It’s important to have a well thought-out sales process that includes seller and buyer risk management, standardised customer interaction in sales, and scalable revenue generation.
Every sale goes through the same seven-stage cycle, from prospecting all the way through to after sales service and asking your new customer for referrals.
This guide will help you to empower yourself with the understanding of the basic sales process from start to finish and to create a sales process designed for your business.
Why is sales a process?
A sales process is a systematic approach to selling a product or service. A major advantage of approaching sales from a “process” point of view is that it offers you a set of well-tested design and improvement tools from other disciplines and process-oriented industries. A sales team's fundamental job is to move a greater number of larger deals through the sales process in less time. These are the steps in the sales process:
1. Product Knowledge
It’s important to be well-versed in your particular product, but beware of being too much of a technical expert and getting caught up in a monologue about all the great features it offers without highlighting the actual benefits to the customer.
Don’t assume that a prospect will easily link a feature to a benefit. Instead, that relationship must be stated clearly. Remember, it’s less about the features of the product itself, and more about how the customer will benefit from those features.
Prospecting is about searching for new customers. The key to prospecting effectively is knowing where to dig and what to look for. It’s also important to distinguish between a lead, a prospect, and a qualified prospect.
The most important part of prospecting is to create a profile of existing customers. Next, you should determine whether marketing tactics have been tailored to match each profile. You need to know what the ideal customer looks like in each market segment. Prospecting is an ongoing process that everyone in the company (particularly the sales force) should be involved in.
Businesses strive to generate 'quality' leads, usually determined by the inclination of the prospect to take the next action towards a purchase. Lead generation is often seen as hard work or the result of an expensive marketing campaign. But it doesn't have to be that way. Networking groups are springing up everywhere to help business with their lead generation. To get the desired result, be pro active and build your network, go outside your comfort zones, be patient and persistent, choose the right type of clients for you, use an interesting introduction, and spend more time listening than talking. Importantly, follow up with contacts.
Referral marketing is a process to maximise word of mouth potential. It does this by encouraging, informing, promoting and rewarding customers and contacts to think and talk as much as possible about their supplier, their company, product and service and the value and benefit the supplier brings to them and people they know. One example is Dropbox, which implemented a referral programme to encourage their users to tell their friends about Dropbox. Within 30 days their users had sent more than 2,8 million referral invitations to their friends.
Qualifying a lead
Not every sales opportunity is worth jumping at. It’s become important to weigh which leads are worth your effort—and which are likely to result in a dead end. Learning how to properly qualify a sales lead can be the difference between landing a new deal or wasting lots of energy and money. But by just controlling the sales conversation and asking the right questions, you can quickly find out if you're on the right track. Feel out the sales prospect to see if your product or service is affordable to them, fits a need they have, can be delivered in a timeline that works for both parties, and that the person you're pitching to actually has the authority to make purchasing decisions.
This is where you begin to build a relationship and the intelligence gathering continues. A good approach is crucial to sales success because it will either identify you as an annoying salesperson and cause a prospect’s guard to go up, or it will identify you as a considerate salesperson with something of value to offer. Think about the type of approach you want to take. It’s about eliciting information and advancing the sale.
4. Needs Analysis
This allows you to determine how you can truly be of service. To be a highly effective salesperson, you have to understand what the prospect’s needs are. This requires you to think in terms of solving problems. The only way to do that is by asking lots of questions. Asking good questions helps you determine what will best suit the prospect’s needs. It also builds confidence and trust.
5. The Presentation
Consider your product or service in terms of how it benefits the customer and your presentation will be a focused and relevant dialogue, rather than a long monologue. Nothing is worse than a sales presentation which proceeds from the seller’s perspective. A good needs analysis is important precisely because it allows you to tailor your presentation to your audience, and keep it interactive.
6. The Close
Closing is about advancing the sales process to ultimately get an order. Eighty percent of sales are lost because a salesperson fails to close. You must ultimately ask for the order and no sales conversation should ever end without an agreement to some next step. Do not be satisfied with “we’ll get back to you”. Know what you will say in response to such a remark in order to advance the sale. Also know how you will overcome common objections such as “I need to think about it”, “It’s too expensive”, or “I’ve already got one.”
7. After sales service
Follow ups nurtures the relationship that has been built with the prospect. It’s important to get agreement on some next step each time there is contact. Follow up therefore should never end. When a sale is made, a new type of follow up begins. To ensure effective follow up, detailed notes must be kept on each prospect, preferably on a centralised database.
Having extensive knowledge about your customer enables you to up-sell. This is the practice of suggesting higher priced products or services to a customer who is considering a purchase. It induces the customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale. Up-selling usually involves marketing more profitable services or products but can also be simply exposing the customer to other options that were perhaps not considered previously. A related practice, cross-selling, involves suggesting additional items to a customer making a purchase.
Managing the pipeline
Managing the sales pipeline is critical. Ensure that you put in place a process for building and tracking a sales pipeline and that no one customer contributes more than 20% to your sales. A sales pipeline is the amount of business you attempt to close in a given month, quarter, or year. It is usually presented as a spreadsheet that tracks all of the business your sales force has pursued.
As time passes, you can begin to track what share of sales you close. If that share is consistent, you should be able to forecast sales with greater accuracy, which will give your sales team greater confidence. You will also glean information on where your sales team falls short: For example, is your conversion rate low, or are you converting plenty of customers, but only getting a small share of their total business? Beware of sales people who make optimistic statements with no hard data.
Win-loss analysis can enable you to change your sales strategy because of the information gleaned. Get your sales reps to report on their wins and losses at weekly pipeline meetings. About once a month, conduct a deeper analysis of big deals that got away from them. Send a questionnaire to sales leads that did not close, then analyse the data and report back to your team. This will help you to identify problems or bad fits early on the process, and to take appropriate action.
If you don't consistently measure the factors that turn leads into sales, you're shooting in the dark. Measure the number of calls per day that reps make, and the number of e-mails and follow-up calls that are made as leads turn into opportunities. Sales numbers are not the only metrics. Receiving a call-back in two minutes is four times as likely to convert to sold as an average lead, according to industry data. Measure and communicate these metrics in performance reviews of salespeople.