There are lots of sales training programs available in today’s market and the programs all promise increases in performance and rapid return on investment.
"In business, words are words; explanations are explanations, promises are promises, but only performance is reality." - Harold S. Geneen Former president ITT Corporation.
That being said we decided to test our sales training (based on Persuasion EngineeringⓇ) to give you the skinny on what types of results are possible. This methodology is based on flexibility of the salespersons behavior and not the “normal” sales training process of “when the customer says this I say that”. Instead it starts with understanding our product, possible objections and customer values to help the customer make a good decision. That might be buying our product or service or looking elsewhere for what works best for them.
Before the sales training we have to take a baseline measurement system.
Simplicity of process and measurement.
Although our sales process has been successfully adopted by many companies, both large and small, with great success; for the sake of our case study we selected a weight loss center client that we worked with to illustrate the typical results. In this particular example, there is little complexity in the sales process. It is as simple as:
- Answer the phone
- Schedule the appointment for consultation
- Sign up the customer
While there are branding issues and marketing channel choices we will be looking at the pure sales opportunities presented from phone response to product and service decision point. This particular client was very consistent in their marketing spend and their marketing channel selection. They spend USD 10,000 per week in print ads with a specific mix of media outlets. As this client was part of a franchise chain we did not want to change the marketing materials or corporate mandates in terms of marketing method or mix. Our focus was on the sales process once the phone rang.
You have to know where you are to get where you are going.
Our first job was to understand the current process steps and results in order to create measurements for performance measurement (KPI’s). As we look at the process we always look for logical break points between functional areas and opportunities to improve communication between functions. In this instance, we noticed that measuring and testing long term commitment was missing from the sales process. A sale without long term commitment does not lead to success for anyone involved in the transaction. Instead it leads to problems with consumer perception, lack of referral network and eventual erosion of market share. Here are the three steps in the process and their measurements:
There are advantages in breaking down the process down into distinctly measurable steps. First it allows us to understand and act on segments of the process that need improvement. Additionally, these measurements are easy to maintain and understandable by everyone involved in the sales process leaving no room for interpretation of the results. Lastly, we developed a simple measure that provided an overall measurement that everyone in the company could understand and act upon. That measurement was called C2C or call to close. This gave us the overall ratio of performance of the processes as they related to one another. We simply added up all the percentage measures of the first two steps and divided by two to give us an average performance for the total business funnel. We left out the retention rate measurement as that was important enough to treat separately.
You have to know where you are before you set out on any journey.
After looking at the existing numbers we saw that the C2C was at 17% and average sale size was USD 1,350. When we looked at the cost to acquire a new customer we found that number was around USD 720 per customer meaning a gross margin of approximately USD 650. This meant that the advertising media was making more on every customer than we were. Keep in mind this was not overspending in marketing it was overspending in conversion. Once we factored in those the other costs of doing business such as people, rent, insurance our client realized that they needed to do something and fast. We started with a simultaneous approach of recording phone calls and video recording the consultation sessions to get a better understanding of what was happening and how we could improve quickly.
The first thing that we did in our sales training process was work with the receptionists to get them to better understand why we were getting the calls in the first place. Were they health related, a beauty concern or something else entirely? Once we understood the reason for the call we were able to work with staff to have them start to direct the customer to understand how inaction would not help the current situation and that the first action they might want to take was coming in to see us to determine how much we could help them become more of the person that they desired. We also made sure that the value points were documented in the appointment schedule to help the client and consultant to have common ground from which to work in the subsequent steps.
From the video analysis, we noticed several things and maybe the most remarkable for the client consultants was to recognize was, the customers truly had their own best interests at heart and it was the consultants that were ignoring the selling points of the client. Worse yet, in a majority of the cases the consultants were un-selling the clients by getting in the way of the client process. We were giving them reasons to not do business with us. Our sales training approach was to help the consultants better understand what the client was saying and what points they did not mention so they could their approach to provide proof of understanding and build trust. Additionally, we wanted to make sure that we helped the client manage their expectations on what part of the weight loss process we would provide and what was required of them to produce the results they wanted. This was a partnership and we would do our part as long as they understood their part and were totally committed to themselves and their future.
And the sales training results.
After spending one month of sales training working with management and staff they were able to get their C2C up to 68% on a week to week basis. Meaning that the number never dipped below that percent and some weeks exceeded that target. Total cost to acquire a new customer dropped from USD 720 to just over USD200. This put an additional USD 520 per client back into the business. An additional benefit from changing the sales process from the previous state to one in which client commitment soared was that the average sale went from USD 1350 to over USD 2700 per new client. When we measured client attrition rate we found it to be less than 2% over a 90-day period. Not bad for just over one month’s time.