The answer is – No, it is not !!
The question that keeps pondering upon the minds of the salespeople to the CEO’s of companies is how do I increase my conversion rates? If you are a sales professional, I am sure you have been hearing this all through your career. This is true irrespective of what you have been selling – Products, Solutions, Automobiles, Insurance, Software, Hardware & whatever you may add to this exhaustive list.
We might have all come across the SPANCO (Suspect – Prospect – Approach – Negotiation – Closing – Order) model which is highly used from ancient times. This model has gone through many changes & has been named in different forms by different individuals. The concept has remained unchanged. The purpose here is not to challenge this model or the process that has been followed in the industry. There are generalisations that are done by industry leaders which today is accepted across the industry, ex: software solutions – the conversion rates are 20% – 25%, FMCG – conversion rates are much higher etc. We all know this data comes from decades of experiences & observations in the industry. The point of concern here is the fact that this data remains the same despite millions of dollars being invested into understanding consumer behaviour patterns. While this is a good feed for the company to progress in the right direction, the gap noticed is during the shift from Suspect to Prospect in the sales cycle. For ease of inference in one area, solution sales is taken as a reference point hereafter.
Traditional business schools have taught that a suspect becomes a prospect if they fulfil 3 criteria’s:
1. Do they have a budget?
2. What are the timelines to close?
3. What is the business need that he wants to address using this?
While these are the fundamentals in qualifying a prospect, the question is how does your solution/offering/product help a customer by making his life simpler. Since the discussion here is about solution selling, it is important to address the invisible. Yes, clear value proposition needs to be shown which answers the following to your prospect
1. What are the benefits your business will gain by using our solution & in what time frame? (Substantiate this claim with data). This can also cover the ROI which every prospect expects to see sooner or lat
2. What is the contribution of your solution in addressing the revenue? This can be in terms of generating more revenue, saving cost or giving him an ability to exhibit superior offering to his existing customer (which creates loyalty)
3. While the first two pointers here are commonly followed, here is what is most important. How can I help you in your company’s vision – this is the best part your prospect will like. If a sales person can show a value to his customer that this engagement will help him get closer to the company’s vision, most part of his sale is done.
The learning from the above is that sales teams need to invest more time in the qualification process. If you would be true to yourself, you would accept the fact that a certain percentage of the funnel is only to show numbers to be covered up during the business reviews. The probability that you foresee for closures could be as low as 10% or even lesser. Why waste time? I suggest this time should be utilised to nurture the ones where the probability of closures is higher. You know your solution the best if it doesn’t meet the requirement that is expected & you know your company would not want to invest time in developing something new just for one customer, move on.
Relating the above to the topic of this article, the only way to increase the conversion rates in the early stages of the funnel are to follow these steps:
1. Prepare a well-structured questionnaire to identify the current landscape & the gaps
2. The qualifying questions should have a structure where every succeeding question has a context to the previous comment. This makes it a conversation & not an interrogation. (I have seen a few companies who have this practice but not utilising it to the fullest benefit). Be cautious to ask relevant questions only to his business scenario
3. Do not jump to give suggestions during the qualification process, you might be missing something which the customer wanted to convey & that could be his biggest problem area
4. Do not assume that the problem he is mentioning is not realistic – Probe for details & validate
As one is reading this, the thought that passes to most people would be – it’s difficult to get a prospect to answer these questionnaires. They do not have time etc. This would point to a fundamental gap from the sales – lack of trust. You would only do to a doctor whom you trust & never mind answering any number of questions he asks you because you know he is diagnosing the problem. Sales is no different, if the customer is having a problem area to address, they will open up as long as one has built the trust & is asking relevant questions. The sales person is playing the critical role of a doctor who has come to his rescue. The sales person needs to exhibit the talent of a true consultant. Refrain from saying “Price is not a problem; we will offer you the best price ………….” in the introductory meetings. I know customers are just eager to jump to this point even before the problem is identified.
Like mentioned, there are many strategies that have been developed with a lot of research, yet the increase in conversion rates don’t seem to be close to what is expected. Besides the pointers cited in this article, the next article will have some more pointers where the company’s strategies need to be aligned with the sales function. That’s an interesting area as well, until then – “HAPPY SELLING”
Jeffrey Rakesh – Peak performance strategist
Director Channels & Alliances (India & ME) – Aspect Software
Director – Global Channels & Alliances
Director Asia-Pac (Drishti Soft Solutions)