5 Tips to Optimize Your Sales Funnel and Avoid Stagnant Revenue

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For business owners, it’s not uncommon for stagnant levels of revenue generation to creep up on you. Most often, this is because of a problem with one or more stages of the sales funnel.

Unfortunately, it typically takes one to three months to realize that your revenue is stagnant. By the time you become aware of flat revenue and start addressing your sales funnel, another quarter has gone by. It may even be that you realize there’s a problem halfway through the year, and it’s too late to fix it.

By not identifying problems with your sales funnel early, you risk setting the stage for an entire fiscal year of flat revenue. So, what can you do to prevent this?

Top 5 Tips for Addressing Stagnant Revenue from a Fractional VP Sales

To avoid a long stretch of stagnant revenue, it’s crucial to put in tangible fixes on time and at the right time. Here’s how you do that.

1.      Assess Your Revenue Generation Levels Monthly

To address a problem, you must understand what it is. By looking carefully at your numbers each month, you can identify flat revenue and then ask yourself what the reason behind it may be. You need to dig deep and search for the “why” behind the “what”.

Consider three different levels to find out why your revenue is flat:

  • Are you not getting enough deals into the top of your sales funnel?
  • Are the leads in the middle of your sales funnel not moving to closing fast enough?
  • Are you not closing enough of the later-stage leads at the bottom of your sales funnel?

Once you’ve identified which of these (or which combination of these) is the problem, you can do something about it.

2.     Fix the Top of the Sales Funnel

You may find that you’re not getting enough prospects into the top of your sales funnel. If this is the case, you need to assess how your sales team is doing with business development and ensure they are addressing the correct customer profile to increase their likelihood of finding prospects who are a good fit.

To determine whether your sales teams are doing enough outreach, you need to examine your activity-based metrics. If you don’t have any, there’s your first problem! If you do have them, are they at the right level? If you have goals for business development, determine whether your team is hitting them and consider whether the goals are the right ones.

3.     Fix the Middle of the Sales Funnel

If you’ve determined that the main reason behind stagnant revenue is a clog in the middle of your sales funnel, then you know you’re dealing with a lack of sales velocity. In other words, your deals are taking too long to close (and note that “too long” here depends on your product in your particular industry and market).

Once you’ve determined that your sales are taking too long to close, you need to drill down one level deeper and ask your sales team why – they have the answers. Next, you need to examine the reasons they identified and figure out which of those you can control or influence so that you can improve your process and nudge your deals forward.

4.     Fix the Bottom of the Sales Funnel

If your sales team is not closing enough, it’s a sign that something is amiss in the process that precedes asking for the sale. Again, speaking with your sales team should give you the valuable insight you need to course correct.

Walk through the sales process with your team and double-check how effectively and efficiently they are executing those steps. If they are ineffective or inefficient on some of those steps, you know where to make improvements.

5.     Map Out Your Sales and Business Development Processes

As you’ve seen from tips 1 through 4, it’s crucial to have your sales and business development processes mapped out so that you can easily assess where things are going off the rails. If you don’t have your processes clearly mapped out, then you can’t do any of the preceding steps.

This involves sitting down with your team and asking them exactly how they go about moving a customer from being a prospect to being a paying customer, writing it all down, and then determining how you can make the process more efficient and effective.

This comes full circle right back to the first tip, which is to assess your teams’ performance and processes regularly. That way you’ll identify where the problems are, put the fixes in place, and deal with stagnant revenue effectively.

What If These Fixes Don’t Improve Your Revenue?

If you assess your revenue every month, make fixes, and then reassess at the end of the quarter to see how effective your fixes were at getting your sales unstuck, you should be able to make up ground on declining or stagnant sales. Then all you need to do is continue with this cycle and optimize.

If, however, you find that none of the fixes worked, it could be that you don’t have a sales problem. You may have a product problem, meaning it’s the wrong product fit for the market or customer. Or, you may have a service delivery issue in which you’re not meeting client expectations, preventing them from coming back to buy from you a second time.

In my role as a Fractional VP Sales with a manufacturing client, I’ve optimized a client’s sales process to be effective and efficient only to find that production couldn’t keep up with sales. Interestingly, in this case, sales were a part of the fix because the way they were communicating with production was insufficient to have production be successful and meet demand. Internal collaboration turned out to be the fix, but if we hadn’t optimized the sales process first, we wouldn’t have identified this issue.

The bottom line is that in sales the opportunity cost of time is very high. If your salespeople squander their time doing the wrong things, they won’t have enough time to do the right things, and your revenue will suffer. By following the steps above, you can ensure your sales team is effectively and efficiently executing each step of the sales process so that you can make the fixes necessary to keep your revenue growing. Get in touch with me if you’d like to discuss this further.

How to Retain Your Top Sales Performers

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As a business owner, retaining your top salespeople is important for consistently hitting your sales targets. After all, recruiting is a costly and time-consuming process, and when you hire someone, you want them to stick around for the long haul to minimize disruptions to productivity.

As a Fractional VP Sales, I’ve seen how common it is for the resumes of salespeople to show a pattern of job jumping. So, how can you ensure that you hold on to your top salespeople? If you’ve ever had salespeople jump ship and found yourself wondering why, or if you simply want to avoid this from happening in the future, keep reading.

How to Find the Right Management Mix to Keep Top Performers

Retaining your top talent needs to be a purposeful exercise, and you shouldn’t manage all people in the same way. If you try to take a one-size-fits-all approach to management, there are going to be people who don’t respond well and often they will speak with their feet by walking out the door. Here are four ways to ensure you’re finding the right balance to keep your top performers motivated.

1.     It All Starts With Your Company Values

To address employee retention, you first need to have a clear understanding of your company’s fundamental values and principles. A strong values-based management foundation is the toolset from which you, as the business owner, and your managers can draw from to help manage your employees.

It’s worth noting that it’s not a matter of completely different management styles for different employees. The magic lies in the nuance of how you apply your company values and principles to manage and lead your people from day to day.

2.     Recognize That Top Performers are Always Different

In any team, you have top performers, middle performers, and some at the bottom of the pack. Whatever makes your top performers different from the rest of your staff is typically what makes them successful in their roles. These differences are precisely the reason you need to take a different management approach with them than with other staff.

Understanding exactly how top performers are different will help managers and other leaders figure out which leadership style or approach to take to keep them motivated, and ultimately, loyal to your business.

3.     Understand What Motivates Your Top Performers

Different people are motivated by different things – that’s as true in business as it is in life. Top performers often value different things than your lowest performers. That’s why if you want to hold on to them, you need to be able to recognize what your top performers are motivated by, and to what degree.

When it comes to sales success, top performers are typically more motivated by money. If you set up a compensation plan that does not richly reward those who are motivated by money, they will go elsewhere to find a plan that does. For people motivated by money, financial incentives like commissions are important.

Another trait typical of top performers is a high degree of initiative. Top performers who value freedom and independence will not respond well to micromanaging. If you try to make them always stick to rules, they are likely to feel restricted and leave.

Similarly, you need to consider whether your top performers are motivated by teamwork before setting team-based sales goals. A top performer who is a team player and feeds off team motivation may prefer this, but someone who is more of a lone wolf motivated by independence won’t want their performance tied to someone else’s. If a top seller who prefers to work alone has their income tied to something they can’t control, they’ll leave.

4.     Inventory the Traits and Characteristics Needed for Success

Just like there’s no one-size-fits-all solution for how to manage top performers, there is no blanket solution for retaining talent across industries. As a business owner, a manager, or another leader, it’s necessary to inventory the traits and characteristics needed when it comes to success in sales for your industry, with your products or services, and in your market.

Then, you need to provide those motivators for your top performers to keep them happy so that they can be as successful as they want to be. This may involve doing it in a slightly different way for different salespeople – as mentioned above, the magic is in the nuance of the day-to-day application of your values to how you manage your people.

After reading this, the steps for holding on to your high-achieving staff may seem fairly obvious. Yet, the loss of key talent is something I see business owners struggling with all the time in my role as a Fractional VP Sales. Maintaining a stable, productive team depends on your ability as a leader to identify, understand, and apply different motivators in your management of top performers.

Once you can successfully do so, you’ll not only be able to hit sales targets and reduce staff turnover but also create a more appealing environment for recruiting new hires. I’ve given you a lot of ideas here, and there are a lot of layers to consider. I’d be happy to help you think through how to apply these tips to keep your top performers. Contact me today to start a conversation.

 

Ways to Eliminate Over Promising by Sales Reps

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You’ve probably personally experienced the pain and frustration that results when your Sales team over promises to a customer. Nobody’s happy – especially the customer – and you are left to unravel the mess.  Luckily, there is a simple way to short-circuit such confounding situations.  Given that revenue generation is a team sport, ramp up your communication between team members.

When consulting in my role as a Fractional VP Sales, I find that companies facing over promising challenges always have poor communication between Sales and the departments responsible to deliver on those promises. 

When there is such disconnection, incorrect assumptions, misinformation and lack of mindful forethought results. It’s up to leadership to lay the groundwork for regular and open dialogue between departments as staff are often hesitant or feel it is not their place to do so.  Taking this approach institutionalizes interdepartmental communication and makes it “the way things we do things around here”.

Reaching Out

I recommend that Sales take the lead in initiating outbound communication between themselves and other departments. As they are immediately customer facing, the more timely and accurate their delivery capacity information the better positioned they will be to make appropriate commitments to buyers.

The simplest way to make connections with other departments is to have a representative from the Sales department sit in on their meetings. The frequency with which this should happen is entirely dependent upon your business. If you are in a fast moving industry where things change rapidly, maybe meeting weekly makes sense. If your industry moves slowly perhaps a monthly cadence would suffice.

Context

The presence of Sales in another departments’ meeting must be endorsed by the leaders of each department. They should position with their team why Sales is sitting in and the outcomes both departments desire. Without this context the presence of a Salesperson in an engineering meeting may be seen as weird.

Give to Get

Have the seller arrive at the meeting prepared to share Sales related happenings or voice of the customer feedback that is relevant to the rest of the people in the room. Giving in this manner sets the stage for the seller to ask questions about what the department in question is working on & challenged with. It also sets the stage for them to be happily invited back to the next meeting.

How Sales positions the information they’re sharing affects how it’s received. If it’s positioned as “Sales can’t sell if you folks don’t do this stuff for us!” it will of course be received poorly. If it’s positioned as “here’s what we’re seeing in the market and here’s what customers are saying – what do you make of it?” it invites dialogue and problem solving, both of which are healthy.

Send the Invitation

Now it’s Sales’ turn to extend the invitation to other departments to attend their meetings. Be strategic and invite the right department at the right time. Be prepared with questions to ask and input to provide so that all parties leave the meeting having moved the ball forward.

Such regular interactive communication between Sales and production, engineering, customer success, finance [and any other department that has a stake in finding-securing-retaining happy paying customers] significantly decreases the incidence of Sales overpromising. When they understand the needs and challenges faced by their colleagues they’re better positioned to be appropriate with what they commit to with customers.

As always, there is a great deal of nuance around how to initiate interdepartmental communication across your organization. I’d be happy to discuss this further with you.  You can reach me at [email protected]