Here’s How Sales Processes Grow Sales Win Rates by 18 Percent
- Optimized sales processes accelerate sales onboarding time, filter out non-qualified leads, increase sales velocity, lower cost per customer acquisition, improve sales forecasting and most importantly, increase the sales win rate.
- Research published in The Sales Excellence Report shows overwhelming evidence that salespeople who apply predictable processes outperform those who don't.
- Research published in Harvard Business Review provides similar findings, including "There was an 18% difference in revenue growth between companies that followed a formal selling process and companies that didn't."
Sales Process Design
A sales process is a roadmap that guides sellers through sequenced activities to convert a lead into a customer.
A successful process advances a sale opportunity through a series of progressive stages. Each step provides guidance, prescribes actions and concludes with a verifiable outcome that either disqualifies the opportunity or advances it to the next stage.
The most successful processes leverage three key capabilities.
- They align the buyer's purchase process with the seller's sales execution. This alignment contributes to repeatable steps that if properly executed lead to a predictable outcome.
- They convert the company's sales methodology to action and impact. The company's sales methodology clarifies its most compelling customer value, including its competitive advantages, unique value proposition (UVP), core competencies and competitor differentiation. The most successful processes insert sales methodology action and content into the sales cycle steps where they will be most impactful.
- They aid sellers with recommendations, information and automation. Great sales processes facilitate guided-selling with contextual content suggestions, next-best-action recommendations, lessons from prior sales pursuits and technology enablement. They don't just show sequenced steps, they apply context to each step in a way that promotes the company's strengths with relevant messaging, compelling insights and unique positioning. When done correctly, each step creates momentum to accelerate the sales cycle and credibility to lead the customer through their purchase process taking the most direct route.
Sales Processes – Why Some Work and Some Don't
Too many salesforces use generic sales processes which at best deliver generic sales performance. To do better, your process should align with the buyer's purchase process, leverage your sales methodology and be built on your competitive advantages, UVP, customer value and buyer insights.
Your selling process, including its steps, activities, milestones, phase gates, exit criteria, duration and metrics, will also vary based on your sale value and complexity.
Selling lower value solutions to individuals or small teams is best supported with a process consisting of fewer steps, highly repeatable activities and faster velocity. In this type of Small and Midsize Business (SMB) sales process, sellers will be working many opportunities at the same time, so sales cycle speed, efficiency and cost of sale are of primary importance.
Selling higher dollar solutions to buying committees or the C-suite will require more sales steps, activities, flexibility and duration. Enterprise sales processes are more comprehensive and dynamic and require integration with a strategic sales methodology, sales team-based coordination, and more sophisticated assets and metrics.
While sales cycle efficiency is important, metrics will prioritize sales effectiveness over efficiency. Small increases in measures such as win rate produce large revenue impact and generally offset negligible fluctuations in sales cycle duration or customer acquisition cost.
Whether an SMB or enterprise process, each step should provide guidance, buyer insights, recommended actions, supporting assets (tools, content, messaging, and templates) and clear exit criteria. Sales step progress will also factor into the calculated win probability and forecast report.
The selling process generally focuses on one step at a time, completes that step and then moves to the next. Some pundits argue that the process isn't a straight line and buyers haphazardly jump from one step to another.
However, chaotic pursuits are more indicative of a failure to lead or broken process than erratic buyers. When buyers backtrack or seemingly jump around the selling process, it's a signal that the seller didn't align the process with the buyer's purchase journey, or a prior sales step was not fully completed.
The Proof is in the Payback
Research findings published in the Sales Excellence Report revealed a notable correlation when comparing Sales Process maturity with Sales Win Rate.
The data reveals significant measurable upside impact. Improving your sales process maturity from Informal to Formal increases sales win rates by 8%. That delivers a significant top line revenue uplift. Further advancing to Optimized increases sales win rates by an additional 4%.
Comparing Sales Process maturity to quota performance also revealed meaningful correlations.
The data show a direct correlation among sales process maturity and the percentage of the sellers making quota.
The 16% difference in quota achievement between Informal and Formal processes not only sees more sales reps successful, but delivers downstream benefits such as improved culture, lower sales churn and less reliance on end of period salesforce heroics.
Additional third-party research uncovers similar findings.
A study published in Harvard Business Review (HBR) found that companies with standardized selling processes achieve up to a 28% increase in revenue as compared to those that do not.
Another study in HBR found that 50% of high-performing salesforces identify having "closely monitored, strictly enforced or automated" sales processes. This is compared to 48% of under-performing salesforces which identify as having informal selling processes.
The Point is This
Poor selling processes are reactionary, aimless and generally adopt trial and error pursuits. They consume more time, increase sales cycle duration and inevitably incur more losses.
Good processes not only increase sales win rates but also deliver bad news early. Qualifying out of unqualified opportunities is difficult for many sellers. But a solid selling process brings objective measurement and evidence of predictable sales losses. This gives sellers the confidence to make calculated decisions which will reduce sales losses and reallocate limited time to more qualified opportunities.