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.