“A SALES PROCESS IS A REPEATABLE SERIES OF CUSTOMISED STEPS THAT YOUR SALES TEAM USES TO CONVERT ITS PROSPECTS INTO CUSTOMERS”
All businesses have a sales process, whether they are aware of it or not and each process has a discrete number of stages. Those stages, and the number thereof, will vary across businesses depending on the complexity of their products and their buyer journey.
Establishing your Sales Process is much like building the foundation for “sales house.” To establish your Sales Process, you need to understand the basic path your current customers follow from initial interest through to buying. Commonly this is referred to as the Customer Journey. Mapping out your current customer journey, understanding each step taken to successfully convert customers is the basis of defining the sales process for your business. Sales Process formalises that journey, defining the roadmap for sales leads and what has to happen at each stage before progressing to the next stage.
But the first step is to understand and define your Sales Process.
For example; a new corner shop has opened in your neighbourhood. If you think of yourself as the customer there are a number of possible interactions you may have with the shopkeeper:
• On some days you may walk straight past
• On another day you might think you feel like something, walk in but then decide against it and walk out
• You may walk in feel like something, ask the price but decide against a purchase
• Or you walk in, ask the price then make a purchase
These possibilities represent the stages of your journey as a customer. For the corner shop their Sales Process might be:
If you had decided not to proceed with purchasing the chocolate bar then the appropriate stage for your opportunity would have been Closed – Lost. Each potential sales is commonly known as an opportunity, in many Customer Relationship Management (CRM) systems an opportunity is commonly referred to as a deal.
Having a defined Sales Process makes it easy to analyse and predict what future sales revenue could look like, known as Forecasting. Understanding customer volumes, buying cycles and potential purchase values enables business to "predict" the future with a level of accuracy. Understanding your Sales Process also enables business owners & sales managers to focus on the sales activity & behaviours needed to reach sales targets. It is not possible to manage sales results, but it is possible to manage sales activity.
Naturally not all people that walk past our corner shop will go in and purchase, not all that enter the shop will find what they want and so will not purchase. On a given day only a percentage of those passing will enter, only a percentage of those entering will purchase. If our shopkeeper was to conduct a survey a simple daily analysis may look like this:
Our shopkeeper knows from business analysis that the average spend per customer is $10, and that to meet the financial targets of the business the daily sales revenue target is $2000. Given this we can see that on Monday 150 purchasing customers will only bring in approximately $1500, less than the revenue target.
How can our corner shop increase its daily revenue?
Upsell is one option, if we can increase the average spend that will increase revenue but will not be enough to bridge the gap on its own. Analysing the foot traffic data provides our shopkeeper some useful information:
This shows that 30% of people either walking past or entering the shop will make a purchase. There are a number of possible strategies our shop keeper can use to drive marketing activities in order increase sales:
It is not possible to manage sales results, but it is possible to manage sales activity.
In the world of Business to Business (B2B) sales a potential sale or project engagement is also an opportunity. From the time you first become aware of a prospective customer until the time you are formally engaged that opportunity will also go through a number of stages in your sales process.
As we have seen in the corner shop example, not all opportunities will progress though all stages. Some will fail to progress, some will go on hold and some opportunities will be lost. It is a fact of life in the sales world that not all opportunities you are presented with or tenders you submit will be won. To measure or track those prospects common practice is to utilise a sales pipeline.
The terms sales pipeline and sales funnel are interchangeable. Both provide the same level of visibility of your prospects, or opportunities, as they move through your particular sales process. In a twist on this theme we have developed the Sales Rocket; after all unless you fuel your rocket with enough Prospects how can you expect sales to take off?
Pipeline management is a vital aspect of sales growth. How your sales team progresses deals through your sales pipeline is determined by your sales methodology. Pipeline management and sales methodology are subjects we will cover in future articles.