Ways to Cut Your Cost-Per-Sale

Ways to Cut Your Cost-Per-Sale

As business owners look for ways to reduce overhead, it’s common to evaluate their company’s vendors, supply chain procedures, and general day-to-day operational efficiencies for items that can be trimmed or eliminated. One area that frequently gets overlooked during times like these is the actual cost-per-sale itself – the time and effort it takes members of your sales team to close a sale and bring the outcome to fruition, whether that be production, design, delivery, etc.

It doesn’t matter what type of products or services your company sells. We’ve gathered several tips that will likely be universal to almost every type of business model. Rooted in common sense and practicality, the guidelines can be tailored to be applicable to your sales needs. Let’s get started.

 

Tip 1: Understand the Client

Client uncertainty, or indecisiveness, is frequently cited as one of the top factors that increase your cost-per-sale. Does the potential client you’re reaching out to understand what your services can bring to their company? Taking that notion a step further, is your sales team providing the clarity potential clients need?

Think of it this way. If you believe your vehicle is operating just fine, would you be likely to invest in repair services someone is trying to pitch to you? Probably not. But, if a sales rep understood your vehicle and could show you aspects of it that are likely to incur problems, the case for those repairs could more easily be made.

Thus, each sales approach needs to be tailored to not only show the client how your services can solve their problem, but also, that a problem actually exists in the first place. If a client believes there is no problem that needs fixing, then you’re wasting your time in presenting them a solution. Best to move on to the next sales opportunity.

 

Tip 2: Reach the Right Person

While this might seem like common sense, there’s still a great deal of time lost on the part of sales teams by failing to approach the right person within a targeted organization. Don’t waste effort by pitching to individuals who are without purchasing power. Find the decision-makers and base your approach around them from the start.

 

Tip 3: Provide Direction

Sales reps should know their products and practices inside and out, but a client obviously doesn’t know those things. Too often we’re seeing examples of sales reps asking clients how they’d like to proceed on a given project instead of providing direction and offering suggestions. Not only will this save a lot of back-and-forth correspondence and time, but it may enable sales teams to steer clients toward more desirable results. Plus, it adds credence to your expertise, which is always valuable.

 

Tip 4: Define Production Time

Before any type of project begins, a clear determination of time allotted should be established with your in-house production teams. Whether it’s designing something for a client, performing a service, or fabricating a product, the sales team should clearly inform the production team about how much time and resources they’ll be able to commit to a given project.

Perfection isn’t always possible, especially if the client is only willing to spend a pre-determined amount. To find the best possible solution, sales teams should be setting the boundaries within which work will be taking place. In some cases, this can actually be a real benefit. Sometimes innovative and creative solutions are found within a project’s boundaries, rather than having limitless options.

Remember changes are expensive. Costs mount rapidly as projects undergo client revisions or alterations. As such, it’s important to clearly outline what your clients can expect from what they’re investing and the points and frequency of which they can request or make changes.

 

Tip 5: Anticipate Hurdles

The combination of a firm understanding of a client’s needs and expectations with knowledge and experience of the sales process should enable sales reps to anticipate potential hurdles before they bog things down. For example, if a client is going to need input and approval from stakeholders, then why not improve efficiency by involving them in the process from the start? Or, if you know a client has major project deadlines of their own approaching and will likely become very busy over a given time, then plan ways to adjust your timeline to close your sale before you lose their attention. When a sales team is able to map out their plan from the first contact through the close, they’ll know the kinds of problems that are likely to arise, and they’ll be able to adapt more efficiently.

 

Trim the Fat

Perhaps we can take a little advice from the manufacturing industry’s “lean” way of thinking and look at our sales pipelines in much the same way that assembly lines are considered. Every sales process is unique to the firms they’re part of, after all. As you and your company evaluate your sales approach, keep the above guidelines in mind as you look at ways to improve overall efficiency, streamline your methods, and find ways to improve as you eliminate wasted time and resources.

 


Why Is a Sale So Expensive?
  • It can take as many as 10 contacts to bring a sale from the initial inquiry to close.
  • 50% of newly-generated leads typically aren’t ready to buy.
  • There’s been a 20% increase in the sales cycle timeframe over the last five years due to the number of decision-makers involved in the buying process.

Sources: Aberdeen Group, Gleanster, Sirius Decisions

 


 

Category Bottom Line, Features

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