Sales funnels are funny things. Sales leads flow through from the top and either convert to sales or fall out, as part of the sales process. Most sales professionals seem to accept the process and are resigned to the fact that only a given proportion of leads convert to sales. That means the marketing activities need to be expanded to increase sales.
A Research Based Approach
Recent research by Paramarq has shown the throughput of the sales funnels can be improved using customer research techniques. Substantial improvements (often 40% or more) are possible by undertaking an analysis of sales objections and then improving the sales and marketing process. Often at minimal cost.
Their research is based on the use of in-depth, impartial and independent interviews of sales prospects that have failed to convert to sales at each stage of the sales processes. Care needs to be taken to ensure surveys of sales prospects are undertaken independently so the individuals being surveyed do not feel: embarrassed, pressured or guilty. If this impartiality can be maintained prospects are normally prepared to be frank, honest and explain the issues that affected the sales process. The independence reduces the political dimension to them and also aids their acceptance by the sales force.
Consider an electronics company that was staffed mainly by management with PhDs who were urbane and sophisticated. The company were selling advanced produced to the middle management of large companies. Paramarq’s research discovered that staff were thought of as aloof and arrogant. The company’s management were advised to change their communication style, be less reliant on email, spend more time with customers and communicate using paper based mediums. The result was a reduction in customer frustration leading to improved relationships, delivering measurably improved results
Understanding Objections
Surprisingly it is often scores of minor issues that make important differences to conversion ratios. Amongst issues raised are of course that old favourite – cost – but again and again research shows that cost in itself is less of an issue than commonly supposed. Crucially it is how cost is seen that is key – and subtle changes in marketing can radically affect cost perceptions.
Having undertaken research at an advanced engineering company, Paramarq’s research showed that although their prices were five times their competitors the real sales resistance came through the way pricing was viewed as a risk by customers. Once pricing methods had been reviewed customer objections reduced substantially, even though overall prices remained the same.
The surveys also highlight large numbers of seemingly minor improvements in products, processes, systems and staff. The improvements are always company- specific. A large number of these can easily addressed by management – once they are made aware of them.
Take a highly successful and fast growing company providing B2B services. Paramarq’s research of their sales cycle quantified the extent to which sales were being damaged by inappropriate marketing materials. Research also identified the extent to which sales were being impeded by inappropriate sales targeting and poor sales skills. The company’s management shocked to learn of these issues but once clearly identified took rapid steps to address them, and increase sales. Perhaps their ability to take on difficult data, at odds with their accepted current management is a core reason for their success in a highly competitive market.
Internal Resistance
Sales staff are frequently surprised by the data produced, and recommendations made, as they can challenge long held preconceptions. The key to the acceptance of changes is that all can see the surveys are in themselves unbiased and the data produced is not part of some Orwellian scheme to reduce their bonuses or manage their KPIs upwards.
The use of independent and impartial interviewers is critical to reduce internal friction. But it is equally as important that they are the right interviewers. Care needs to be taken that they are professional in their approach, and are trained to gain maximum insight from interviews. They need to have integrity and credibility with the customers. In order to gain this, they should be extensively briefed on your Company and the issues which it faces. The interviewers need to have the business skills and insight to be able to interpret both Corporate data and interview outputs in a useful manner.
Management Action and Payoff
The recommendations made should obviously by implemented but there can be difficulties. There can for example be political impediment to change and in some countries it is impossible in practice, on economic grounds, to replace staff.
Once recommendations are implemented and sales gains monitored the process needs to be repeated to continually ratchet up the sales conversion ratio. This ensures the outputs from promotional activity are not wasted.
Combining an increasing sales conversion ration with higher promotional actively has a powerful multiplier effect of sales.
Peter Swead
Paramarq Ltd
Tel: 020 7667 6350
www.paramarq.com