Firing Up the Sales Engine
“Learn from the ocean; not fearing turbulence, it uses the wind against it to rise instead.” - Matshona Dhliwayo
2022 has not been the year many of us had hoped it would be.
As at time of writing, the S&P 500 is down 23% year to date and the dominance of conversation across the board has been bleak warnings and messages of conservatism - cut burn, extend runway, reset budgets, freeze hiring, push out fundraisings, reduce valuations.
However, most of the conversation has been about the bottom line 📉 … what about the top line? As we gear up for 2023, now is the time to be cautious on spend and be smarter on revenue. 📈
Diagnosing slow sales
My colleague Rick Baker shared a piece last year on “Four Steps for Diagnosing Slow Sales”. In it, Rick outlined how slow sales fundamentally boils down to one (or more) of four issues:
- The problem is not a problem;
- The problem is a problem, but your product doesn’t solve it in a valuable way;
- The problem is a problem and your product solves it, but your pricing and terms are not right;
- The problem, product and terms are all good, but you don’t have the right people (or process) to sell it.
This is a useful framework to diagnose the situation. But let’s say you have a problem and a product that solves it that is priced about right, and are in circumstance 4 above - now what do you do to solve the situation?
In a four part series last year, we explored the strategy of go to market (GTM):
- How should you think about your overall GTM strategy?
- How do you choose between different sales models?
- How do you execute on product-led growth?
Here, we focus on the tactical level of GTM:
- How can you do better in the hand-to-hand combat of sales?
- What can you implement in the near term to lift conversion rates, reduce sales cycles, and increase your velocity of customer acquisition?
- How do you weigh the universe of options?
Unpacking these tactical questions with a team recently, we landed on a useful three stage approach.
Step 1 - Brainstorm your drivers of sales influence and friction
The first step is to brainstorm the factors that might most help or hinder your customer conversations - your sales influence and friction drivers.
- “Influence Drivers”
These are factors that positively increase the likelihood to purchase and spin the sales cycle in the right direction. Common drivers of influence in the sale process fall under:
- Good sales people - hiring the right talent and optimizing the team structure across marketing, sales, and success
- Evidence of user demand - providing the buyer with evidence of demand for your product from within their organization
- Strong community - building an active customer community around the product
- Killer sales collateral - nailing your sales and quote/proposal collateral
- Warm referrals - encouraging or incentivizing customer referrals from employees, customers, or network
- Data and case studies - sharing strong data on ROI and customer stories
- Positive reviews - encouraging testimonials on review sites and marketplaces
- “Friction Drivers”
These are factors that tend to block and slow the sales cycle down. Common examples of friction to the sales process fall under:
- Budgets and pricing - timing customer budget cycles and pricing your product right for the situation
- Legal and procurement - navigating the complexities of procurement and security/tech audits that quickly slow the momentum of a sale
- Incumbent competitors - having “brownfield” conversations (where you seek to displace an incumbent competitive solution that may still have time to run on the subscription license) versus “greenfield” implementations (where your competition is non-consumption)
- Decision bureaucracy - identifying and engaging the right stakeholders and aligning everyone on the sales process
- Poor CRM hygiene - not setting up your CRM properly and having weak customer insights, pipeline workflows, reporting, and/or accountability
The lists above are non exhaustive and there are nuances to every business. Under each driver, there might be multiple ideas or initiatives you can list out as opportunities. Setting up a team offsite with an old school whiteboard is often a great way to get input and distill down the universe of opportunities relevant to you.
Step 2 - Align for impact and effort
You now have a list of opportunities for improving your sales processes. But you also have limited resources and you need to start somewhere. So what do you prioritize?
You should score each idea on two dimensions:
- Expected impact - the likely impact the initiative will have on the business, and
- Expected effort - the difficulty or expected investment of cost, resources, and time you need to make to execute on it
With these scores, you can then plot all your ideas on a 2x2 matrix. Those in the top right quadrant (expected high impact, low effort), you prioritize. Those in the bottom left quadrant (expected low impact, high effort), you deprioritize. Those in the other quadrants, you debate!
Step 3 - Execute
You may think about who on your team should own or be responsible for executing on the sales improvement initiatives.
Over the past decade, we have seen the emergence of new roles and teams labeled “Revenue Operations” and “Sales Enablement”, where the focus is on ensuring coordination across GTM teams, sharing best practices, and managing process changes. Hiring or nominating a dedicated person to this function can work really well for teams in the early innings of their “GTM-Fit“ journey.
You should continually revisit the initiatives and the way in which you weighed their impact and effort. Over time your priorities, the way you structure your teams, and the resources you have at your disposal will change, and you will want to keep that in mind as you make investments.
Over the coming months, we will do select deep dives on some of the common drivers of sales influence and friction, and feature some company case studies and guest interviews. In the meantime, I’d love to hear your thoughts - you can find me on Twitter or LinkedIn.