Your success in sales is determined by your ability to close the deals
“Your success in sales is not determined by your ability to communicate. It’s determined by your ability to close the deals.”
In Germany we have about 3,4 million registered companies. 3,1 million are small businesses with less than 10 people employed. Whereas we have a great reputation in the world when it comes to productivity, efficiency or quality, not a lot of people would associate a typical German entrepreneur with sophisticated sales skills. And when we take a closer look, we will find solid evidence or this situation.
In comparison to the Americans for example Germans tend to create a perfect solution at first, before they even think about selling it. We spend a lot of time on research and development, we create prototypes for all kinds of things, test them and improve them. That all happens without getting customers involved.
We love certificates and create all kinds of proof that our inventions are really great, thus leading to an enormous number of patents being registered annually. However, at the same time, most of the money from these patents is then later made in the US. Because Americans have a different understanding of the role of sales in any business organization. Instead of looking for a perfect idea themselves, they just buy access to it and then use their marketing and sales ability to drive revenues. It’s not the product but your ability to market it what makes you money in the end.
If you want to make money, you must launch fast. The founder of Linkedin – Reid Hoffmann – once said: “If you are not embarrassed by the first version of your product, you’ve launched too late.”
It’s important to get feedback from the market as quickly as possible, because that gives you either the opportunity to improve the product based on feedback by the customer while already having some money coming or stop wasting further resources on this project and rather focus on something else. It’s not worth it to invest all the time in finding the perfect solution, but actually never getting started. It’s much more successful if you start and fix the product along the way.
No matter what kind of business you have, all businesses can be improved by increasing your ability to sell. If you have no sales team, I believe the entire organization must be transformed into a sales-driven organization. Thus, enabling every single person on your team to sell and resell the customer at any touchpoint they have.
No matter if the customer reaches out to you by phone, email, personally or interacts with the CEO, accounting or the trainees. Everyone needs to make sure that the customers hold on to the idea to continue doing business with you. Best case – you even wow your customers so much that they actively create referrals for you. To support this structure of a sales driven organization you must make some adjustment to the way your traditionally lead your team and you must train your people to change their way of thinking and communication. But that effort is worth it. It will pay off big time.
However, if your company has a dedicated sales team you should take a closer look at the way they work and if your structure is set up in a way to get you the best results possible.
Based on research it’s been proven that within a lot of organizations sales people do not spend enough time interacting with customers. Only 21% of their time is used for typical sales activities like prospecting and presenting. Most of the rest is wasted with work that should be done by others to support the sales team. Without continues training many sales people are even making up work to have valid excuses on hand why they could not have spent more time with customers. Hereby simply reducing their exposure to potential “naysayers.” Too many sales people have the wrong mindset or not enough strategies to protect themselves from losing their energy once they see that their closing rate is not the best.
As a matter of fact, many business owners do not understand that sales is not just one skill that you either have or you don’t. It’s a collection of skills and not every person is great at every single key component of it. In addition, there is a problem many people totally ignore. How can you work in a continuously changing market environment while holding on to your skills you once learned? World class athletes train every day, while amateurs work out once a week. Success is not a matter of chance, it’s a matter of choice and constant never-ending improvement.
If you are interested in better sales results, become aware of the fact that sales is complex and usually not a single person brings all it takes to the table. That’s why performance can be improved by splitting up roles and assigned them to those who excel at it.
Role number one when it comes to selling is probably the ability to close a deal. If you get a chance to sit down with a prospect you must be able to close the deal, because there is no other situation where it’s more likely to win a customer. Only face to face you can use all areas of communication to persuade your prospect of doing business with you. 55% of your communication is body language. This powerful force is not available to you if you call, email or chat with a customer. The faster you are at closing the deal, the more money you make. Although the amount you consider to be “the profit” might not change, you loose money by the hidden transactional costs, if closing takes you too long. I will get back to this later.
Role number two when it comes to selling is nurturing the existing customers. Nobody likes to feel neglected or accepts that the level of attention they used to get from a sales person declines over time, once they have bought something from the company. Many businesses totally underestimate the revenue potential that hides within their existing customer base. You need to keep in touch with your clients. Make them feel special, let them know that you think about them. Try to follow up on them, find out how they try to improve their business. The closer you are with them, the higher your chances to find or even create opportunities to help them by selling them a solution to any problem they might have.
Role number three when it comes to selling is actually not just a role. While strategies for closing and nurturing can be scripted, toughed and trained, the art of finding new customers also requires some kind of talent. It’s not for everyone to walk up to strangers at networking events, start a conversion on an elevator, being always alert to identify signals of people you randomly meet in order to actively create new business opportunities. This is something you either have or you don’t. Your results can be improved, but finding new prospects is a special discipline.
Based on this short overview one should already see the dilemma. If you are in a small company, if you don’t have the money to set up an entire sales team where every single role is staffed by the best people available in your area, you have challenges. Everyone does, it’s not just you, but having read this you are one of the few that now understands that it’s very unlikely to work with only one person in sales and achieve great results in all areas.
The transactional costs can kill you!
Whatever you do in business, make sure you use the best approach possible. That is hard to find all by yourself, because it usually requires an external perspective to find better ways of getting the work done. But based on my coaching and training experience I want to point out something to you that can either make you a lot of money or kill your business at some point. It’s the transactional cost.
Let’s assume you are in the service industry and in order to pick an example everyone can easily follow, let’s assume you are fixing computer problems for money. In that market many people know exactly what they charge by the hour and if they plan on making more money, they either find more customers or raise their prices. But although obvious that does not cut it. There is more you need to look at. Based on an example of a problem that can be fixed in 15 minutes, I want to present you my chain of thoughts in a way making it possible for you to compare that to your business.
Bill has a computer company. He charges 25 dollars for an increment of 15 minutes or 100 dollars per hour. George shows up at his store with a broken laptop. Bill fixes it in 14 minutes.
We would now expect Bill to charge 25 dollars for his service and as he did not use any material but simply applied some services, people could easily assume he made a profit of 25 dollars. But let’s look at it in detail without taking into consideration that Bill gets a salary and that there is a cost for the time he invested while working on the problem. Because there is something far more important that I want to point out to you and these things need to be taken into consideration when creating your sales and marketing messages and defining your pricing strategies.
What about the hidden (transactional) cost?
Before George showed up at the computer store, he probably called ahead to check whether or not they could help him. In detail he explained the problem based on his lack of understanding with a lot of details that eat up time but don’t necessarily help in regards to the diagnose. They agree on meeting in person.
A few days later George shows up at the store, meets Bill and feels the need to summarize the problem once again. The conversion is a little faster then the one they had on the phone. However, Bill invests time again into the preparation of the service job.
Then he does the work that takes him 14 minutes.
Before he calls George to inform him, that he can pick up his computer, he documents what he did, creates an invoice and then dials George’s number. George is excited to hear that the computer is ready to be picked up and happy it did not take too long to fix it. As he is curious, he wants to hear some details about the roots of his problem, how it was fixed and how this can be prevented in future. Bill shares this information, answers his questions, wait for George to pick up his computer.
Without going more into details, the problem should be obvious. Many businesses in this situation bill 15 minutes for 14 minutes of work, totally forgetting what kind of work was done all around the job, they have just finished. And that needs to be fixed! Here I could help.
However, the reason why I wanted to point this out to you is because when it comes to sales people never keep an eye on how much time did they invest to get a deal. That’s why I find a lot of potential to improve results for companies because it starts with making sure you talk to the right customer.
Not every person in the marketplace should be allowed to work with you. In addition, you need to make sure you have a very solid sales strategy that prevents you from creating an offer and adjusting it again and again, as this time keeps your sales people away from the customers and reduces profits. The more time you need to close a deal, the more money you lose. That’s why a sales force needs to be evaluated and trained regularly. This does not cost you money, it’s an investment. Start with measuring what they do, for example how many calls to the do daily, how many meetings they take, how many offers do they create, how many offers need to be reviewed because the customers needs were not perfectly identified at first, how many deals do they close… and then based on those numbers decide what needs to be improved at first.
Sales is they key to wealth, happiness and freedom. Focus on it, make it work!
Article by Philipp Semmelroth