Most companies waste 85% of their time on activities that never result in a sale. At best, the most competitive company in an industry closes around 15% of its sales forecast. Nearly three-quarters of prospects, on company forecasts, will never buy from anyone, creating a quagmire for companies following activity-based selling.
If your company chases the wrong customer, you are wasting resources, too.
Traditional Go-To-Market Strategy
Does your company pursue sales like this? Every salesperson is given a quota to meet.
- Speak with 100 prospects
- Obtain 25 appointments
- Do 12.5 prospect surveys
- Get 6.25 proposals
- Make one sale!
This strategy wastes resources 85% of the time.
Not all marketing activity is good activity. Outside sales representatives who pursue every possible lead waste time on unproductive meetings, and if we ever get back to normal post-COVID life, will waste time and money on travel. Inside sales representatives waste time and resources chasing the wrong prospects.
Impact on Complex Sales
The impact of wasted effort is most evident for companies pursuing complex sales. They already work a limited number of opportunities. Wasting most of their resources chasing every lead has a substantial impact on the bottom line. Not only are resources needlessly expended, but some sales that may have been won can be lost, too.
Wasted time and effort are not just a sales problem. Misdirected resources also affect revenue generation and customer service across the enterprise.
Everything Has Changed
After the Recession of 2008, buying journeys changed. Companies purchased sophisticated phone systems that act as gatekeepers to the inner sanctum and block unwanted sales emails.
The internet is another major agent of change in the customer buying cycle. Prospects no longer accept requests for meetings to learn about the latest trends in their industry. They simply go online to look for solutions and won’t engage with anyone until they’re ready. When they do engage it’s usually with only one or two companies that appear able to provide a solution to their problem.
Salespeople must climb multiple layers to reach the person who actually makes a decision and controls the money.
Research reports show that up to 90% of buying decisions are made before an executive ever engages with a salesperson.
Competitors know what you are doing and can copy any success you have. Prospects find it harder to differentiate between competing products and services.
Even though companies claim competitive differences, those differentiators don’t seem to matter to prospects because they all sound alike. As offerings begin to appear equal, price becomes the main differentiator and results in dramatically reduced margins.
The activity-based model of doing business no longer works.
Effort Does Not Equal Effectiveness
Customer acquisition is no longer a numbers game, if it ever really was. Targeting a huge lead volume and pursuing each lead equally is expensive and ineffective. Most of the effort does not make your business more competitive. You simply waste resources on unproductive work.
It’s time to work smarter, not harder. Identify the attributes of your perfect prospect and only pursue those that qualify. Then differentiate with provable value-based metrics based on what you’ve done for others. Learn where to start in our next blog post — Identifying Your Zebra – Your Perfect Customer.