Building a Predicable Revenue Sales Stack – Part III
One thing I learned from W. Edwards Deming is that in all things, be hard on processes, not people. If you want sales, you must have a sales process. If you want more sales, then improve the process. In part I of this series, I suggested filling your funnel with deals through a combination of Spears, Nets, and Seeds. This is the beginning, and deserves a lot of time and attention.
In part II of this series, I suggested that you define your sales funnel stages, the qualifying criteria assigning each deal a stage, and the process for moving deals from one stage to the next. If you execute on these two – filling the funnel with deals, and moving deals systematically towards closing – you’re on your way to success. Having done that, you’re ready for some automation.
Beware! If you haven’t got a process yet, you can’t possibly benefit from automation. Go back to parts I and II and document your funnel processes before reading on.
Sales Automation vs Salesforce Automation
Let’s use technology to improve the sales process. This means you want to get more sales with the same number of people and hours in the day. Salesforce automation often focuses on managing your salespeople and holding them accountable. This is fine for larger organizations, but in a startup, you should focus on providing tools that help your salespeople close, not managing their activities. What we’re looking for is a sales stack – a set of tools to empower people to work deals through your process to closing. Your sales stack will consist of a set of tools you use to keep track of deals, contacts, communications and next steps. The most basic would be a notebook, whiteboard, or excel spreadsheet. While these will keep you organized, they have serious limitations too numerous to list here and I urge you to move on. The most basic advance would be a collaborative version of notes, whiteboards or spreadsheets (e.g. Google Sheets), but that’s only a tiny step forward.
CRM or Customer Relationship Management software can be helpful to track deals, keep you organized and help you focus on the right deals and activities. While I recommend both Hubspot and Salesforce.com, they can be cumbersome to manage and too expensive for a startup. I’ve used ZohoCRM’s freemium version, and it’s usable, but I never fell in love. Right now I’m trying out Pipedrive, and while it’s too early for a full-on recommendation, I does look pretty interesting. One of the most interesting things about it is the free course they offer: “Predictable Revenue Pipedrive Mastery Course” here. The CRM is the principle organizing piece of technology in sales and should be mastered before layering in other tech.
Once your sales process is working and your CRM is implemented, there are a host of other sales and marketing productivity tools that you can implement to speed things up. I’m going to point to those in the next part in the series – Part IV. Before that, let’s discuss funnel metrics. How do you know if your funnel is healthy? What do you do about it if it’s not? How do you keep it healthy if it is?
To know if you’re funnel is healthy, you need some basic metrics. How many deals are in each stage? What percentage of deals from each stage will progress to the next this week? month? quarter? What’s the average deal size? How many deals must you close to reach your sales goal each week? month? quarter? If you have these metrics, you can calculate what you must do to create and maintain a healthy funnel.
Start with the goal – how many deals do I need to close to meet my sales goal? Then look at the number of deals in the funnel stage just above closing. Do I have enough deals in that stage to reach my goal, given that only a percentage of them will ever close, and only a subset of those will close in the time period? Now systematically work your way up the funnel. Do I have enough deals at the next stage up the chain to keep the process going, and so on.
A weak funnel is predictive of a future problem with sales volume, which also predicts a future cashflow problem. If your funnel is weak at some stage, the rational CEO will cut expenses. The visionary CEO will spend more on sales and marketing to correct the funnel weakness. You can be rational and visionary by knowing exactly what to cut and what to expand. Analysis of your funnel metrics is a key discipline which can determine the life or death of a startup.
When I meet a startup CEO looking for investment, one of the first things I ask about is the sales funnel and its health. If the CEO can present a coherent sales process and a healthy funnel, I know they’re raising money for expansion. If they have no sales process or weak funnel metrics, I know to wait before investing. Why? Because my investment dollars are either going to fund a poor CEO’s education and the losses that accrue while she’s learning, or the expenses of searching for a better CEO when the Board realizes the problem. Either way, I’m going to be better off waiting.
Analysis of funnel metrics gives the CEO the information needed to decide what to spend money on – filling the stages in the funnel that are weakest. Because the sales process takes time, funnel metrics and analysis lets us predict the future with some clarity and power.
This site uses Akismet to reduce spam. Learn how your comment data is processed.