What percentage of prospects that you put in at the top of your marketing funnel end up as customers?
According to some estimates, between 52% to 86% of all these prospects “leak out” even before they can be considered as a qualified sales lead. From here, the average closure rate is about 20%.
Let’s do the math.
If it costs you $20 to get someone to sign up as a prospect (by either downloading an ebook or signing up for your newsletter), then by the time you acquire one customer, you are already down by over $700.
Depending on who your clientele is, this could be anywhere between a week or a month’s worth of client work.
That’s a lot of money. By cutting down the leakage, or increasing your conversion rate, you can dramatically improve your cost per customer.
The subsequent savings from this process can either steer you towards higher marketing spend, or enable you to be more competitive in pricing; or both.
So how do you go about this? Here is a short guide.
The three elements of successful closing
There are two popular strategies to increase sales - increase outreach, and narrowing your targeting.
By increasing outreach, you are basically playing the numbers’ game - reaching out to twice as many people should technically increase your closing by also two times.
However, that does not happen many times. That’s because when you increase your outreach, you are bringing down the quality of your targeting. This increases leakage and conversion rate. So while you may still manage to close more sales, the closure rate may have dropped.
Another point to note is that you may have ended up increasing your customer acquisition costs in the process.
Increasing your targeting can be a better approach. While your CPC rates can be higher, this is more than compensated by better conversion rates. Your acquisition costs can thus come down.
In addition to these two elements, a third element exists that is not debated enough - increasing productivity with respect to sales.
Salespeople spend an incredible amount of time on things like preparing presentations, building a target list, following up, and so on. With better processes and tools in place, their time can be put to better use - talking to customers and closing more deals.
Improving your processes
It is not a secret - most salespeople have terrible work processes. They spend hours preparing their decks for a business presentation without efficient analytics mechanisms in place. For example, does script A work better than script B? Do infographics in your presentation engage more than videos? By diving deep into your presentation analytics, you can extract insights that can help you with better closing.
You can devise better processes by using the right tools for each process. Some agencies may find Slack a little too distracting - they may prefer a more Kanban-esque tool like Trello. You may also find that using a Gantt chart may help you stay in better control of your multiple outreaches.
In some agencies, multiple salespeople work on similar decks in parallel bringing the overall team productivity down. Using a content collaboration tool like Planable might help them come together to build one deck that converts better than all the rest put together. Find the right tools that increase productivity for your teams and maximize efficiency with this.
As I pointed out earlier in this article, salespeople spend a significant amount of time each day in tasks like capturing prospects lists, reaching out, following up, and so on. While it is reasonable to assume these are part of a salesperson’s daily routine, automation can free up a lot of time that can be put to use on more value-adding tasks.
One way to do this is by investing in marketing activities that bring in a steady flow of inbound leads. Not only does this free up time, but such prospects are more also better qualified than cold outreach targets and thereby convert better.
Another area to look into is automating follow ups. Modern day cold emailing tools allow users to schedule several rounds of follow up at one go. They also permit mail merging so that you can invest your time once in setting up the sequence and outreaches happen automatically.
A word of caution here - several studies show that personalization is the key to higher response rate. Therefore, the strategy mentioned above only works if you view sales as a numbers game.
If that is not what you want to do, you may also consider outsourcing outreach to third party freelancers - this way, for a small fee per month, your sales team can be freed up of significant resources that can be used in closing more deals.
Although there is no one magic bullet with respect to closing sales, the bottom line is this - prepare a detailed sales plan and stick to it in order to be able to close more sales.
What is your organization strategy? Share your tips in the comments.