You will win more business quicker if you improve your sales conversion optimization.
Sales conversion optimization: This post is part of a series to help B2B organizations improve sales and marketing cooperation. Throughout 3 posts, I’ll explain conversion rate optimization strategies and how you can win in a down economy.
A slow economy is difficult for business, and no salesperson welcomes it. Especially when it was never predicated like 911 and Covid-19. Ultimately it boils down to diligence, marketing savvy, business ethics, and innovation.
With the Big Tech layoff, businesses are scrambling to optimize the use of the cloud SaaS models. New business models are needed to be successful.
My ecommerce friends should be doing an ecommerce conversion audit at least once a year, if not daily real-time reports. I love dashboards that tell me the speed we’re going and if the engine is firing on all cylinders.
In part one, you’ll get the basics of beginning the process and the information and agreements you’ll need to implement to ensure success in a slow or down economy.
Things like were you on solid footing before? Is your foundation strong or is it crumbling? A slow economy exposes a lot of issues.
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As the water in the pipeline stream lowers, more and more foundational and structural issues get exposed.
“Because of the state of euphoria over what (software vendors) thought they could deliver, there was a time over the past two or three years where they over-promised and dramatically under-delivered. And they didn’t have a great tendency to listen.”
– Steve David, CIO at Procter & Gamble
“So, if you want to sell to me, come into my office with a demonstrated solution to a problem I’ve got. … That means you’ve got to understand my business, how I make my money, and what my problems are.”
– Roger Krone, VP & GM of Boeing Rotorcraft
Faced with this kind of corporate reaction, high-tech vendors are getting frustrated with the stiff barriers erected by corporations in making IT investment decisions these days. This applied to most small businesses as well in a down economy.
Many software company executives and sales reps – especially those who grew up professionally during past years – are finding it extraordinarily tough to adapt to the challenges of today’s marketplace.
The situation is worse than one might have imagined just a few months ago.
“The worst software buying environment in memory” is one complaint I regularly hear. So, what more can one do to develop and close deals except try harder and harder against all odds?
To look at this situation another way, one can argue that tough times call for tough and even different tactics.
I would go so far as to argue that two key qualities in today’s sales force and management rank count for more than any others: firstly, contrarian, inquisitive thinking, and secondly (believe it or not) solid sales discipline.
I believe these qualities will be rewarded significantly more than the aggressive, even bold, marketing/sales approaches that characterized the past.
Puzzlingly, many firms still seem unable to give up their hard-sell tactics, despite all the evidence that they don’t work today, even for ‘established’ product categories, such as ERP, Supply Chain, and CRM.
In this article, I shall share with you an approach that, after over 30 years in enterprise and small business sales (including a start at IBM), I know will work, provided you apply it consistently.
The approach I am about to describe can ensure success for any company with decent (i.e., not necessarily exceptional) product offerings in a relevant product or service category (i.e., not necessarily a recognized hot category).
Furthermore, I will make the following assertion: Unless your company is a bonafide leader in an established, growing product category, every time you lead with a product (as most software vendors still do), I can assure you that you are likely to fail in today’s market.
The new selling approach to win more business faster
Sales conversion optimization can help you increase your revenue while saving you money at the same time. What if you could close one more deal per month? How about 2 or 5?
As we all know, the scenario inside large corporate organizations today is quite different from what it was just 3 years ago, when arguably the top 10 or so IT projects at any one time may have got funded at some point.
This was probably due partially to the wasteful nature of corporate IT investment management at the time – profligacy which has now come home to roost, as billions of dollars of unimplemented software and equipment lie on the shelf in these organizations.
This goes for legacy and SaaS software vendors. In contrast, the situation in most corporations today is that, in relative terms, only the top three IT projects on the list at any given time stand a chance of getting funded.
And it is every sales rep’s job to make sure that the deal they are trying to close is a part of one of those few funded projects.
Put another way, the obstacle course that most technology vendors face today can look as daunting as this:
- First, you have to ‘compete’ against all other proposed IT projects to be one of the customer’s ‘top three’ funded investments (knowing that even these can be deferred at any time);
- Then you have to compete against existing in-house initiatives and workarounds;
- If you are still standing at this point, you must then compete against the threat of the customer using some of the excess ‘shelf’ software acquired during the past two or three years;
- Then you confront the threat of vendors from an adjacent product category who may claim to solve the same set of problems as your category addresses;
- Finally, you may be competing against vendors in your category! (it wasn’t supposed to be this difficult, but this is the nature of the game nowadays.)
Looking further, how corporate budgets are being managed can send misleading signals to understandably antsy sales reps.
For example, instead of the lines of business getting to use their budget allocations, they now need to obtain sign-offs from not only the CFO but also the increasingly involved CEO for anything above, say, $100k in some companies. Besides, expect to see clear corroboration that the project has been well-researched.
And that it will generate a payoff in the short term, the chief executive is asking one simple but critical question that is enough to put a nail in the coffin of many a promising investment proposal: “Why now?”
Just as software vendors in the early 2000s all became versed in such skills as finding where the budgets are in their customer’s organization, the puck has now moved to a different spot on the ice: let’s face it, enterprise customers have become used to fending off vendors’ advances with the ‘vanishing budget’ argument.
And when customers apologize late in the sales cycle that their budget has been ‘frozen’, it may be no exaggeration these days.
Despite what some sales professionals might want to believe, corporate budgets are nothing more than best-guess funding allocations made in a prior fiscal year or quarter and liable to be temporarily or permanently ‘frozen’ or ‘reallocated’ at any time that economic conditions warrant greater caution or resource scarcity.
IT investment for sales conversion optimization
Regarding the financial justification for IT investments, I believe that customers resist vendors’ “ROI” arguments for several reasons – apart from the fact that they often come across as no more than sales enablers designed to serve the vendor’s interests:
- The ROI study does not focus on a specific, sufficiently critical problem that the customer admits to being desperate to solve to prevent an unacceptable outcome, such as lost market share, lost profits, or worse
- Vendor-driven ROI calculations often only consider the cost of licensing and implementing the vendor’s software rather than considering the investment required to solve the problem.
- It fails to show clearly what assured short-term, incremental gains will result in a first phase to fund the remainder of the project in a second, then a third, phase.
- The study does not necessarily create a case for doing it NOW versus later – after all, companies manage to live with many problems, even serious ones, on an ongoing basis.
- It usually fails to establish enough in the customer’s mind why they should buy from this vendor ‘X’ versus vendors ‘Y’ or ‘Z’
Above all, I cannot over-emphasize how critical item (3) above, regarding short-term gains, can be in today’s market. Every enterprise customer knows that implementing any project worth it’s salt will take time.
Nonetheless, the initial payoff needs to occur early in the life of any significant IT project. Many vendors, it seems, have misunderstood this to indicate that large corporations have become unreasonably concerned with achieving all the gains immediately (i.e., in two-quarters or less). This is just not the case.
In fact, in any significant investment, customers are quite amenable to the idea that benefits will accrue in stages over time, with some occurring in the mid-term and even the long-term – provided they can be sure of achieving some tangible benefits within a three-month or so window. Importantly, these early benefits help in a very direct way to ‘fund’ the remaining investments.
More than any other consideration, though, investments in relatively new categories don’t get funded out of existing budgets (because these have usually been set up to cater to investments in known product/service categories).
But out of the only reliable funding source in tough times: in other words, the savings or new sources of revenue unleashed by solving a critical operational problem.
So, how can companies – many of them ‘designed’ in anticipation of a ‘tornado’ of Internet-generated demand during the investment bubble – overcome such extraordinary challenges to find the necessary funding for the deals they are trying to close?
Next week I’ll drive into the second approach I recommend – “Provocation-based Selling.”
In part II, I will cover three topics related to the hand-to-hand combat required for high-tech sales teams and executives to close deals:
- (a) what do you say to the ‘top dog’ to get them interested in your potential solution?;
- (b) what are the main priorities for marketing to support the field?; and
- (c) how do you take account of the differing interests of the various target constituencies you must deal with in typical enterprise-level sales cycles?
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General FAQs and sales conversion optimization
What is sales conversion optimization?
In digital marketing, sales conversion optimization, or conversion rate optimization (CRO), is a system for increasing the percentage of visitors to a website that converts into buyers.
Why is sales conversion rate optimization important?
Conversion rate optimization (CRO) is essential because it allows you to lower your customer acquisition costs by getting more value from the visitors and customers you already have. Optimizing your conversion rate can increase revenue per visitor, acquire more customers, and grow your business more quickly.
What is a good sales conversion rate for landing pages?
What is a reasonable conversion rate? Across industries, the average landing page conversion rate is 2 – 4%, yet the top 25% convert at 5.31% or higher. Ideally, you want to break into the top 10% — these are the landing pages with conversion rates of 11.45% or higher.
How can a recession increase sales?
During an economic downturn, it’s tough for even the best sales professionals to close deals.
Seven Strategies for Selling During a Recession
1. Don’t Devalue Your Product or Service.
2. Stay Calm and Focus on Solutions. Innovate!
3. Concentrate on Fewer Leads, but Contact Them More with Harassment.
4. Don’t Neglect Your Customer Base.
5. Upgrade Your Salesforce.
6. Use SEO paired with content marketing (you should be doing this anyway)
7. Set metrics and attributions to see if you are still on the road.