Wether you are wearing many hats in your IT business (Owner AND Salesperson), or have a dedicated sales team (or just one Salesperson), a well defined and documented sales process is essential to driving MRR on a consistent basis.
When you have a predictive sales process, you don't have to be "good at sales".
Yup, that's right. I said it.
You can be pretty terrible at charming the pants off people and still close deals.
In fact, this is something we hear so many technology business owners saying.
"I'm just not good at sales".
If you are looking at your pipeline and wondering why it's either empty, or why it's filled with closed lost deals, it may not be that you are "bad at sales" but rather that your sales process isn't well defined or well documented.
You know what else we hear pretty often?
"When I meet with prospects, they don't know what problems they are having, and it makes it difficult for me to suggest the proper solution."
"I am attempting to use my PSA to store prospective data, follow up with prospects, and follow the sales cycle all the way through to the end - but it feels clunky and disorganized for me. And if something's too difficult I don't necessarily stick with it."
"I don't really have a sales process, but I have a sales approach. I do pretty much the same things the same way every time I come across somebody who may be interested in working with me, but it's not documented. It's in my head. Sometimes it works, and sometimes it doesn't.
"If I could just get someone with a need to sit down with me, I could easily tell them what we do and why we do it. I have no problem talking about service delivery. It's getting them to sit down with me that's the pain in the ass"
If you have ever spoken similar words to the ones above, you should know you are not alone. The great thing about a well defined and well documented sales process is that is solves so many problems across your business.
Even better, the direct benefit of an effective sales process is directly linked to new MRR for your technology business.
If you are wondering if you should invest the time, money, or resources in developing an effective sales process - read on. You will learn about the specific advantages it will provide your IT & MSP business, and how you can get started today with some helpful resources.
Advantage #1 - You Will Never Waste Your Time With Unqualified Prospects, Ever Again.
What if I told that you NEVER have to waste your time talking to a prospect who does not have a interest in buying in the near future.
You would probably be excited, but also, you would naturally close a higher percentage of the prospects you pitch. By eliminating unqualified prospects from ever entering your pipeline, you can instantly boost your sales performance. But how can you identify qualified prospects vs unqualified prospects with a sales process?
There are two ways.
#1 - Defining your ideal client: By defining your ideal client by demographic, geographic, and psychographic data points you are essential creating a "guest list" for your sales pipeline. If someone reaches out to you, or marketing sets you a meeting with someone who isn't on your "guest list", they are not allowed into your pipeline.
#2 - Running a Structured Intro Call: By creating an agenda that is designed to instantly uncover need, you can harness the power to quickly qualify your prospect in 15 minutes or less. A structured intro call includes pointed questions, a specific time limit, and actionable next steps.
Advantage #2 - You Will Have a Better Understanding of What You Need To Invest In, So You Can Get A Return.
If you want to understand how to make more money, faster - you can't just rely on P&L reports.
A P&L report can provide insight on where you are today, and where you will be in the future if everything remains the same. It can also give you insight on how much revenue you need to hit your goals, but it does not provide the answer to where the money will come from.
The question you must ask yourself is "what activity creates the additional revenue I need in my business without investing more time, money, or resources? How do I track this to ensure I create that revenue?" These are two very important questions.
The answer is simple.
You can create more revenue in your business without spending any additional time, money, or resources simply by tracking and improving improving closing ratio.
Let me explain:
If your closing ratio is 30%, this means you must speak with 6-7 interested and qualified prospects to close 2 deals. If a "closed deal" for you is worth $3,000 in MRR, then you can predictably drive $72,000 ($3k x 12 months = $36k, $36k x 2 deals closed = $72,000). All you have to do is invest the appropriate amount of time, money, and resources to find those 6-7 qualified opportunities this year. The money earned minus the marketing costs to attract the qualified prospects would be your ROI.
If your goal is to close $100,000 in MRR this year, then you have to close 3 deals - right? So, that means you have to meet with at least 10 prospective buyers, but attracting more prospective buyers in order to drive more revenue starts to get expensive. Basically you need time, money and resources to create more opportunities. There is no real way here to increase margin.
Unless, you simply increase your closing ratio.
If you increased your closing ratio from 25% to 50%, then you would effectively be able to drive more revenue without investing anything. At 50% closing ratio, you only need to meet with 5-6 prospective buyers in order to close 3 deals.
Advantage #3 - You Can Identify Where In Your Pipeline Your Prospects Spend Too Much Time, So You Can Speed Up Time To Sale.
One of my favorite reports is "Stage Duration", or otherwise known as "Time to Sale".
This report not only provides insight into how long a prospect spends in your pipeline, it provides insight into how long the prospect spent in each stage of your pipeline.
Why is this important? In order to drive more revenue overtime, you need to constantly be improving and shortening your sales pipeline and the "Time to Sale". However, the only way to do this is to clearly define your pipeline stages, creating strict rules about when a prospect is allowed to enter or exit a stage.
Once you have defined these stages, all opportunities must be appropriately tracked using a pipeline management tool. We like HubSpot CRM for this for many reasons (one of the biggest reasons is that it's totally free).
What you will most likely notice after a few months of collecting data is that the majority of your deals get stuck in a stage for far too long. For us, it was the assessment stage.
So, what did we do to speed up "Time to Sale"? We made the assessment process easier with forms, automated emails, and landing pages.
We still needed to run an assessment, but just needed to make that process more efficient so we can close business faster.
When you know exactly where the problem is, you don't have to throw it away because "it's not working", you can focus on fixing the piece that's broken to fix or improve the solution.
Advantage #4 - You Never Have To Prepare For A Meeting, Or Spend Any Time Worrying About What To Say To Close a Deal.
Can you run a professional and successful sales meeting with no idea who you are meeting with and what they are interested in?
Oh, hell yeah you can. The key to running successful sales meetings is not spending hours preparing or researching the prospect, it's creating an intelligent script and repeatable process.
This is not a lazy approach. This is all about working smarter, not harder.
Here's how this works:
Step 1: If you have defined your sales pipeline, as previously recommended, you now understand what buying stage a prospective client is in before you meet with them simply by glancing at your pipeline. You also know what it took to get the prospect into that stage, and what you need to do to move them to the next one. This is s powerful, as you don't ned to guess or research - if the prospect in that stage you can be make educated assumptions.
Step 2: Don't waste more than 15 minutes of your time with unqualified prospects. You can do this by creating a script to uncover unqualified vs qualified prospects in 15 minutes or less. If they aren't qualified, get them off the phone and out of your sales pipeline. *If you'd like some help with this simply use the chat feature on this page to request a copy of this script.
Step 3: Use a sales & marketing CRM to understand at a glance where this prospect came from, what they are interested in, and what problems they may be facing prior to your call. This should only take 5 minutes for you to understand. If it takes longer than 5 minutes, you're using the wrong tools or not collecting enough data in your forms to gain helpful insight.
Step 4: Move the prospect further and further down the pipeline, helping them get closer to "closed won". Since you have already defined your pipeline and know what information is needed to get the prospect to the next stage, create a script for each stage to gather that information and validate it in order to move to the next. *If you'd like some help with this simply use the chat feature on this page to request a copy of this script.
Advantage #5 - You Can Spend Less On Marketing, Because You and Your Team Need Less Leads To Bring In The Same Amount Of MRR.
We explain earlier in the article that you need fewer leads when you improve closing ratio, right?
So once you improve closing ratio, how can you help decrease marketing spend?
The more defined and regimented your sales process is, the easier it will be to communicate to marketing about what you need more or less of.
Here's a great example:
After analyzing your pipeline for a few months, you noticed some important trends. A few deals in your pipeline closed faster than usual. After reviewing the data of the deals that closed fast, you noticed that they all had 2 things in common - the industry and user count. You found that Medical Practices with over 15 users closed faster and with a higher dollar amount.
Now, since you also know exactly how long it takes to close those types of deals, and how much they are worth - you can more accurately determine your closing ratio.
So how can you use this information to help reduce marketing spend?
You will want to communicate to marketing that all future efforts should be focused on attracting Medical Practices with 15+ users. From here, you can also provide a budget to marketing and ask them to scale back on opportunities set.
