It seems to be a trend at the moment amongst sales gurus to highlight that “there are only three ways to increase sales”: More leads, higher conversion of leads to sales, and more revenue per sale for example.
Leaving aside the fact that pointing this out is hardly a revelation – and that the real value comes not from naming the three levers, but from actually figuring out the best way of “pulling” them for a specific business; in fact there is another, often overlooked lever: velocity.
Sales velocity is the cycle time of the sale from initial lead to closing. Complete that cycle faster, and you free up time to work on another sale. Double the velocity of each sale – and you can sell twice as much.
Of course, it’s not that simple: of all the sales levers, velocity is often the most difficult to improve. Push too hard too fast and your potential client will push back. There’s often an optimum pacing for each sale and to go faster than that optimum can in often lose you the sale completely.
Veteran salespeople are used to naive sales managers pushing them to try to accelerate a close to hit this month’s or this quarter’s targets. But there’s a huge risk that pushing to hit an internal target can damage your chances of making the sale. And it’s one of the easiest negotiating weapons for purchasing professionals: if you know when your salesperson’s quarter-end is you can often get a huge discount by timing your purchase right so that the salesperson gets desperate as the end of their reporting period looms.
But putting that aside – velocity can often be a valuable area of focus for improvement for salespeople – simply because most salespeople rarely consider it.
The best way of looking at the sales velocity lever is not to think about speeding up – but instead to think about avoiding delays and removing roadblocks.
Roadblocks can take many forms: you don’t identify underlying client concerns early enough and as a result they hesitate to make a decision; you forget to follow-up on time or wait for your client to take the initiative; you’re not aware of the timing of financial approval committee meetings in your client’s company and as a result your client misses the deadline for submission and has to wait a quarter.
One of your key jobs as a salesperson is to know what these roadblocks are likely to be and to make sure they don’t happen. Work to surface concerns early on and address them, never be late with follow-up, understand the client’s decision-making process (see my post Avoiding the Treacle Effect for more details of this one).
Your first step though is to understand the impact of velocity: simply put, halving the cycle time of a sale can have as much impact as doubling your conversion rate or number of leads. Having that message in the front of your mind, should help you pay attention to this hidden lever and suddely you’ll spot opportunities to avoid delays and remove roadblocks.
Happy driving!
Ian
You are so right Ian.
People have been going on and on and on about the 3 ways to grow a business/sales model for years.
I think it originated from Jay Abraham and he and every trainer under the sun has been “dining out” on it every since. As you say, “a revelation of a discovery!” Not!
The bottom line is that by speeding up sales cycles it indeed enables you to be more productive and prospect more often and SELL more!
The art in this is knowing what to do in-between delays and decisions. Sales cycles are a little longer now in this recession so you’ll really hack off a lot of your prospects and clients if you’re too aggressive and conversely if they don’t hear from you, you’ll be forgotten!
My tip for speeding up your sales velocity:
Map out your perfect sale on a whiteboard or flip chart. Every single stage should be noted. Then, note down the best case time and worse case time for each stage. At the end add up all of the best and worse cases and you’ll get something like:
BEST CASE 5 DAYS
WORSE CASE 29 WEEKS
AVERAGE 11 DAYS
Then, as a sales team work out what to do and how to do it at each stage of the process to narrow the gap in terms of days.
Just be reducing the average number of days in the cycle from say 11 DAYS down to 9 DAYS frees up 2 days per prospect that can be used elsewhere to drum up more business or farm existing clients.
SALES VELOCITY IS A HUGE FACTOR in the success of a salesperson and Ian has nailed it so make sure you do not ignore this one bit.
Sean
This is great stuff Sean – that’s a fantasic and practical process that everyone can use to speed up their sales.
ian
Great post & i really like the way it’s been explained.
Ian,
The ‘more leads’ and ‘sales velocity’ factors are often conflicting forces unless ‘more leads’ in fact means ‘more qualified leads’. It’s always better (and faster) to win 2 out of 4 deals than 2 / 10. Velocity is always increased when qualification is rigorous.
Coincidentally, just a while back, I wrote a post about the 4 levers of sales velocity. If you’re interested you can find it here.
http://sales20network.com/blog/?p=962
Thanks
Donal