Factors affecting close rates and profitability
We often think about marketing/sales as a straightforward process: get the word out and overcome objections, then purchases are made. That’s not entirely wrong, but many other factors play a role. Investing time in understanding them can save you a lot of time (and investment) when it comes to your sales activities.
Let’s start by looking at the two factors within your control that directly impact close rates and profitability: your sales team (and their compensation) and your pricing. Top performing sales leaders benefit from compensation plans that align to your sales strategy and how your customers buy. Profitable pricing strategies look beyond market rates to consider value, service levels and what upsell/promotional opportunities exist. Aligning the numbers to your sales strategy not only improves your chance of success improves your odds at going beyond revenue-generating sales to sales that provide profitability.
What are your customers thinking?
You’ve looked at things from your perspective – now let’s walk through what customers might be thinking.
The more people you add to a purchase decision, the longer it takes. Your sales team needs to know who has a voice in the decision and create relationships with them.
If your offering is easy to understand your team can focus on details, but when it’s something new or complex, education becomes a big part of your sales messaging.
Customers often need more time to evaluate high-cost purchases, so your team needs to be able to easily articulate the value your offering provides.
As purchase prices increase, so do post-sale service and support expectations. Be sure you’re ready to talk about those resources, how they’re accessed and how they add value to the purchase price.
This is especially important if replacing a current solution. Take time to understand how your offering fits with existing processes, tools and/or equipment to avoid those obstacles.
Many consumer products are quick decisions, but if the sales cycle is longer, you’ll need to be sure you are staying connected to prospective customers with relevant information and insights over the long haul.
How you approach sales plays an important role in your success. That’s why clients come to PhoneBox for help navigating this challenge.