2-14-2014
A leading, but underutilized indicator of sales performance is what I call ?engagement metrics. I define ?engagement metrics? as the number of prospects who have one of your salespeople on their calendars for a next step.
Most salespeople want to please you and do what you want them to do. Just make sure you know that what you want them to do will also let them win.
To get a sense of why these ?missing metrics? are so important to me, let me describe . . .
The Epidemic
Dead and dying deals are currently clogging your salespeople?s pipelines. Sales that drag on too long drag down salespeople?s efficiency?as does spending time, energy, and resources on deals that are already dead.
In medicine, an angioplasty is a procedure that opens coronary arteries that have been clogged by the fatty plaque buildup associated with coronary artery disease. Despite the fact that heart disease is thankfully starting to decline in the United States, the incidence of clogged sales pipelines is increasing at alarming rates. Chief Sales Officer Insights conducted a major survey of 1,337 chief sales officers that reveals that 54 percent of forecasted deals don?t close (30 percent go to a competitor; 24 percent go to no decision). The same survey found that 90 percent of the deals don?t close when forecasted. It would appear that ?Dismal pipeline analysis is the rule.?)
"Sales pipeline angioplasty" is the ongoing process of methodically eliminating dead deals and reengaging with real prospects who have quit returning your salespeople?s phone calls. One immediate outcome of this process is new movement of real opportunities through healthier sales pipelines. Other indications of a successful procedure are shorter sales cycles and more accurate projections.
Warning Signs of Clogged Pipelines
The first warning sign is that you?re reading this, and are biting your nails wondering if the following list will apply to you and your company. Here are seven more warning signs that your company is a candidate for sales pipeline angioplasty:
1. You find it hard to make accurate forecasts based on the information you get from your salespeople.
2. Too much of your forecast is based on subjective information.
3. When you finally learn about lost opportunities, it?s too late for management to intervene and save the sale.
4. You find yourself putting out fires instead of proactively developing your salespeople.
5. Your salespeople are ?too busy? reacting to current customers to make efforts toward prospecting and new business acquisitions.
6. You find it difficult to assess the kind of effort of your salespeople are making.
7. You don?t have a distant early warning system to alert you that a salesperson needs help before he or she actually asks for it.
Your salespeople are busy. But this busyness no longer equates to actually achieving business gains. You may have already noticed that your salespeople seem to be working harder than ever with less to show for it. They face long, drawn-out sales cycles and the need to please multiple decision-makers. At the same time, they waste countless hours pursuing information seekers instead of real prospects. They may even tell you that sales are imminent, despite the fact that prospects have quit returning their calls. Amazingly, they remain optimistic when pessimism and facing the brutal truth are what?s called for.
The number of scheduled meetings with high-value prospects is the leading indicator of the health of your company?s sales pipelines. The number of prospects who have your salespeople on their calendars is the third missing metric. Engaged customers do things for you within their own companies to move the buying process forward.
Engagement metrics are mission critical today because?as opposed to the dreaded information seekers?real prospects put your salespeople on their calendars. Information seekers look just like prospects at first glance. Information seekers say, ?Call me anytime on Thursday.? Salespeople who are new, naive, nonassertive, or poorly prepared hear that and leave the meeting. On Thursday, they dutifully dial the phone expecting to catch an interested prospect. But the prospect is on another line, out to lunch, or in meetings the whole day.
And this same process starts all over again on Friday. Measuring the number of scheduled meetings on your salespeople?s calendar is the missing metric that most managers need to get a handle on and manage??because increasing the number of scheduled meetings is the surest way to increase sales. It?s a more powerful and accurate metric than the old standby??the number of sales calls.
Here?s why. One day, I was going over the call reports of a client company, one of which had the following three-sentence notation:
?Went to see Ed at _XYZ_ Company. He was having lunch with another vendor at Happy Joe?s Pizza. Will call again next Tuesday afternoon.?
That salesperson had dutifully detailed a meeting that never occurred??and took three sentences to do it. This so-called sales call involved driving 30 miles to see a person who wasn?t available. When I asked the sales rep who submitted the call report why she had gone to the trouble to document it, she informed me that her boss required her to make 10 calls a day?and that was one of them.
Your company may have already invested heavily in a CRM or Sales Force Automation program to gather critical sales data. However, these frequently become repositories for marginally useful and cover-my-butt notes. Sales executives and field sales managers spend far too many evening hours and weekends wading through this kind of detail:
? ?Left voice mail?
? ?Left second voice mail?
? ?Sent rates and packages?
? ?E-mailed prospect about our new pricing?
? ?Reached assistant. Prospect is traveling on business. Call in a week.?
? ?Called Pat, but he was on his way upstairs and couldn?t come to the phone.?
Real sales come from real meetings?whether in person, online, or on the phone. There is no need to write a sentence about dialing the phone and not reaching the intended party. This time would be better spent dialing another prospect and setting up an actual meeting. Salespeople who put opportunities into their projections at 50, 75, or 90 percent without having a next meeting are fooling themselves and attempting to fool their bosses. A good meeting is one that ends with a next step on the potential customer?s calendar. Salespeople need to ask for specific commitments from potential customers. However, they?re afraid to seem pushy, and often mistake friendliness and expressed interest for buying signals.
So? what deep dark secrets are lurking in your sales pipeline?
There?s an even better question: Why should there be any secrets lurking in any salesperson?s pipeline? And why should you have to spend evenings and weekends trying to decode call reports to figure out what?s really happening? After all, next quarter?s sales results are already predetermined by this quarter?s pipeline health. Can you tell how these are shaping up now? How about the quarter after that?
Jack Nicholson?s classic line from A Few Good Men explains exactly why these projections are so whacky: You can?t handle the truth.
I?m talking to you, too. Your salespeople can?t handle it when they bring you bad news and you roll your eyes and let out the heavy sighs.
So they tell you lies. They tell you everything is fine just to shut you up.
And it works.
But you can?t let it work anymore. You?ve got to be relentless at getting at the real truth without judging the person.
There are various reasons why sales pipelines are clogged. Fortunately, there are also many ways to start performing sales pipeline angioplasty on each one of them.
Before you include an item into the projections that you send to your CFO, make sure you?ve planned a next step. Has the salesperson asked the critical question, ?When are you planning to make a decision?? Or, ?How soon do you want to address this problem?? Just because there is a proposal and pricing on the table doesn?t make this a sure thing. As Chief Sales Officer Insights principle Jim Dickey says, ?No customer ever buys 75 percent of a deal. It?s usually all or nothing.?
Again, engagement metrics refer to the number of prospects and customers who have your salespeople on their calendars for a scheduled next-action step. This is a leading indicator of the likelihood that they will buy. Most decisions to purchase do not occur when your salespeople are in front of the customer. Instead, prospects hold another one of the famed "meetings after the meeting" with the buying team, and have a discussion about implementing your plan. This happened to you when you were in sales and it happens to your salespeople on a daily basis.
Your salesperson is in front of a prospect or several prospects from the buying team. There is lots of leaning forward, nodding, and eye contact. The buying team members ask pointed questions. The salesperson answers them flawlessly.
And then it happens.
The point person looks at his watch and says, ?I?ve got to jump on a conference call. This has been great. Let?s continue this conversation after the long holiday weekend. Can you call me next Tuesday to set that up??
And, of course, because he wants to be polite and doesn?t want to ruin the moment, the salesperson agrees.
On the following Tuesday, the calling process begins. And for some impossible-to-fathom reason, the formerly excited prospect neither takes nor returns the call.
This can go on for days, and even weeks. And it will?unless you teach every single one of your salespeople to use the following response and the magic question: ?I would be happy to call you next Tuesday. Are you willing to work with me on a calendar basis??
There are only two answers:
1. Yes, absolutely, let?s get this on the calendar. Does 9:15 A.M. work for you?
2. No, I?ve got to go. Just call me.
And variations of the same.
Here are two foolproof definitions that will make your projections a source of pride instead of frustration:
? A prospect is someone who is willing to engage with you on a calendar basis. Engaged prospects and customers do things for you within their own companies to move the buying process forward.
? An information seeker is a person who lets you chase him and possibly pin him down later for a next step.
Never put an information seeker into your projections. Your salespeople will use words like "slam dunk," "hot prospect," and "no brainer." You do not acknowledge or allow these words. In fact, they should make you suspicious when used.
?What is the next step?? you ask. ?Is that step on their calendar now or not?? There are prospects and information seekers?end of story. End of ridiculous and fruitless projections.
Regardless of the length of your sales cycle?and I?m betting it?s both longer than you?d like it to be and longer than it was last year?you need to be aware of who has your salespeople on their calendars for a next step.
So, start inspecting their calendars instead of just reading their call reports. Count the number of meetings they have scheduled over the next two weeks; increasing these is the fastest way to increase sales. It is a more powerful and accurate metric than the number of sales calls someone intends or pretends to have made.
Jeff Schmidt and I have partnered with Radio Ink for the Radio Sales Success Expander webinar series. Click here to find out more and sign up to participate live or on demand.
Chris Lytle is the founder of Sparque, Inc. This well-traveled speaker has conducted more than 2200 seminars on three continents. He?s the best-selling author of The Accidental Salesperson and The Accidental Sales Manager.
Reach Chris by e-mail chris.lytle@sparque.biz
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