As a coach for professional service executives and consultants, one of more frequent concerns I hear about is the daunting challenge of continually seeking and expanding new business leads.
So it may be surprising to hear that the fastest way to boost sales and grow revenue isn’t to generate more leads. Most professionals can get a 10-20% increase just by quickly and successfully working more of the leads they already have, and increasing the close rate for proposals. The best consultants and executives have an 80 to 90 percent close rate on the proposals they submit. And it turns out the real key to their success is that they avoid the most common mistakes people make that cost them business.
Since new business is the life blood of any professional services organization, it’s critical to avoid the usual pitfalls. In this three-part blog series I outline the seven most common mistakes you may be making that are costing you deals, elongating the sales cycle, wasting your time and losing revenue; and – most importantly, what you can do to avoid them.
Mistake #1: Letting leads go “cold”
One of the first missteps is to allow the leads you have time to go cold. It turns out there is great truth to the adage ‘strike while the iron is hot.’ The time it takes to address a lead plays a significant role in whether or not you’ll close the deal. A recent article in the Harvard Business Review’s April 13, 2011 Daily Stat “In Chasing Leads an Hour Matters a Lot” highlights how quickly leads grow cold:
“Companies that try to contact potential customers within an hour of receiving queries are seven times as likely to have meaningful conversations with key decision makers as firms that try to contact prospects even an hour later.”
The trick is to be responsive to leads as quickly as possible. Make sure your lead capture system can notify you and your sales team via email as leads come in. You might also want to invest in a lead tracking tool for your website. Tools like LeadLander allow you to set up custom alerts to notify you when, for example, someone visits your site more than seven times, or when people with specific URLs visit.
Mistake #2: Failing to create urgency
The most common reasons sales conversations die is that the person selling fails to establish and maintain urgency. When closing new business it is critical for a buyer to recognize a need or pain that exists, and to connect your solution with solving it. But solving a known need is not enough. To create true urgency, you must first reveal the cost of not solving the problem or illustrate what they stand to lose if they delay implementing a solution.
For example, if I were to sell you sales training, I would have to uncover the issues that made you curious about hiring someone to provide sales training in the first place. This would be accomplished through a series of questions to uncover what’s working and not working now in your sales process, and what you think is missing in order to make your sales more effective and to grow your revenue. Then I would ask what having a more effective sales process would do for your company.
I would ask you what success looks like. You might tell me that if the sales process were successful, you would increase revenue by 25%. I would then ask how much revenue that would represent on an annual basis. You might say it would represent $1Million additional revenue a year. I might also ask what savings your business might see through training, in time, travel, and so on. Finally, I would also ask what this $1Million extra would mean to the company.
To maintain urgency throughout the sales process, it’s important to keep that now-established cost of not solving the problem in the discussion. I might say things like “So, waiting even a month leaves close to $100,000 of revenue on the table…” or “If we don’t get going soon, you’ll run out of runway to hit your revenue growth target of $1Million this year.” I may even point out as the broader business cost with a statement such as “I just want to remind you that if we don’t start this month, you risk missing the revenue goal this year, and if that happens it will be much more difficult for you to secure that next round of funding.”
The key to creating and maintaining urgency is to tie it back to the business impact that will result if they delay or do nothing.
Next post: Mistake 3: Failing to trial-balloon price in the first meeting, Mistake 4: Not talking directly with the true economic buyer
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An excellent article so far, Kate. Now I can’t wait to read part 2 and 3.
My major takeaway so far is that timing and speed are vital – and I couldn’t agree more. We all know that “the right place at the right time” is a good foundation for success — and it seems in today’s fast pace world, the right time is *now* (or at least earlier than some may think).
Many greetings from the other side of the globe! ~ Claudio