Welcome to Advisory Board, a weekly department in which a panel of experts—made up of entrepreneurs and professionals—answer questions you have about how to run your business better.
This week, a reader asks:
“My company’s prospect pipeline is full, and my small sales team seems to spend all their time on the phones talking to potential clients. But when it comes time to do the deal, not many prospects sign on the dotted line. How can we get better at closing?”
Here’s what the experts have to say.
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“Generally speaking, when your prospects are not being converted to orders, it is usually one of two things (or a combination of both). It is either an issue of prospect qualification or an issue of closing skills. An issue of prospect qualification means the prospects are not as ready to sign on the dotted line as they were portrayed by your sales staff. Readiness’ to order is generally defined by two factors: IF and WHEN. Is there a compelling reason or event that will make this prospect order from us, and by when? An issue of closing skills means your sales people are not asking the right questions, not reading the signals, and simply not setting the right win-win premise that will compel these prospects to proceed to the ordering phase. The cause is usually a lack of confidence or simply because they are using an outdated approach in a new buyer’s world. Closing should never be a hostile battle but rather a natural next step and conclusion to everything that ensued throughout the sales cycle.”
—Amato De Civita, co-president, JTX Inc., Toronto
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“The best thing is to examine each step in your sales process to identify where it breaks down. Your sales funnel is wide at the top but very constricted at the bottom, and that means at least one major blockage. Possibilities include poor targeting, untested offers, and sales people who just don’t know how to close. If you can pinpoint the blockage you should be able to remedy it with the help of an expert.”
—Randall Litchfield, CEO, Inbox Marketer Corp., Guelph, Ont.
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“Soliciting feedback from clients allows you to pivot your product or service offerings to better meet the needs of the demographic you are trying to service. This doesn’t need to be as expensive or complex as engaging a market research firm. Having a simple process in place in which your sales team follows up with unclosed deals to gain perspective on the quote, proposal and overall sales process can be very effective. You can then look for common pain points, or missed opportunities amongst your target customer and implement that feedback into the overall sales channel.”
—Jennifer Maloney Adab, founder & CEO, Brix Media Co., Vancouver
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You may be better served considering a funnel’ approach. Stratify your funnel by categories; typical categories would be identified,’ contacted,’ qualified,’ pitched,’ closed,’ and maintained.’ You should have more identified leads than contacted, more contacted than qualified, and so on—thus the image of a funnel. If you have a low close rate, I would suggest that you aren’t doing a good job of qualifying prospects and may be spending valuable sales resources trying to sell to those who are simply not going to buy. Focus some effort on qualifying your prospects: Do they have buying authority? Do you have a relationship with them? Do they have a budget (an actual budget)? Do they have a timeline? How many other vendors are they talking to? Are they close or far? Of cours,e you may also have a lack of closing skills in your sales force, or your product may not be relevant or competitive but assuming the latter two are not a factor try working on lead qualification and more focussed closing efforts.”
—Charlie Reid, Charlie Reid & Associates, Kingston, Ont.
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“Getting better at closing is about developing better and deeper relationships with your prospects. If geographically possible, your sales team should get off the phone and meet with prospective customers face-to-face. And whether on the phone or in person, it is crucial to ensure that your salespeople are asking smart questions and then really listening to the answers in order to effectively understand each prospect’s specific needs and challenges.”
—John Wilson, founder and CEO, CEO Global Network, Toronto
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MORE INSIGHTS FROM OUR ADVISORY BOARD:
- How to Handle Employees with Entrepreneurial Dreams of Their Own »
- When to Follow Clients Into New Markets »
- 4 Polite Ways to Collect on an Overdue Invoice »
- When to Admit Defeat and Move On »
- How to Decide Whether to Promote from Within or Hire from Outside »
Do you have a question you’d like answered? Email us and we’ll put it to the experts. Have any advice to add to this list? Share your thoughts using the comments section below.