Lagging to leading sales
"I want to unpick some of your thinking, a part of your logic is flawed".
These were the helpful words from a long-term friend and mentor that really struck home and gave a glimmer of hope into a new reality.
Much of my time recently has been invested in sales and I’ve had a lot of energy for it. This was until traction appeared slow and the lack-lustre nature of the 2022/2023 market sucked a lot of oxygen from the tank. I knew it wasn’t just me as a lot of clients had been experiencing it too, but I didn’t want to suffer it.
The feeling of putting a lot of effort in and having little to show for it is tough and demotivating, especially if you’re someone that derives significant value from achievement.
I knew we’d put the groundwork in. We had a solid sales plan, the thinking has been done, and we were executing. It’s a numbers game and for us there are four paths to sales:
- Inbound – The client finds you
- Outbound – You find them
- Referral – They come through someone
- Repeat – They are already working with you
Each of these paths requires a different set of resources to move the needle but they all need the same question to be answered: where are you meeting your prospects?
- It may seem blindingly obvious but to engage with prospects, you need to meet them – to place yourself in their space. To scratch the surface of these four…
- Inbound sales are gained through doing or creating something so prospects can find you. This may be advertising on a billboard, creating a YouTube series, having a podcast, or using PPC. Whatever it is, you need to invest for a sustained period in a consistent direction to drive meaningful traction.
- Outbound sales are driven through rigorous due-diligence and action. The more you can pre-qualify, do your homework, understand the prospects world, pain-points and opportunities, and align your value proposition to this, the more likely you are to resonate with them.
- Referral sales usually come in two ways. The ones that land from no-where, these are warmly received and flattering but unpredictable, and the ones that are created through you specifically asking someone for a connection to a person or business.
- Repeat sales are won through staying ahead of a customer’s needs, having a track record of great results and representing significant continued value to the people and organisation. Building yourself into the next year’s budget and having multiple contacts and advocates inside the business is key.
All of which require empathy and authority, and a whole host of other hard work and insight and there are multiple books, courses and podcasts that focus on the nuances.
We find that many companies we work with aren’t clear on their paths to sales, the value they’re looking to drive from them, and the the actions they’re going to take to move the needle. But we were confident in our plan. It was clear and now it was about execution.
Targets and traction
It’s no secret, there are companies that we’d love to work with, that we’re not working with yet. Most businesses are in this position, and to even win one, or two of these would be a result worth celebrating. For us, we were going to get these through outbound activity. However traction seemed frustratingly slow. 15% conversion on requests to call. For a business that coaches and teaches on sales, it wasn’t a great feeling.
My mentor with the wise words is VP of Sales, he had recently scaled a sales team and been a core part of his company going through an IPO. I talked him through our approach, pipeline, stats and insight. My summary was short: the pipeline was moving more slowly so we needed more volume.
This was when he started to unpick my thinking. I had been looking to lagging indicators to validate my activity. 3-months into a 9-month sales cycle and you’re not going to have a ton of validation. And I didn’t have the indicators I needed.
Getting the full picture
We typically look at a total pipeline value and a weighted value. So if you have two prospects in at £50k at 50% chance, your total pipeline value is £100k but your weighted value is £50k. It’s the latter that had been the most helpful number to this point. My mentor helped me to shift gears from lagging indicators, to leading indicators. The things that would give us clarity and confidence now. He shared three data-points we should be eyeballing:
- Average deal size
- Average sales cycle
- Average win rate
It wasn’t a question of driving volume as this actually increases workload and can lead to significant operational inefficiency. It’s much better to focus on decreasing the sales cycle and increasing the average win rate.
By looking at these numbers for pipeline health, not only does it drive the correct action, but it also provides a better feedback mechanism than a 9-month wait. Where this pipeline and data is built doesn’t have to be sophisticated, Excel or Sheets will do. It can be easy to think that it’s the tool that’s the problem – swapping for something like Hubspot or Monday or Keap – but it can act as a distraction. Sure, they’re awesome tools, but they’re not right for every business and a switch alone won’t push you forward.
It also got me thinking if there are other leading and lagging indicators, both professionally and personally that I may need to re-assess. Ultimately this is about having the feedback loops that are appropriate to drive the right action. By having these the by-product is an increase in energy, momentum, and fulfilment, and most significantly, results.