E181: Where Your Sales Process Is Leaking Money—and the Leadership Metrics That Fix It

In this episode, we are going to unpack how you as a business leader can diagnose which part of your sales process is costing you the most money. Welcome to Sales Process Made simple. The show helping seven to eight figure industry construction and trade. Sales and business leaders finally end the stress of inconsistent sales by simplifying your sales systems so your team can close more deals and grow faster. I'm your host, Ben Wright, a leader who has been building businesses and sales teams just like you for the last 20 years. In this episode, we are going to revisit the five step sales process to help you understand exactly where your business is leaking money and then have a look at the key metrics that you can use to help get you back on track. As a sales leader, I often used to ask myself the question, what's going wrong? Why aren't deals closing? Why are leads low? Why are people talking to us but then going very quiet or ghosting our team, as is a really common terminology. And I spent hours and hours and hours across each and every week and month trying to understand how we could improve our sales process without really knowing where to look. Well, thankfully the podcast today is based on two and a half decades of sales experience. Lots and lots of mistakes and errors and getting things wrong. So that has resulted in a really nice tight approach that I take and that our teams that we work with, the hundreds and hundreds of salespeople that we've worked with and business leaders that we've worked with, really unpack where their sales process is costing them the most money. So if you're in that camp, if you feel like your sales process or a step within your sales process could be costing you money, then this is a great episode to hook in, listen to and have a pen and paper ready to take some notes. So how to work out what area is costing you the most money? Across each of the five steps, I'm going to pick out a couple of areas or points of leakage that are potentially costing you money to give you some food for thought. So let's have a look at those first and then we'll have a look at some metrics that you can help use to control these a little bit better. So number one here in the lead generation stage, the number one issue that I'd be looking for is that your lead to quotation rate, so, ie, the number of leads that are coming into your business to the people that you meet with and quote is below 75%. So if you are quoting less than three out of four of the leads that come into your business, then what we have is one of two problems. Number one, we're targeting the wrong people, so we're not getting the right leads into the business, which means we're not able to quote them. That becomes a qualifying issue and we can then deep dive down into that. Number two, the second issue that it could be is we are simply not responding to our leads in the most impactful manner. This often comes down to us being too slow to get back to our customers, or when we get back to them, we're not creating enough value or excitement in that first call to justify them meeting us or giving us a chance to quote. So two areas. If your lead to quote is less than 75%, you're getting the wrong leads in or the action items, how quickly we call them and how we engage them are not strong enough within your business. So that's the first area I'd be looking at for leaky buckets and things going wrong. Second area, if we are meeting a lot of people, but we are not getting quotes out. So we're going to site, we're talking to people on the phone, we're having video calls, but we're not getting enough quotes out. Now in this instance, we should be getting quotes out to nine out of 10 customers, the very vast majority. So if we're less than this, we have a leaky bucket. When it comes to the meet and greet process. The reason this is happening, same one again, is, number one, we're not qualifying them effectively enough at the lead generation stage. So we don't have four or five key qualification criteria or questions that we ask to make sure that we're the right business for the customer and the customer's the right business for us. Right. But then we're asking those questions on site and we're not moving forward. Or number two is we are not engaging with our customers effectively enough to create value when we're on site. That is, we're not getting to site and making a good enough impression with that customer that we're the right business for them. So that's the meet and greet phase and working through these nice and quickly. Because the aim here is for you to find one or two areas where you might have that leaky bucket or have a sales process that's costing you money and then it'll give you something to focus on and improve. Number three, when it comes to the quotation stage. So what I'd be looking at here, in fact, I'd be rolling our quotation and our Close rate stages together. If we are simply not closing enough deals from when we quote them now, your industries are going to be different. But on the whole, if you are closing less than one in three, I'd say you have a leaky bucket here. I'd argue if you're closing somewhere between 30%, 1 in 3 and 50%, there's still some areas to improve. But we're going to focus today on if you are closing less than one in three. So for every 10 customers you quote, we need to be closing at least 3.3 of them. We'll round down benefited out three of those. So if we're not closing those couple of areas that we could be having issues. Number one is we are simply not fast enough to get quotes out to our customers. Number two, we haven't got really clear on what success looks like for that customer. So that is the value that we need to create for them so that we can create a quote that really matches what they need. Number three is we haven't agreed in the quotation meeting or the meet and greet part of our process exactly what we're going to do next once we've quoted our customer, when we're going to follow up, how long they want to take to make a decision, who's important and so forth. There are a myriad of other reasons on top of this, but I'd say number one is we're too slow. Number two is we don't know the value equation, what's really going to create value for our customers and aligning our quote to it. And number three is we're not aligned on exactly what's next, the next steps, what we need to do to get the deal done and who's involved. And the last piece here is around if we're winning deals but we are not getting repeat business, that is Customers are not coming back to us. Couple of reasons it could be happening here. One is we may not be in the right industry for repeat business. We're a pool builder. People are only going to build one pool and they're simply not going to do another. I'd argue here there are lots of other ways we can be getting repeat business. Maintenance referrals, in particular other houses or properties that they have. If you're in the business market and you're in the pool game finding out anything else that's important to that business, sister businesses, other needs. Often there's expansion plans and so forth. So it's generally going to be in that area where we simply haven't evolved our products to have enough to offer our customers moving forward, or we're not asking for referrals or. Or we haven't delivered well enough. Now, often as a business leader or a sales leader, a business leader is a little bit easier, but as a sales leader, we're often not able to control the delivery. However, what we can do is stay in touch with customers along the journey and find out quickly if there are issues arising. And I'd certainly encourage, be it a business leader or a sales leader, if you're in that trade, that construction, that industry type of segment is, we need to make sure that we are regularly engaging with our customers so that when things are not going quite perfectly, we find out early. And when we find out early, that allows us to fix it and deliver a really good process for our customer from then on. Cause certainly in my experience, when things go wrong, it's when businesses make the biggest judgments of those partners that they're working with. And often a problem resolved quickly can lead to a really strong future relationship. So in terms of metrics, what are the key metrics I'd be encouraging you to look at to make sure that we can be really clear where we have a leaky bucket? Well, the first one is lead to quote at least 75%. I think I've gone through that. We can certainly expand on that in future episodes. The second one is the most important, and that is the number of quotes that we're getting out per month. So I'd be looking at both the number of quotes you're getting out, but also the number of leads that turn into quotes, because we may have some targets for quotes that is 30 per month. However, we might be taking 100 leads to get those 30 out. We want to be making sure that the majority of our leads we're quoting the next one. Next metric is size of pipeline. And this is really impactful for where we're quoting and where we're closing our deals. And that's to make sure that we have a size of pipeline that's big enough to support our business moving forward. Now, there's lots of formulas we can do here. In fact, I'll do a podcast on this metric on its own. But what I'd really encourage you to do at a baseline level is take the sales you need per month that is $500,000, take your close rate, that is 1 in 3, and make sure that we are quoting at least $1.5 million per month of deals. So number one is lead to quote rate 75%. Number two is number of quotes that we're getting out per month, and in particular how many leads turn into quotes. Number three is the size of our pipeline, making sure it's big enough to sustain our business on our close rate. And number four then comes down to your actual sales. A lot of businesses actually don't monitor their sales numbers, their newly won business sales numbers on a month to month period. It's the easiest one to make sure we're measuring. And what it does help us do is by monitoring it every month and comparing to prior months, we avoid having very small changes accumulate into big changes. And what I mean here is we can very quickly see if sales are dropping off by small percentages each month from month to month to month without us as leaders suddenly getting used to just a very slow trickle of decline of our business. So most businesses have leaky buckets when it comes to sales processes. And it's really important that as a leader, a sales or business leader, that you're able to diagnose which parts of your process are costing you the most money. So I'd really encourage you to have a think about your business. What are the areas around lead generation, meet and greet, quote closing or the post sale engagement where you've got leaky buckets and then how you can measure each of those stages to make sure that you've got some early indication if it's not going well. We went through those metrics. I think the show notes will be really impactful for here. There's quite a few things, so I won't try and summarize it all together, but if I had to pick one or two, it all comes down to speed of quoting, speed of contacting our customers and engagement, making sure we're really engaging with them and we're building that relationship. And lastly, that we're qualifying customers to make sure that those that we are coming in as leads or those that we're quoting or meeting, even just meeting on site, actually align to a profile of customer that we can look after. Right? So we're qualifying our customers well. So when it comes to the thought that you're leaving with today, I'd really encourage you to challenge yourself around where you may have some holes in your process. Find one thing you can do better and adopt that 1% better every day approach, I. E. Get moving on it in the next week or delegate it out to someone in your business. Because when we can make these small changes day after day after day, it really does make a big impact. Grateful to have you here. Today. We're dropping episodes every Monday, Wednesday and Friday. That's it for today. Can't wait for the next episode. See you soon. Are you struggling to grow your monthly sales numbers? Feel like you've reached a sales ceiling, are involved in every deal, or have no real sales system in place to help you grow? And is that causing a level of worry or stress about how you can get more sales in the future? If that's you, that's exactly why we created the Sold Out Sales Teams program to help you get month on month sales sales growth with less stress. In just the first week, we will lock down your quoting process to grow sales by 25 to 30%. And that's just week one. And for the first three podcast listeners that we speak to this week, we'll offer you a bonus one on one strategy session with me to make sure you can pay off your investment even faster. Which by the way, for most businesses is only one or two extra sales to book in, click the link in our Show Notes. It's a direct calendar link so you can instantly confirm your meeting time.