How to Improve the Three Most Important Metrics of Your Sales Cycle

Sales teams are the essential drivers of an organization’s revenue, and they engage customer needs with smart deals and provide a collaborative evaluation to match customers with the right offerings. The sales organization is the customer’s touch-point for engagement, enrollment and the overall experience. Sales leaders, who have unique training in these areas want to align their organization closely to customers’ expectation. They have an innate and artful sense to notice needs and offer an improvement to reduce friction and create gain.

One such friction is the customer’s buying experience which is conversely the organization’s selling experience. The customer is making a purchasing decision which is his/her struggling moment. They are hiring the product to solve a job for them, by overcoming adoption barriers like inertia, uncertainty, and anxiety. Customers also hire the organization’s expertise in solving their problem and expect it to project that confidence.

By framing the selling experience holistically, the sales team can introspect their sales cycle. A critical question is if the sales cycle is doing enough to reduce the anxiety of the customer which is part of the emotional construct of his/her purchasing decision. Sales leaders should hence address the sales cycle inefficiencies which cause customer anxiety. The sales organizations that fail to address will continue to experience sub-optimal sales metrics performance.

 

The three most common inefficiencies of the sales cycle include:

 

Inaccurate mapping of customer needs to the right offering

Customers feel more comfortable and less anxious in their purchasing decision when the sales team is actively listening and accurately mapping their needs. The customer at this point of qualification is looking for the promise of potential. The sales team is engaging the customer with the capabilities of products which is specifically targeted to ease the concerns of the customer. It is a decision point in the sales cycle which has disconnected data and systems leading to effect lead conversion rate adversely.

 

Error-prone complex product configuration

Sales teams are selling products with numerous features and sophisticated options. By using manual processes to configure the complex products the sales cycle is error-prone and time-consuming. Additionally, the pricing is disparate, and opinion-driven which introduces downstream problems for approval. It causes multiple quote generations and affects the customer’s workflow. The customer value is not maximized as most time is spent in error resolution. The average sales cycle time for a manual sales cycle is often higher, and the opportunity cost of not pursuing new leads is the underlying problem of low sales morale.

 

Tedious approval processes and delayed quote generation

Pricing and discounting in a sales cycle are often on the fly and hence go through an uphill approval process. The customer is enrolled to use your product is eager for the product to be delivered and hire it to get the job done. The organization should hence be motivated to generate a quote and fulfill the order quickly. In the age of quick fulfillment, this experience can improve an organization’s chances of rehiring through a value-added service which will significantly enhance the organization’s ability to increase its revenue.

 

If the sales leaders are in agreement and have identified the above inefficiencies, the good news is the road-map to success is easy-to-adopt and straightforward. Moreover, it is proven by research that the adoption of a CPQ process and technology, your company can leverage the power of automation and a rules-driven sales cycle which impacts the three most important metrics.

 

 Lead Conversion Rate

 The organizations that use CPQ process are leveraging its capability of intelligent rules-based configuration. The questions asked during discovery can directly be mapped to the right product offering and empower the sales team to demonstrate ability. Research shows sales teams achieve 4%[1] improvement in lead conversion as they eliminate errors which impede customer experience.

 

Average Sales Cycle Time

The customer expects the organization to adapt to the new economy’s business models which allow for flexibility and agility. The sales team should use rules driven pricing and have the flexibility to adjust prorated calculations and subscription-based pricing. The rules-driven approach reduces errors and improves customer experience. By adopting automated quote generation and approvals, sales organizations can recognize 6.7%[2] year over year improvement in the average sales cycle. Much of this improvement is owing to a 70%[3] reduction in errors in quoting.

 

Total Company Revenue

As an overall effect of customer retention, lead conversion effectiveness, and error reduction, research shows a 48%[4] YoY improvement in total company revenue when compared to non-CPQ users.

 

 

The level of growth is a direct testament to process-centric and customer-aligned sales organizations which provide the significant impact to the bottom line when empowered with the right tools.

 

[1] Source : Aberdeen Group, July 2014

[2] Source : Aberdeen Group, January 2017

[3] Source : Aberdeen Group, January 2017

[4] Source: Aberdeen Group, January 2017

By |2018-08-21T14:09:33+00:00August 21st, 2018|Configure Price Quote|Comments Off on How to Improve the Three Most Important Metrics of Your Sales Cycle