Sales Processes and ManagementTomChilders
As a green industry contractor, you must have an adequate revenue stream to survive long term.
How you build this revenue stream will largely be driven by your decisions on what products and services to offer combined with the market – or markets – you choose to target. Some contractors zero in on just residential maintenance or lawn care, others want to focus on design build, commercial work, or, some want to do just residential builder work. The list goes on.
Regardless of your company size, product offerings and target markets, your business will develop processes to engage prospects and turn them into paying customers. Some companies are fully aware of this and have it mapped out and some aren’t.
To bring this matter closer to home, according to Hindsite’s 2015 Green Industry Benchmark Report. 58% of green industry businesses have only one sales person, the owner. The same report states that 25% of the respondents say an inability to follow up on leads is their biggest sales issue. Point being, regardless of sales force size, a sales process and management method is a must have to really manage and grow revenue.
While there are quite a few good different sales processes used in the sales world today, the one used in this discussion is from the influential sales text written by Gregory A. Rich, Rosann L. Spiro, and William J Stanton, entitled “Management of a Sales Force” Twelfth Edition. It encompasses the sales process from beginning (prospecting) to end (commitment and follow up) and the individual steps Sprio and Stanton outline are as follows.
- Prospecting – the initial contact
- Preapproach—planning the sale
- Approach – engagement and initiate discovery
- Need assessment – discovery process
- Presentation – present your solution
- Meeting objections – listen to and solve pain points from above
- Gaining commitment – agreement
- Follow-up – follow up on any action or open item
The steps themselves and how they are evaluated are key parts of the sales management process. The goal with any sales process is to take the prospect from one stage to the next, called a conversion, until the final sale is made.
The timing and needs of the prospect will determine what it takes to successfully move through each stage, but the prospect does not necessarily go through all the stages. The situation will vary based on the complexity of sale and needs and motivations of buyer just to name a few. Some customers will need literature, designs, and a conceptual walk through, while others may just need a proposal and a handshake. This is where the ability to truly listen and read the prospect comes into play. Many times this is a function of the buyer’s level of experience and confidence. A first time home owner about to spend $50,000 on a major landscape project will likely need nurturing in each and every stage. Whereas an experienced builder will hand you a drawing for a landscape package for a single spec home and say “price it.”
Regardless, a critical component in successfully managing the sales process is insuring that your sales person is equipped with the knowledge, tools, and resources needed at each stage. The faster and better a prospect’s questions, concerns, and needs can be addressed, the faster and smoother you can transition to the next stage. In our industry, some practical examples of this would include making sure the sales person has the necessary literature about your company, specifications or fact sheets on the products used, design capacity (including knowledge of any local permitting and/or code requirements), insurance and/or surety requirements, and more.
A large part of the management process is to examine how well you perform at each stage so you can maximize your conversions. For example, if you get a 100 leads and end up with five (5) jobs, you have a conversion rate of 5%. If you want to understand what is driving this, you should dig in and evaluate the steps in the sales process (for more on this see Sales Pipeline post).
In your evaluation, question everything [especially any assumptions you make]. First off, are these good leads that truly represent your target market and have you demonstrated consistent success with your target market? Is adequate planning going into initial meeting? Have you thought about similar jobs and customers where you had success that you could use as references? And what led you to success with these references?
Catch your breath, write down your thoughts but keep questioning yourself.
Are there known hot buttons or key criteria with this prospect? Have you adequately and demonstrably dealt with them? Do you always run into price objections that you can’t seem to overcome? If that’s the case, really evaluate how well are you getting through your value proposition with the customer. Do they really understand your skill and expertise level? Do they know you are licensed, insured, and run a good business, and are they comparing apples to apples in the bid evaluation process?
Construct good sales appeals and collateral around your strengths [think brand too] and test-drive your presentations and ideas on your friends. Your friends, or people you think are similar to your target market, can provide you valuable input. But, above all, listen intently to what your prospects and customers say. If you are unsure of something, ask for clarification.
One of the key benefits of a good process and process management is scalability. As your sales and company grow, you have the process in place to accommodate and perpetuate.
Not to say growth is always the objective but at least now it’s always an option.