I’ve been getting up to date on the latest research and information on sales effectiveness in organisations and the stats are remarkable. A recent study by Ernst & Young of medium size businesses ($25m-$1b) in the U.S. and Australia indicated that 72% said their 6 month revenue forecast was out by more than 30%, and that another 14% didn’t even know how reliable their forecast was. 78% said they had no or only rudimentary sales processes, and in many cases those processes are developed in isolation from understanding the typical buyer’s .
I’m a strong believer in CRM applications and their ability to help manage leads and opportunity pipelines (as well as the whole customer lifecycle), but the reality is that a whole lot of organisations could benefit from some basic work around optimising revenue generation and developing their sales process before trying to whack in a CRM system. Simple questions like:
- What problems does your product or service solve for a potential customer?
- What is the profile of those types of customers?
- What are your conversion rates at each stage in the sales cycle?
- Based on conversion rates, how many leads need to enter the top of your sales funnel to hit your revenue targets?
- How are leads nutured so that when a sales rep calls on them, the prospect is receptive? (Or, how do you help them become aware that they have a problem that you can solve?)
are only the tip of the iceberg in improving your organisation’s sales effectiveness. The stats also show that organisations that have done the work, with mature sales processes average more than 4x better conversion ratios than those that haven’t. At any gross margin, there is huge potential for massive profit improvement, even in ‘hard times.’