by Bob Zaruta, President/CEO, NWIRC
I want to commend all who attended one of the three Spaghetti & Sales events that NWIRC held in November, and their companies. Surely, these individuals wanted to enjoy a great Italian dinner (bravo Luigi’s in DuBois, Colao’s in Erie, and Muscarella’s in Sharpsville) and to engage in lively conversation with their peers in a casual setting. But these growth minded leaders took time after a full day at work to seek out new knowledge and practices that could lead to sales improvements, both organizationally and personally. Even more impressive is the fact that these companies have been experiencing significantly higher sales revenues and are expecting that trend to continue for the foreseeable future.
Think about it. The focus of our session was the four drivers that can help a company close the gap between current sales levels and goals, namely 1) increase the number of opportunities in the sales pipeline; 2) improve the conversion success rate from quoted to secured; 3) increase the dollar value of orders; and 4) decrease sales cycle time. Most of our attention during the three evenings was spent on sharing best practices and tools with each driver and discussing specific actions that can lead to sustainable revenue growth. Despite sales rocking, these business leaders showed zero complacency and were the epitome of GE’s Jack Welch quote, “change before you have to”. They had big appetites to learn, and we gladly looked to serve up some recipes for success.
As I reflect on the conversations during our spaghetti dinners, a couple things bubbled to the top. First, buying conditions have dramatically shifted in recent times. For years in similar sales settings, I would ask my audience to think of everyone in their conceptual marketplace that could benefit from their offerings and estimate at that moment what percentage was actively evaluating suppliers for similar offerings. I typically would hear 10 to 15 percent were active leaving 85 to 90 percent not looking (latent). In more recent times, including our Spaghetti & Sales events, the response has totally flipped where 85 – 90% of the market is actively looking and 10 – 15% is not looking. The supply change disruptions, skilled labor shortages, and other financial/operational challenges have hurt the ability for some companies to meet their customer’s production, on-time delivery, and quality requirements opening the door for their competitors to enter the buyer’s process.
Why is this important? The latent buyer, regardless of the percentage in the marketplace, represents a great opportunity for profitable sales growth. Sellers who can help transition a buyer from ‘not looking’ to ‘looking’ before the company begins to ‘shop’ other potential suppliers is likely to win the sale 85% of the time. In short, it pays greatly to get in first and be company A. This requires a mindset to be a proactive seller or selling organization and to make it a strategic priority. Being proactive is for sure a twofer in that it addresses Driver #1 by adding more opportunities in the sales pipeline along with improving the conversion success (Driver #2). I would strongly argue that it is a trifecta in that it can also increase the order dollar value (Driver #3) because the earlier that the seller enters the buyer’s process, the greater the opportunity to be a problems-solver and deliver value as a trusted advisor (opposed to just a qualified vendor). Additionally, ‘active opportunities’ are much more competitive and often require skillful reengineering during the sales process to replace company A.
My second reflection point is the desire shared by many to address Driver # 4 and shorten the sales cycle. The team from G.W. Becker at the Spaghetti & Sales in Sharpsville talked about their incredibly long sales cycle and how their buyers today have expanded demands and expectations over their predecessors. Taylor Smith, who recently moved into a new sales role with PSNERGY, LLC, asked great questions and took copious notes at the Spaghetti & Sales in Erie. She posted to her LinkedIn network that she has been working hard to integrate some new ideas into their process and looked forward to hopefully speeding up their sales cycle.
The significant increase in ‘active opportunities’ is driving more sales activities and stretching resources that could adversely impact sales effectiveness. Many were particularly interested as we dove deeper into the practices and tools to formalize a sales process that is aligned to their buyers both behaviorally and procedurally and how that could not only decrease sales cycles but improve outcomes.