Understand the sales call cycle and key performance indicators(KPI)
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The sales cycle entails breaking down the sales process into stages.
Determine what the key performance indicators are, namely the key activities & measures that drive your company’s growth or profit. Create realistic targets.
Bill, who had a book merchandising software business, had no idea what a sales cycle was. He ran an independent bookstore for many years. Hi son Jim explained that the sales cycle is a description of the key steps in the sales process between customer and seller.
Bill reasoned that he would meet many customers at trade shows where he served as an expert speaker. This was the best way to meet customers after a talk he had given. He estimated that he may have to meet customers 1-2 times in person at the show and 3-4 follow up calls to close. Bill hoped that they could convert 50% of the customers who they had met at trade shows. He guessed that 80% would re-order the online service when the annual renewal was due. Bill felt that his customers would give him a large number of referrals as the independent book business was a small, helpful community.
Susan had started a sales award gift business but she felt she was still missing something. She thought she could improve the sales cycle by mapping it out. She had no success trying to directly approach CEOs and Sales VPs. However, she could often get a meeting with the CEO’s assistant and would almost always get a meeting with the Sales VP’s assistant. She would call the assistant and ask for a 5 minute meeting saying that they had to see the product to really understand it. She would make a custom sales award for each company that she visited.
The assistant would often get the CEO or Sales VP to take a quick look. Susan noticed that the senior managers were more available early in the mornings and late in the afternoons. She started scheduling meetings at those times. When senior managers saw the product when she visited, her closing rate was 85% versus 65%.
Susan found that she got prompt responses 80% of the time with an immediate personal note to the assistant and follow up call one week later. Re-orders happened 65% of the time within 9 months. As a result, she sent a note to the assistants every six months. While she did not often get referrals, she was very pleased with the results. After her analysis, Susan really felt she had gotten the sales cycle right.
Joan’s beef and bison jerky business was uneven. She wanted to grow her sales so she mapped out the sales process. Sales in the meat shop in Montana were not hard as tourists wanted to buy authentic Montana jerky.The re-order rate was only 25%, which seemed low given how much customers said they loved the taste.
Joan wanted to contact the customers a month after they purchased but she felt that telephone calls were too invasive and emails were impersonal. She experimented with sending postcards with Montana landscapes with a handwritten Howdy and a sentence about the weather or news.
She found her re-order rates more than doubled when she used the postcards. Once a re-order came in, she would make sure that customer would get a postcard every 2 months. Her referral rate was low but the re-order growth made her sales cycle mapping worth it.
FAQ & Resources
What are key performance indicators (KPI)?
KPI are the driving activities & measures in your business. These often include factors that affect sales such as the number of sales visits, conversion rates and average transactions amounts. They include key profits and costs like raw materials prices. Each business has specific drivers. Identify KPI and set realistic targets in appropriate time frames such as 3 months, 6 months and 1 year. Change targets once real data is obtained. Build a plan to achieve targets. This plan should be central to the company’s activities.