The #3 Sales Challenge – Low Win Rates. Every time you commit money, resources and effort into a deal you lose it drains your profits and your morale. If you only win one deal in 4 or 5 the ones you lose cost you a lot. In this interview with John Smibert our CEO, John Bedwany identifies the two factors that contribute towards low win rates and discusses what to do about them.
John S.: Hello, I’m delighted to have John Bedwany with me again – welcome back, John!
John B.: Hi, John!
John S.: I’m loving this series of interviews, John, and we’re up to your challenge number three for the B2B sales world, and that’s win rates – and I sympathise with this. A lot of organisations really struggle; they’ve got pipeline and the pipeline’s like this, and it gets to the point where you put a lot in at the top and very few come out the bottom. It means a big waste, doesn’t it?
John B.: Correct. Again, based on research we’ve done, and if you look at the way all organisations are structured from a pipeline perspective, pipelines are usually 300% of quota, sometimes it’s 500% of quota.
John S.: So you’re talking three-to-one close rate or five-to-one close rate from top to bottom of the pipeline.
John B.: Absolutely, absolutely. Now, what that actually translates to is we’re getting one in every three, that’s 33%. Now, John, let me ask you a question. When was the last time you went to university, got 33 out of 100 and passed?
John B.: We have got to get over ourselves. The profession is failing by definition, and we call it successful. We’re burning time, we’re burning money and we’re burning breadths of humanity. So, we have to understand why this happens.
John S.: And why does it happen?
John B.: Well, if you really look at the engagement, the reason why you lose deals is because of two things. One is that you have no relationship, and two is you don’t understand the needs of the market.
John S.: And there’s a third one, when the customer doesn’t make a decision after you invest an enormous amount of time.
John B.: Take that out of the equation and we’re still at three-to-one, so they are really the big two. So, the answer’s got to always be that by the time the customer is ready to purchase, they must trust you. The issue we’ve got is this. When you look at any type of demand generation programme, it’s stop-start. “If you’re in the marketplace, I’m all over you; if you’re not, I’m going to forget about you.” There aren’t a lot of strategic nurture programmes in the marketplace. Digital plays a part, but it’s not humanistic and it’s not strategic with the decision makers. How do you build trust with these people, so when they’re ready to buy they trust you?
John S.: That’s a good question. We’ve all been grappling with it for a long, long time, and we’ve got competitors and all sorts of things that impact that. You’re not saying we can ever get to a one-to-one.
John B.: No, of course not. Let’s get to a one-to-two at least.
John S.: Okay, and one-to-two in most organisations would drive significant, 10, 20, 30 percent increase in productivity and ultimately in sales, with the same level of investment you’ve currently got.
John B.: Correct. Or you can reduce your investment and get a better outcome.
John S.: That sounds like a brilliant strategy.
John B.: And I think, John, the issue we’ve all got is we invest money with those ready to buy. We need to start to invest money with those that aren’t yet ready to buy. Digital does play a part, but the humanistic touch is very, very important. At the end of the day, in the B2B space people need to be talking to people that know more than they do, and they need to consistently be heard and be given permission to educate, and when you educate them enough they then trust you before the sale is actually due.
John S.: But you’re saying don’t use the salesperson to do that.
John B.: Absolutely not.
John S.: So, are you saying use call centres or…
John B.: Lecturers to the industry is the best way. Get ex-senior salespeople that have been doing this for a living for a long time, and get them in a situation where they’re able to have these conversations via voice and via digital and via the Internet to have these relationships.
John S.: In a strategic way, as you learn and understand where the buyer is in their current thinking.
John B.: Absolutely, and then make sure the cause the calls are contextual. So that means if I’m going to call you again in 90 days’ time, I can press a button via the cloud, I can see everything we’ve done with you over a period of time, so next time we speak is a continuation of the last time we spoke.
John S.: And the net result, as they go through the buying process, is that we haven’t got an expensive salesperson up there doing face-to-face selling or generation of opportunity until they’re ready to actually be productive in that role, and therefore you’re going to get much higher level of productivity.
John B.: Exactly. Think of it like a doctor-specialist situation. You go to a doctor to get the diagnostics of what’s wrong with you; once he or she’s worked out what’s wrong with you, he takes you to a specialist. We are the doctor – strategy – and then the specialists are the salespeople and their solution architects, etc.
John S.: Okay, I’ve got it. So the bottom line is we’ve really got to get that one-in-three, one-in-four, one-in-five close rate we’re averaging through a pipeline down considerably to get the productivity going. Otherwise we’re all failing and we all feel like we’re failures when we’re losing two out of three.
John B.: Correct. And add to that, everything’s moving to the cloud, which means that every deal size is a lot smaller.
John S.: Yes.
John B.: You have to reduce your cost of coverage and you have to be more relevant to the marketplace you’re speaking with.
John S.: Okay. Some really good points there, and over the following interviews we’re going to learn more and more about how we address some of this.
John B.: Fantastic – thank you!
John S.: Thanks, John!