solution can solve the prospect’s problem and deliver reasonable ROI, so that the prospect will not experience any personal embarrassment from spending resources on an ineffective solution. The question is what kind of proof does the prospect want—a demo, customer references to speak with, ROI calculation, all of the above, or other?
- Propose— No proposal should be submitted until the first two steps are completed and it is still a go with the prospect. The purpose of the proposal should only be to present the prospecting in writing— what the rep and the prospect have already agreed upon. The rep should NOT give out a proposal unless he or she thinks that the ONLY thing left to do is to negotiate pricing and Terms & Conditions. In other words, a proposal should be made when pricing is the only factor keeping the prospect from choosing your firm, and aside from that, the prospect wants to give you her business.
- Negotiate—expect some negotiation and be prepared to counter by offering more value rather than price discounts.
If the above stages are done properly, good sales reps can expect to close at least 33% of their Sales Qualified Leads. Otherwise, the ratio is likely under 20%.
Average deal size; average sales cycle; average closing ratio. If you watch these metrics closely and enforce discipline, your worst performing sales rep should not bring in less than 25% of what your best performing sales rep brings.
Read about the first and second operations in B2B Sales.