There is one secret to sales improvement seasoned sales pros know and follow. Everyone with years of experience under their belts keep repeating this: you should increase the speed at which you work a deal. Push deals quicker through the sales pipeline. Drop the wrong prospects early. Get to NO faster. That’s the mantra.
There are three lessons to learn about sales velocity.
- How does deal velocity affect your sales?
- How to increase deal velocity?
- When to declare a deal lost?
The outcome of these lessons will teach you an important principle that has received very little attention in sales literature – without any other changes to your habits, increasing your sales velocity is the one thing that will radically improve your sales results.
That’s to say that sales velocity is something you should really learn about.
How does deal velocity affect sales?
Back in 1999 when I was selling books door-to-door, I experienced the difference that high sales velocity makes when compared to working a deal for a long time trying to to make sure it gets closed. When I arrived to training, I was given a rough guideline of spending a maximum of 20 minutes with each prospect. When you first start out, you don’t really know whether that’s a lot, very little or just right. But when you’re in the middle of a sales conversation with your prospect showing signs of interest and all but reaching for his/her wallet, you’re inclined to continue with your efforts, because it seems you’re so near to closing. Chances are, however, that after a while, you’re not any nearer to closing than you were at the 20 minute mark.
It happened to me more times than I care to admit – I did everything I could to sell the books to my prospects and I kept the “best” conversations going far beyond the 20 minutes, reaching 40 minutes at times. At the end of every single conversation lasting more than 20-25 minutes, I was told something like “Thank you, it’s been lovely chatting with you. Gotta go now, I have to pick up my kids.”
Pardon? Are you telling me that I just spent 45 minutes so you could tell me “good luck”? I was furious. But I wasn’t angry at my prospects – I was incredibly mad at myself. How could I be so stupid and spend over twice as much time as I should have? I could already be speaking to the third prospect in line, yet I haven’t even made it to the second.
What I learned over that summer was that in that business you should either close the deal within those 20 minutes (during your normal sales cycle) or walk away. If your prospect is interested, you’ll get to close the deal within the time frame. If not, you’ll still have time to speak to someone else who might be interested.
In general, by decreasing the time spent per deal, you’re able to put more deals through your sales pipeline over the same amount of time. If you keep your conversion rate the same, your paycheck will see a significant increase.
Craig Rosenberg, a consultant who blogs on sales and marketing at funnelholic backs up the speed factor in his guest article at Heinz Marketing. He tells that “time is your enemy”, and that of all the people, it’s your prospect who expects you to move fast the most. Perhaps the wittiest angle on rejection is given by Andrea Waltz, who has said that ‘“No” is what ultimately gets you to your destination of YES’ – so don’t be afraid of going for “No”.
How to increase deal velocity?
There are two parts to increasing your deal velocity – the speed at which a deal goes through your pipeline. These are:
- Learning the buying process of your prospect companies
- Removing the common tendency “to think about it”
It’s difficult to speed up a process if you don’t even know its current pace. The best way of finding out the buying process of your prospect company is simple – you ask about it. At each stage of the cycle, you should ask your prospect what’s required for moving forward with the deal.
Reducing the tendency to think about it is really a lesson on how to reduce decision time. Pushiness is a feared trait by many salespeople. However, applying gentle pressure is something that speeds up the process, and often leads to an immediate response. When you’re on the receiving end of the line of “Let me think about it”, simply respond with something like,
- “Great, what would you like to think about? Maybe I can give you some additional information to help with the process.”, or
- “Great! I want to make sure you can take the next step. What do you want to give some thought to specifically? I want to know whether it’s best to stand by, or if there’s something I can help you with in the process.”
There are many good tips on conversational techniques, helping you stop the waiting game. One good technique on sales tie-downs is described by Harvey Mackay in his article “2 Little Words to Close More Sales”, which is well worth a read. Of course, none of the techniques work without the proper intention, and tone – all that take practice.
In a way, there’s also a third part to increasing sales velocity – knowing when to walk away. This is a unique discussion in sales, as the different ways in which you can mark a deal lost are rarely discussed. Declaring a deal lost early will let you move onto the next prospect as quickly as possible. Had I known about the two ways of marking a deal lost at the beginning of my sales career, I would have been able to sell far more books, or other products and services than I ever did.
When to declare a deal lost?
The two ways of declaring a deal lost are straightforward:
You’ve presented an offer to your prospect, but they tell you they’re not interested – you ask for the reasons, and realize they either don’t need or want your solution. You mark a deal lost, because your prospect tells you that this deal is over.
You decide that you’re not going to deal with this company at the moment, because you understand that selling a solution your prospect is currently unfeasible. Even if they indicate that they might be interested in coming back to the deal sometime in the future, you shouldn’t keep the deal in your pipeline, as the deal’s currently dead. You mark a deal lost, because you tell that the deal is over.
The distinction of a deal and a company is something that many salespeople seem to confuse when they about the sales pipeline. You can always come back to a company and initiate a new deal – walking away from a current deal will not take away that opportunity in the future.
Marketing agencies, especially young ones, are often faced with a similar set of problems regarding sales velocity. On the one hand, they need to sell their services by pitching, and until they’re told they’ve lost the pitch or that their services are not needed, a deal is seemingly alive and well. On the other hand, however, when agencies go pitching to a company in June and they’re told to come back in January when budgets are being put together, then the timeline becomes too long to be part of a normal sales cycle. It’s not a natural deal lifetime and the deal itself should be discarded. This doesn’t mean that they shouldn’t go back in January – quite the contrary actually, they should get back to this slightly before that time. But they should consider it as a completely new deal and opportunity.
Pro Tip: create an opportunity backlog pipeline, in which you hold all of the good ideas you have with certain contacts, but can’t realize at present for one reason or another. By doing this, you’ll have, firstly, a healthy sales pipeline, and secondly, a decent backlog of ideas to fall back on, when you’re suddenly in a position of requiring new leads.
Step on the gas
There are hundreds of different sales tips you could follow. But if there’s one thing that will make a significant difference to your sales results and commission, regardless of the industry served or geographical location, it’s figuring out how to increase your sales pipeline velocity.