How to Increase Your Sales Win Rate by Double Digits
- Poor sales closure rates are often the consequence of earlier actions and not the real problem.
- Delivering anecdotal sales win recommendations, a training class of closure techniques or lecturing the team to close better are not real solutions and are going to fall short. Instead, the selling process must be looked at holistically to understand how advancements in any of the upstream actions will yield downstream improvements.
- Increasing the sales win rate delivers significant and sustainable revenue growth. It is also more effective and less costly than just playing the numbers game of increasing the volume of sales pursuits.
So, if your sale opportunity win rate is 48%, is that good enough? Well, sales research performed for the Sales Excellence Report found that's the average. If you are below that average, or possibly at the average but want to do better, increasing your conversion rate drives an immediate impact to revenue growth.
The sales win rate measures the number of sale opportunities that are won. It's an efficiency metric that measures sales closures relative to sales pursuits.
It's a powerful measure because increasing conversions improves short term revenues and creates a multiplier impact to long term revenue growth. Even small improvements to the sale win rate deliver significant and sustained increases to top line revenue.
There's more than one way to improve your sales win rate. In fact, there are over a dozen evidence-based best practices for just this goal. Below are 6 of the best practices we routinely use to help clients increase their sales conversions from 40%'s to the high 50%'s and low 60%'s.
Start with Sales & Marketing Alignment
The first thing to realize is that poor sales conversions are a manifestation of factors occurring before the sales cycle even begins. For example, if marketing campaigns are not directed to target audiences that most benefit from your solutions then leads distributed to the salesforce will be less qualified and incur lower closure rates.
Successful selling starts by targeting the right prospects. Marketing is normally in charge of identifying the high-probability and high-profitability customer segments that yield the fastest sales cycles, highest conversions and longest tenure with your company.
Once leads are distributed to the salesforce, research shows that applying buyer insights and customer intelligence will improve win rates. But customer insights stem from research normally performed by the marketing team, not the sales team. So again, improving sales close rates must be considered in advance of sales pursuits.
Low barrier offerings are another tactic proven to increase close rates. But like the prior examples, offerings are normally created by marketing. These examples show how successful marketing and sales alignment are needed maximize sales close rates.
Improve Qualifications to Improve Conversions
Invest in the deals you can win. Discard the deals you can't.
Disqualifying unqualified prospects early saves tremendous time and allows sellers to double down on the legitimate deals for improved results.
Many sellers are optimists and view their leads through rose colored glasses. That contributes to pursuing deals that cannot be won. And that then creates cascading consequences such as declining staff productivity, unrealistic pipelines, and poor closure rates.
What's needed is structured analysis to bring objectively measured scores to sales leads. It's then the lead score or opportunity score that determines a Go- or No-Go decision.
If you are looking to create a lead or opportunity scoring model, we suggest starting with a commercial methodology as these have been refined over many years and work extremely well. One of our favorites to quickly improve prospect qualifications is the MEDDIC method. It's a specialized sale methodology that brings discipline to an otherwise subjective process.
As illustrated in the above diagram, prospect qualification is not a one and done exercise. The buyers purchase process is fluid, they are continuously learning, and competitors are constantly injecting new ideas which shift their decision criteria. That's why qualification and verification occur throughout the sales cycle.
Technology can also help. Most CRM systems offer artificial intelligence capabilities that can be used to calculate highly accurate lead and opportunity scores.
Remember, an early loss is better than a late loss. For many young sales professionals, it takes discipline and coaching to disqualify unqualified opportunities.
Your Sales Methodology is Your Secret Weapon
Your sale methodology shifts your selling strategy from what you sell to how you sell. And it's quite often the single most influential factor in improving your sales win rate.
The previously referenced research found that sellers with optimized sale methodologies achieve an 11% higher sales win rate than those with informal selling methods.
The research queried eight factors to learn how selling methodologies impact several important performance metrics. The results verified the respondents with Formal and Optimized methodologies earned higher average sale amounts and faster sales cycles.
The data also clearly showed that the single most impactful method to revenue generation was increased sales conversion rates. The below chart shows how conversion rates vary pursuant to the selling methodology maturity model.
Win Plans Define the Path to Success
Your sales win plan is your execution roadmap.
It defines the most essential steps and shortest path to a successful closure. It guides the seller with an orchestrated strategy and tactics to maximize the probability to win. And it creates momentum to accelerate the opportunity. When you operate with a clear roadmap to a defined destination, you are more likely to get there and get there faster.
A sales win plan research study found that when sale opportunity win plans are consistently used, the average win rate increased from 48 to 53 percent.
The research also found sales teams that consistently developed win plans achieved 10 percent higher quota attainment than those who did not.
To be effective, a win plan must be based on buyer insights, demonstrate meaningful differentiation and show a clear and compelling unique value proposition that is repeatedly and sequentially delivered at each step of a prescriptive sales process.
This is another area where technology can help. Your win plan should be integrated with your CRM system at the opportunity record. You can then use CRM workflow automation, guided selling, information reporting and real-time variance detection.
Coaching Creates a Force Multiplier Impact
Business to Business selling is a team sport. And the team needs a coach.
Coaching is designed to develop each salesperson's potential and grow the cumulative revenue impact of the salesforce.
According to CSO Insights Fifth Annual Sales Enablement Study, "For the last five years, sales coaching has had the greatest impact on win rates and quota attainment."
Additional sales coaching research shows that active coaching delivers significant and sustained performance improvements in the areas of opportunity conversions, quota attainment, year over year revenue growth and salesperson tenure. No other productivity investment delivers a bigger financial impact than effective coaching.
However, our experience shows that too many managers apply most of their coaching to the top and bottom performers. While those groups should not be excluded, the biggest financial uplift will come from the core sellers in the middle. Small improvements to the higher number of core sellers will deliver the biggest revenue growth. It will also increase the frequency of core sellers graduating to become top producers.
Like sale methodologies, the effectiveness of coaching is commensurate with maturity level. When correlating performance measures with sales coaching maturity levels, the data illustrated progressive results, as shown below.
To put this in perspective, only the top 15 percent of respondents were designated Best-in-Class, but this segment consistently achieved remarkable results in several of the most important performance measures.
Analytics Keep Sellers on the Right Track
The challenge with sales win plans is that they seldom go according to plan.
Sale opportunity plans and win strategies require adjustments based on new information from the customer, shifting decision criteria, competitor jockeying and new learning by the salesperson.
Analytics can help identify opportunities that will benefit from adjustments. They can identify digital footprints that suggest a change in prospect behavior. They can compare the frequency and quality of customer engagement with prior sales wins and losses and make recommendations.
They can measure trending of engagement activities to know when intervention is needed. They can immediately identify when an opportunity is stalled. They can measure the strength of your unique value proposition. And when combined with artificial intelligence they can make contextual recommendations.
Performance dashboards are often the best place to display analytics and are particularly well suited to show real-time variances for quick intervention.
Sales Analytics research shows the key to effective analytics is to link selling activities to revenue outcomes and measure what matters. Defining the right metrics to track progress and prompt real-time corrective action is an essential best practice for improving sales win rates.
If your dashboards are not continuously suggesting, adjusting or reprioritizing sales actions for your sale opportunities, they are not working.
The Point is This
There are other sales win rate best practices. They include things like Sales Playbooks integrated to sales cycle steps, a prescriptive but dynamic selling process to repeat proven techniques, win/loss analysis reviews to prevent making the same mistakes multiple times, push-based contextual selling recommendations and improved offerings to name a few.
From our experience in helping clients improve sales conversions, we generally find that clients do some tasks well, need to refine some other tasks and need to reinvent a few others. It's a collective effort that starts by identifying what improvements will yield the biggest uplift and making improvements pursuant to a holistic process that can be measured end to end and thereby continuously improved upon.
These best practices can be implemented individually, sequentially or in groups. As said by Mark Twain, the secret of getting ahead is getting started. The secret of getting started is breaking your complex, overwhelming tasks into small manageable tasks, then starting on the first one.