As a business owner or CEO, you may look at end-of-month numbers sometimes with frustration. You had planned and forecasted to achieve a revenue target that you thought was reasonable but when the final numbers came in, they were lower than planned.
At times like these, it’s easy to pick up the phone and hold your sales team or others in the business to account. But in many cases, they will be at a loss to explain the poor results as well. They are also likely to try and find excuses as to why it didn’t happen than look in the mirror and see what they could have done better (this is not always the case, but more often than not, it is).
The key factor here is that you don’t want to let emotions get in the way of actually solving the problem. You just need to become INFORMED so that you can take the action you need to change the result for the next month.
So how do you solve the issue?
Review your numbers and Sales Process is the answer.
The clues are always hidden somewhere within the puzzle.
Sales is all about the process and working out the weak link in the chain. When I ran my online software business, we knew there were around 5 steps in the process. This ranged from a potential customer finding out about us to buying from us. The steps were
- They had to find our website first
- Then click on our signup page
- Then complete or interact with the trial
- Then start adding data and users
- Then complete the purchase at the end of the trial.
There were other parts of the journey but we knew these 5 steps were the key ones to us bringing new business on board and so we became obsessed with measuring information at each point.
At the end, we knew what the conversion rate was between each stage and we then set about making improvements at different points in the process to achieve the results we wanted.
We knew that if we had 500 people who got to our software per month and we only got 25% of them to complete a trial, we lost out on 375 people per month! By making some adjustments to this part of the process, we could move our conversion % up to 30%, which meant an additional 25 people per month coming through to the next stage. By improving our numbers at each stage, we knew that the END RESULT NUMBER which was the one we all wanted to see change would.
So if you want to know WHY you haven’t achieved the Top Line numbers that you wanted to, then start digging into the smaller numbers within the process to find out where the problems are.
And if you don’t know what your process is, or don’t have one in place, then change it! You wouldn’t cross a 6 lane motorway in one go or ask someone to marry you after the first date. Every buyer goes through a buying process and journey, and your job is to ensure you understand this journey.
Have a look in your business (or ask your sales team) these questions:
- How many potential leads are you putting in at the top of the funnel each month?
- What happens when a prospect engages with us?
- How quickly do you respond?
- How many move from this initial interest stage to having a conversation with you?
- How many move from this stage to maybe having a meeting?
- What causes the ones who don’t have a meeting to say no?
- When you have a meeting, how many do you then create a proposal for?
- What goes into your proposal and how much time is spent on this?
These and other questions are critical if you want to find out why the top-line number isn’t where you want it to be. The Devil is ALWAYS in the detail.
Good companies implement sales processes which look to ‘’predict’ what may happen within the buyer journey and then put in place actions to alter this.
The process will say ‘If I want to hit that £300,000 target, then I need to ensure I have enough people at each stage to make that number a certainty rather than a hope”.
Remember, not every prospect we engage with will be a fit for us and become a customer. We all like to think it would happen, but it simply doesn’t
The process is the nitty gritty of sales, but the very best companies know that by doing this properly, and then measuring what happens at each point, they can make adjustments to get better results.
If you have looked at your numbers recently and found them to be lower than you wanted (or needed), then, as the senior leader or CEO, add value. Don’t just demand new things. Share insights with your team that can help them get to the answers.
Focusing on understanding the numbers behind the process and then improving them month-on-month. Very soon those targets which looked like a for-long hope will stand a good chance of becoming a reality!