“What’s your biggest problem?”
“We just need more leads! If you just turn on the faucet and get us more leads, we will be cranking. We close about 80% of the prospects that come our way.”
This was a real-life exchange that occurred between us and a client last year. We had just been hired to a 12-month inbound marketing retainer agreement, and as we started our engagement we discussed their sales closing ratios.
Our new customer was very confident in their ability to close new business. They assessed at the beginning of our relationship that lead development was their primary business issue.
While we questioned their optimistic figures, we were confident that we could make a difference for them by creating a steady stream of leads, and combined with a reasonable closing ratio (maybe half of what they said), we could hit a home run for their business.
But as we were soon to find out, their lead to sales ratio was much lower, closer to 15%, and this led us back to the drawing board to help them improve their processes.
While our client was correct that they had a lead development issue, we found out that they also had a sales process issue.
An issue that was just as important to correct.
You see, getting a lead is one thing, but turning an opportunity into a sale is quite another. And as our client soon found out, having a lead generating machine without a well-defined sales process can lead to wasted opportunities and money flying out of the door.
Here are 5 ways that we helped our client increase their closing ratio, and actionable tips that you can use to increase your sales.
Tip #1 - Track Results
Entrepreneurs by nature are an optimistic bunch, and sometimes need a dose of reality. Without a proper mechanism to track business results, it is easy to operate by feelings. If you are never aware of the “TRUE” results, it’s easy to operate in “Fantasy Land.”
This can be disastrous to your business.
Upon hearing that our client closed at an 80% rate, our first reaction was “Yeah Right!!” Having dealt with this type of optimism before, we knew as we dug into the actual results we would probably find a lower closing ratio, but we never suspected that the gap between our client’s reality and actuality would be a whopping 65%.
Our first recommendation was to get our client on HubSpot’s all-in-one sales and marketing platform and CRM system. By giving our client access to sales and marketing metrics through HubSpot, we could show our client the reality of their situation – a 15% closing ratio. As the leads increased, which occurred quickly, it became obvious that there was a problem closing sales.
Armed with a true measurement of effectiveness, this allowed us to pinpoint issues with their sales process, and ultimately help our client develop new sales prospects AND capitalize on those opportunities.
Tip #2 - Be Timely
Common sense tells us that the quicker that a lead is contacted, the better chance of turning that lead into a sale. Many companies do not have a well-coordinated process to handle leads that come in from the internet.
A lead response survey performed by the Harvard Business Review indicates that in general B2B leads receive extremely slow response times from sales teams. Here are some of the shocking results from the study.
- The average first response time of B2B companies to their leads was 42 hours
- Only 37% of companies responded to their leads within an hour
- 16% of companies responded within one to 24 hours
- 24% of companies took more than 24 hours
- 23% of the companies never responded at all
The first and last statistics jump out at me. 42 hours average response time for a lead, and 23% of companies not responding at all. Yikes!!
Thankfully for my client, the issue was SLOW response time, and not NO response time. We were easily able to put systems into place to increase response time, and saw results improve quickly.
Tip #3 – Align Sales and Marketing
Many companies operate in silos where departments don’t communicate, and never is that more evident than the tension that at times exists between sales and marketing departments.
Have you ever heard these complaints from your sales team before?
“These online sales leads SUCK!!”
“Marketing is a waste of money.”
“Marketing doesn’t qualify leads properly.
How about these from your marketing department?
“Sales won’t stick to the strategy.”
“Sales won’t give us the information that we need.”
It’s important that both groups that serve your organization are aligned. Make sure that your salespeople are prepared before they reach out to prospects.
For example, if a lead comes through a paid social media ad, reps should know the nature of the offer, and what areas to probe for in a follow-up call or email. If your sales reps don’t have this kind of background or foundation, your leads will go to waste.”
Conversely, if your marketing department creates campaigns without getting input from the sales team’s experience with customer pain points, you may be missing the mark on the creative side and be wasting time and money.
By us effectively acting as their marketing department, taking the time to listen to their sales team, we were able to develop higher quality offers that attracted targeted web traffic. As a result of handing off better quality leads, the sales team was better able to close deals, and sales increased.
Tip #4 – Focus on Solving Problems
In the old days, consumers relied on a salesperson for information on products and services.
Here is a shocking stat:
"Prospects are spending more time doing independent research and obtaining info from peers and other third party sources. According to an Accenture study, 94% of B2B buyers conduct online research at some point in the buying process." (Source: Salesforce)
Customers are more educated than ever and are very resistant to the “HARD SELL.”
Make sure that your sales team avoids the hard sell and instead focus on solving problems.
Don’t launch into a pitch about your product. Particularly with online leads, the customer has already expressed interest in a product or service. A more effective approach is to open your conversation with a quick introduction, explain that you are following up to their request for contact and ask “How Can I Help.”
Then, most importantly, stay quiet and LISTEN.
Many of your qualifying questions will be answered and the customer will tell you exactly what issues they are having. You will then be in a greater position to recommend the APPROPRIATE solution for their problem, not what you want to sell them.
Take that approach and watch your conversions increase.
Tip #5 – Understand Your Competition
For my client, the biggest issue affecting his closing ratio was his competition. He was in a highly competitive industry, that was somewhat price sensitive.
As we know, cost is generally a major factor in the sales process, but not the only factor. For our client, whose products were priced marginally higher, we realized that overcoming price objections was one glaring reason that we were losing out on business.
One of the primary benefits that we provided was a thorough understanding of our client’s competition through a competitor analysis that we performed at the beginning of our engagement.
Most consumers won’t make a purchase before performing at least a rudimentary comparison among providers. Understanding price sensitivity as a blockade, we were able to compare their products to competing products and found some major qualitative differences that favored our client.
The sales team now armed with this information, were better able to overcome objections, and as a result the conversion rates went up.
What do these tips have in common?
They all require a FOCUS on building a better business. It is easy for companies to sometimes fall into a rut………. accepting the status quo.
For our client, they really had no clue what their true business metrics were because outside of their gross income, which had been stagnant or declining for years, they really had no clue.
As outsiders, we could look at their business with a fresh perspective, and implement business ideas that truly improved the bottom line.
Investing in online marketing is crucial for any business going forward, but generating leads without closing them destroys the return on investment.
Take a moment to look at your operations and see if any of these tips will help you improve your bottom line.
David, a HubSpot Certified Inbound Marketer is the Chief Content Creator for InTouch Marketing and its clients.