27/07/2012 Comments Off on Making those sales
Consultants are salespeople. There’s no way around it. They are small business owners and, like most SMEs, need to spend 15% to 25% of their time on ‘business development’, a.k.a., sales.
In an earlier post, I showed the trade-off between paid time and sales time. The efficient way to improve revenues is to improve sales activities — as opposed to just working more hours.
How do you do that?
First, you have to realise what constitutes sales, and what’s just messing around. Sales skills involve getting from ‘it’s been a lovely chat’ to ‘sign here’. They are the tools you use to encourage people to give you money for your services. They include presenting your capabilities, finding where the work is, identifying the decision makers, and making a pitch (not necessarily in that order). If all you’re doing is talking about how great you are, or discussing interesting ideas with random people, you aren’t selling. That might be marketing or networking, but it isn’t sales. For sales, the other person has to have money and the willingness and authority to spend it. You also have to have a reasonable chance of getting the work.
The most important concept is the sales funnel. It looks like this:
Essentially, consulting is somewhat of a numbers game. You won’t get every project for which you bid; every person you meet won’t become a client. To have a certain flow of actual, paid work, you need to have an even larger volume under development — moving through the funnel.
The funnel idea recognises that sales is a process. Prospects go in the top, and sales come out. If you want the sales to come out, then you have to make sure something is going in the top. Also, it isn’t an instantaneous event. Each sale takes time. To keep a steady flow, you have to keep feeding the funnel.
This idea also helps with the practicalities of sales:
- You can classify your activities — you’ve just had a friendly conversation with some guy over a beer about a great research idea. Can he fund it? Can his organisation fund it? Who is authorised to spend the money? Is this central to their business? Is it something they are likely to undertake? These questions all help you decide whether that conversation was at the top, middle, or bottom of the funnel — how serious is it?
- You can see where you might have holes — So you’ve been flat-tack for the last three months. Have you talked to anybody new? Have you submitted any proposals? Are you developing any ideas further or discussion potential projects? If not, there is a potential for the flow of work to dry up. Time to fill the funnel.
- You can find your weaknesses — Given that it’s a bit of a numbers game, it’s also about your conversion rates (or, if you like, transition probabilities). For every ten people you discuss research ideas with, how many lead to project proposals? Of those proposals, how many lead to actual work? Let’s say, for example, that you convert most conversations to proposals, but have a hard time turning proposals into work. That gives you something specific to work on — are the proposals themselves weak, or are they not getting to the right people, or is it something else?
None of this is new, by the way. There are lots of sales books and systems out there. I advocate the KISS principle in all this — Keep It Simple, Stupid. The idea is to make sales, not administer a sales system. That’s why I like the funnel — a simple concept with all the power I need.