The past year 2009, was difficult for many businesses. 2010 will be even more challenging. Due to the global economic recession, current account lists have been reduced in both profitability and numbers. Businesses are now focusing on new business development to increase revenue. The majority of sales jobs on monster.com and careerbuilder.com are for people who can grow the new business rather than expand existing businesses. New business development is so vital to many sales executives, so I thought I’d write an article about what I consider one of the “golden nuggets” that can help increase their sales organization’s productivity.
Your sales team’s ability to QUALIFY NEXT PROSPECTS is the golden nugget. It’s helpful to look at the sales funnel to better understand the impact of bad or good qualifications on new business development. Two characteristics of the sales funnel I believe you are essential for new business development are: First, opportunities that move down the funnel require a more significant investment of time and money. It is evident that if an unqualified prospect moves down your sales funnel, it will become costly in time and money very quickly. You will also lose the chance to invest these resources in other opportunities. Second, the highest number of prospects are found in the first stage of your sales funnel. This is often called prospecting or initial contact. Your sales team’s average time spent qualifying prospects in the first stage can have a massive impact on their time. A qualification time of 30 minutes per prospect can save your sales team 3,000 hours per week if they reach out to 100 prospects per week. That’s equivalent to adding 75 full-time employees per week.
How does qualification fit in the sales funnel? Qualifying is the process where your salespeople determine the quality of a prospect and decide if it is worth following upon. This is shown in the sales funnel by the prospect’s movement from the initial contact stage (often called “initial contacts”) to the second stage (“needs analysis”) or elimination from the sales funnel. Qualifying prospects has a significant impact on the quality of inadequate opportunities and the time that salespeople spend qualifying them. Here are some tips to help your sales team qualify potential opportunities efficiently and effectively if you have 75 salespeople or more.
A qualified opportunity is one where the salesperson has talked with an individual involved in the decision-making process and has determined that the target organization has a need. The salesperson is also sure that the target firm has the interest/commitment necessary to fulfill that need. There are many levels of quality, and you should choose to invest your resources accordingly. I find there are three types of prospects that businesses gravitate towards once they have reached the quality threshold. 2) Competent enough to allocate local resources (engineers and regional marketers, sales managers) to the opportunity. 3) Enough to assign corporate resources (regional Sales VPs, product managers, and C-level Suite) to the opportunity.
Create Qualification Questions:
Once you have identified what a qualified opportunity is, you need to identify the key questions your sales team must answer in order to determine the prospect’s quality. I believe in looking at my top employees to gain insight. I almost always find that the most successful new business development salespeople have a solid understanding of the questions they ask to determine whether the prospect is worth the effort. For example, a good qualification question I see elite salespeople answer is “Does your prospect have an assigned budget for the project/product/service?” This might help you determine if the prospect is willing to fulfill their needs.
Answer Qualification Questions:
Now, it’s time for you to embed these questions into your sales management, sales processes, and CRM software. This is where the key is to stress the importance of answering these questions as often as possible. This will create a culture (rather than a “flavor-of-the-week”) that emphasizes the importance of answering qualification questions. It is possible to just ask them to answer them, but they will likely not see the questions as being important.
Find a sales training organization that helps salespeople become qualified. Follow up with support. Here are some tips to help you in sales training.
Set goals and measure results: It is essential to track your progress towards your goals. You can start gathering data to establish a baseline if you aren’t sure about the goals you require. Your goals should be consistent with your other sales goals.
I find that most companies have difficulty qualifying because they rely too heavily on the subjective and objective questions their sales team answers. An objective question requires a black and white answer, such as “Is there an assigned budget for the project/product/service, and what is the amount?” Because customers are unique, objective boxes don’t fit them. A salesperson’s value is often in their intuition. It might be a mistake to hold back on investing in prospects if the answer is “Yes.” Unobjective questions are based solely on the view of the salesperson. This perspective can vary from one salesperson to the next. One salesperson may see five qualified prospects from a prospect list often, while another might only see two. It is difficult to see the opportunities you should be investing your resources in. It is essential to use both objective and subjective questions in order to get as precise a result as possible.