I had 2 board meetings last week, and it seemed that we spent a fair amount of time digging into each company’s sales process, understanding and mapping out each phase of the sales cycle from sales lead to to actual installed customer. Many times one can focus too narrowly and only look at a sales pipeline or customer conversion rate and spend too much time talking about the numbers – did we make or miss our quarter and did we grow our sales pipeline and by how much. While those are always imperative to look at, it is also important to dig beneath the surface and understand how you got from Point A to Point B and deconstruct each step of the sales process, figuring out the time and resources it takes to move each prospect through the sales cycle and get them to become a customer. As one of our marketing consultants, RIchard Currier, once said, one must look for the Big Boulders in the sales cycle, the point in the funnel where things seem to take too long or cost too much, and put programs in place to move them. Once you map and understand what it takes to convert a lead to a go/no go decision, it will become quite apparent where you and your company will need to focus its efforts to maximize sales and marketing efficiency, move the boulders, and minimize sales friction.
For example, in one portfolio company, as we dug deeper into the sales funnel, we clearly saw that there were two distinct types of customers – one with a very short sales cycle with more do it yourself implementation and another set with a longer sales cycle. The natural question you have to ask yourself is how do I put programs in place to reach the first group of sales prospects to increase my efficiency. One other huge boulder we found was that sales pilots were taking too long to get started. As we dissected the problem, we discovered that a large portion of this time sink was because it took too long for a customer to get the required hardware to run a pilot. In order to reduce the friction, we brought in our own appliances to minimize the time to pilot and also mapped out a plan to run sales pilots in an on-demand fashion with no installation onsite at all.
In another company, the boulders that we discussed were less a sales targeting issue but more of an implementation issue. While we had a great distribution deal with a partner, the conversion rates were not as high as we liked. To move this boulder, we spent plenty of time discussing how we could get our customers to use our service with as little friction as possible – in other words, how to get a customer using our service with 1-2 clicks instead of 5 – 6. This may sound trivial but trust me it is not. Reducing the barrier to usage can make the diifference between a huge win or a mediocre effort. This applies in both the enterprise and consumer world. Once again, it is quite important to deconstruct your sales cycle and look for those huge boulders and put programs in place to move them to create a more streamlined process.