Business owners and senior level executives (i.e., decision makers) who have direct profit and loss (P&L) responsibility focus on three things:
- Business growth—increasing top-line revenue
- Scaling or reducing expenses—operational efficiencies
- Increasing profitability—growing the bottom line
Sure, there are strategic plans and initiatives, customer satisfaction, employee engagement, etc., but all of these ultimately drive positive results and affect the three bulleted items above.
The sooner you as a sales person understand this and focus your sales engagement towards helping impact positively one or more of the above key areas, the sooner you start closing more deals. Your focus must be on the dialogue to gain an understanding of the decision maker’s challenges in key parts of their business. You must quantify those challenges (the pain) into financial values that in turn justify investment in the solution you have to offer.
Let’s illustrate this through a couple of examples.
After a conversation with a prospective customer, you determine they are struggling to effectively target and pursue new customers to drive top-line revenue growth. Your solution is access to new marketing data through a Customer Relationship Management (CRM) software. This software will allow the prospect to grow their top-line revenue by an incremental $100,000 each year. That annual $100,000 growth is not accessible without your solution that makes the marketing data available.
Another example is a prospective customer who is having difficulty managing their inventory; they believe it is consistently 20% too high. Their total inventory on average is $1M at any given time. Your business management solution can help them identify the inventory to carry and reduce that overage by 10% ($100,000). The above examples can be used no matter which industry you are in or product you have to offer. It can be used to sell a software system, a photocopier, or a service contract. What is important is that you address the prospect’s business challenges and determine the value to be gained. Once the prospect agrees with that value (very important!), you have the “no brainer” discussion.
Assuming your solution is $25,000 per year, your dialogue would go something like this, “So Mr. Prospect, you agree that we can address your challenging situation by providing our solution and getting you access to that $100,000 of business growth (or reduction in current inventory levels)? Does it make sense to invest $25,000 and get a $100,000 return in the next 12 months? Better yet, on a monthly basis the investment would be $2,085 for a return of $8,350. Would you like to get a 4X return every month on your investment? Basically the solution pays for itself and increases your bottom line by $6,265 every single month. In a year, you will have improved your bottom line by over $75,000!” Again, a “no brainer” decision.
By consulting with the prospect to understand their business challenges, quantifying the value by addressing those challenges, and justifying an investment that will provide a strong return (ROI), you drive a “no brainer” decision. You close more deals. Who wouldn’t give someone $5 to get $20 back? If you’re smart, you would do that all day long—100% close rate!
However, if you aren’t sure of the value and return on investment, then you are discussing an offering that is an expense. We learned from the bullets above that every decision maker looks to reduce expense not increase it. If you discuss an expense, you typically get no deal. Which equals 0% close rate.
For an improved closing rate, just remember this simple formula:
Business Challenge = Quantified Value = Investment = Return on Investment = No Brainer Decision = Increased Close Rate = Bigger Paychecks and Successful Results