The Sales Growth Series – Improve your Conversion Rates for Sustained Sales Growth
A lot of people believe selling is rocket science, something they couldn’t possibly do. If you’ve been reading my blog for a while, you’ll already know that I think that’s nonsense. Anyone can sell; it’s really only having a conversation with purpose. But once you’ve got your sales mojo, how do you reach for the sky? For sustained sales growth?
YOU have an Impact on Four Parts of the Sales Process
There are four components to the sales process that you can directly impact: your conversion rate, the volume of sales, the average sale value, and the length of the sales cycle. This post about improving sales conversion rates is the first in the four-part Sales Growth Series.
Interestingly, if you talk conversion rates with anyone in the marketing/sales-o-sphere, you’ll soon discover that most people are referring to online mini-conversions like email or webinar signups, white paper downloads or perhaps an online product sale. It’s almost exclusively online, web-based conversion.
What are Sales Conversion Rates?
When I talk about sales conversion rates, I mean the number of sales made from actual conversations with people. The kind where someone might fill in a form online as a mini-conversion along the entire sales process, but eventually has a phone conversation with you, and most likely a face to face meeting too.
The mini-conversions are important milestones in the sales process, but the important thing to remember is that many cannot be influenced directly by you and your sales skills. And your skills are what can have the biggest impact on improving your sales conversion rates.
What is Your Sales Conversion Rate?
You’ll need to have a benchmark to measure against. Doing research will quickly leave you frustrated and defeated because everyone measures conversion rates differently and they range wildly. Suddenly looking at your intuited conversion rates compared with those touted by purveyors of SEO services, web design services, inbound marketing services etc. etc. becomes a confidence sucking exercise.
Define Your Own Conversion Rate Standards
Here’s what you need to do. Define your own conversion rate standards. Both in terms of what you are measuring and what you feel are appropriate levels to target. Once you get started, you’ll find that you intuitively have a pretty good feel for what is the right level for your business.
The basic formula for calculating sales conversion rates is fairly simple:
# of sales/ # of leads x 100
If you made 3 sales from 10 sales conversations, your conversion rate is 3/10 x 100 = 30%.
I like to define leads in this scenario as ‘sales conversations’. Because raw leads need to move through a sales funnel before they become opportunities and you rarely have the ability to directly impact the eventual outcome. That’s marketing. And another blog post entirely.
Most conversion rates you see quoted are determined using the total number of leads generated by all marketing activity and the eventual number of sales, generally resulting in conversion rates of less than 4%. I’m going to argue that you need to be measuring both this total sales funnel conversion rate (and other mini-conversion rates along the way to determine the ROI of your marketing) AND your sales conversation conversion rate.
Increasing Your Sales Conversation Conversion Rate
Here’s where those of you who have embraced the mindset that selling is really about helping a customer solve a problem will rise to the top. Because this is where your ‘selling’ (listening and questioning) skills make the difference between a mediocre conversion rate and a very good conversion rate.
When you’ve honed your questioning technique to be able to really understand the issues that your prospective clients are facing, and to uncover the REAL objections behind the stated objections, you’ll find that your conversion rate will start to rise. And then you’ll need a new benchmark to measure against!
It’s all About the Questions
Remember: these are the compelling questions that make your prospect think in terms of her needs, but answer in terms of your needs as a solution provider. And when objections are thrown up, you’ll need to be able to continue your thoughtful questioning to get to the heart of the real objection.
My favorite open-ended example: What is one thing you would improve about . . .
But I also firmly believe that if you’ve done your initial qualifying questioning properly and you’ve managed the sales conversation well by listening deeply and continuing to ask compelling questions, you shouldn’t find many objections being raised.
What About Those Mini-Conversions?
We keep talking about the sales funnel and the mini-conversions along the entire sales process. That’s because they’re crucial to supporting your efforts to improve your sales conversion rates. You can be a tip-top sales person, but you won’t be able to sustain sales growth if you don’t have a continual flow of new and qualified leads. Sure, you can go out and find your own raw leads, but that’s time consuming and you’re better off putting your excellent sales skills to use actually bringing in the money.
A good sales person is supported by good marketing. Marketing that increases awareness of the product, that captures and engages potential clients, and that provides the volume of leads needed for a trained salesperson to convert at the rate established as optimum for your organization.
Follow Up Validates Your Efforts
Now don’t forget to follow up with all your thoroughly and thoughtfully questioned prospects. Another critical component to increasing conversion rates is to have a follow up system in place. You’d be amazed at how many good sales people stumble at this hurdle! These fun folks at The Content Bistro discovered this themselves by conducting a little experiment and improving their conversion rate by 30%!
You can read more in-depth about the math of conversion and some more support for my arguments in this great article: 5 Tips to Improve Your B2B Sales Conversion Rate.
And then stick around! In the next three posts I’ll cover the other three elements that you can directly impact to improve your overall sales success: the volume of sales, the average sale value, and the length of the sales cycle.