MM 2.00Understand Financial Analysis

2.01 Understand sales activities to show command of their nature

and scope.

What is a Sales Cycle? The time it takes a qualified prospect to close the sale.

•Pre-approach through delivery of the product.•This means you have already found someone who has a genuine need.

•Now it's the time it takes to “progress the deal” with all the relevant decision-makers in that company.

What is a Sales Cycle? Cont.

•Once a deal "slows down" in your sales pipeline it might NOT close.

•"Slowing down" means that the communication between you and the prospect becomes less frequent and the execution of agreed-upon actions becomes slower.

•When these things happen your deal has real problems.

Length Of Sales Cycle Can Determine How You Manage Time• Longer sales cycles tend to have a

lower closing rate and more wasted time

• Shorter sales cycles tend to encourage focused attention and quicker decisions

• The frequency of compensation is a critical factor for salespeople

Length Of Sales Cycle Can Determine How You Manage Time Cont.

• The longer the time between critical activity (sales) and results (pay), the easier it is to lose sight of the direct relationship between time use and income.

• The result is a loss of income, loss of potential opportunities and perhaps, ultimately, even loss of the business.

Length Of Sales Cycle Can Determine How You Manage Time Cont.

• The longer the sales cycle for your product or service, the more complex contacts you have to keep organized, the more paperwork and correspondence, the more frequent the travel, the more detailed the management of the account, the more important time management becomes.

Factors that affect the length of sales cycles

• Type of product being sold• Level of experience of the seller

and of the buyer• Relative cost of the item ($15 vs.

$450,000)• Prior experience between buyer

and seller (or reputation) - Trust • Laws and/or regulations

Advantages/Disadvantages of short sales cycles

Advantages• Better turn times so generally

lower selling costs• Better cash flow• Less opportunities for lost sales

and wasted time

Advantages/Disadvantages of short sales cycles Cont.

Disadvantages• Customer can feel rushed• Not enough time to select the

correct product• Customer and/or sales person get

confused when trying to rush the sale

Advantages/Disadvantages of long sales cycles

Advantages• More time spent ensuring the

correct product is selected (better meets the needs of the customer)

• Longer consideration time• Less opportunities for returned

items

Advantages/Disadvantages of long sales cycles Cont.

Disadvantages• Increased turn times so generally

higher selling costs• Cash flow issues• More opportunities for lost sales

and wasted time

How to shorten your Sales Cycle

• Shortening your sales cycle is one of the easiest and most efficient ways for an organization to increase sales and simultaneously reduce the cost of sales.

• There are a number of ways to affect the length of the sales cycle, by far the easiest to implement with the highest rate of return, no technology required, is to always secure a next step with your prospects (leads).

How to shorten your Sales Cycle Cont.

• “Next steps” can take different forms, could be a face-to-face meeting, a call, or an action taken. • “Next steps” commit the prospect to

meeting with you to proactively move the

process forward. • “Next steps” should involve some

commitment on the part of the prospect.

How to shorten your Sales Cycle Cont.

• Pre-qualify your prospects by encouraging current customers to give you referrals

• Offer information in forms that engage and excite the potential customer (they can read, watch and study before the first or future meetings)

Accelerate Your Sales Cycle

•Allow sales teams to capture, maintain and continually improve their selling content, and automatically customize it for use in communicating with prospects.

3 Ways to Speed-up Your Sales Cycle

1. Choose Your Prospects Ruthlessly

2. Get To The Executives First 3. Intensify Their Pain

Choose Your Prospects Ruthlessly• You want to have a profile of

what buying customers look like when you are prospecting.

• Profiles will enable you to quickly decide whether to engage in a sales effort.

• Prospects who don't meet your profile should be avoided.

Get To The Executives First• Not getting to the decision-makers

early in the sales cycle is a common reason for lengthy sales cycles.

• Executives want to know how you are going to increase their revenues or efficiency, thereby saving money and/or time.

• Executive’s biggest fear of salespeople is that you will waste their time with techno-babble.

Get To The Executives First Cont.

• The strategy is to get their attention with specific stories and questions that dramatize the pain they are trying to avoid. Use specific examples that the customer executive can identify with.

Intensify Their Pain• When your sale is low on their

priority list, it is because the executives believe they have bigger problems to focus on.

• You can influence their perception and priorities by getting them to experience the consequences of the unaddressed problem in advance of it happening.

• You want to make this issue/problem feel real in the present moment.

Actions that can lengthen the sales cycle• Not preparing properly before meeting

the customer (incomplete pre-approach)• Losing track of information• Reviewing already agreed to decisions• Failing to turn in paperwork on time• Failing to make it to appointments or

arriving unprepared