Avoiding the leapfrog effect in sales
Over the years, I have regularly seen what I call the “leapfrog effect” in sales. It is very common with small businesses where the person responsible for sales has to double up in their role within the organisation.
For example in a small IT company, you might find the sales person is also responsible for setting up and training staff on the new system. This practice seems to be normal for many service providers in various different sectors, because generally it boils down to money and resources.
Whilst it makes complete sense to maximise resources, sometimes this fluctuation can be to our detriment. When we leave our “sales development role” and step into “service provider mode”, we can get so involved in doing the job that we can take our eye off the ball in terms of generating sales.
Managing the sales pipeline takes time and when we stop prospecting, we reduce the number of fresh leads and opportunities available to us over time because not everyone we talk to turn into an opportunity or a possible meeting and not every proposal we submit will convert into a sale.
When we take a break from prospecting, it takes time to build it back up again. Obviously, this can depend on many factors such as the number of leads we have, the product or service we sell, the cost, level of complexity, the sales person’s ability and experience, the reputation of the company, the number of competitors, and the demand in the marketplace. We might find we are lucky if a potential customer is in the market to buy right now. However, most companies will find that it can take anything from one to three months between the time they initially talk to someone to closing the sale.
This quiet time is what concerns me – the indent of the “leap”. During this time any revenue earned may have to be pumped back into the business as we adapt back into “sales mode”, thus eating into margins. So, the question I often ask is - what can small businesses do to reduce these fluctuations in sales?
Here are a few thoughts and ideas I have shared with clients many times:
- Always be prospecting – even during busy times (even if it’s just a couple of hours a week)
- Be very focused on the types of customers and markets you target, saving time and resources later
- Develop slick sales strategies and efficient processes for your various target markets
- Get your pricing right so its market competitive but gives you a sufficient margin
- Keep in touch with existing customers and ask for referrals
- Get back in touch with dormant customers – you never know when they may need you again
- Be prepared to disqualify leads if you feel it’s a waste of time. However, be polite about it
- Adopt a company wide sales culture – educate staff to think sales and reward them for their efforts
- Consider hiring a sales person – even on a part-time basis
- If selling is your strength – hire other staff to carry out the work even on a contract basis
For more tips, tricks and ideas check out our sales training courses here.