Client
Intelletrace Telecommunications Company, one of our longest standing clients, specializes in circuits, network design, network installation and managed services. It’s based in San Francisco with annual sales around $8 million.
Objective
In 2016, we were introduced to Mark the owner. He felt their sales closing rate was low, but had no idea of KPIs, no formal sales process, no systems, and no clear idea of how to move forward.
They were also having a challenge hiring and keeping good salespeople, because it’s a very complex industry and very competitive. Mark was the top sales person. They had no sales manager; Mark tried to fill that role and was trying to hire people outside the industry, but they didn’t have the knowledge and expertise needed, and he didn’t have expertise managing sales people.
They hired a sales consultant who worked for them for a year, but with little results.
Goal: Build and retain a stable sales team that would produce consistent annual growth, with a target of 8-12% increase in revenue.
Objectives:
- Implement a formal sales process for the salespeople to follow.
- Install and program a Customer Relationship Management system (CRM) to track sales activities and results (opportunities, face to face meetings, closed sales, etc.).
- Train salespeople in our Sales Conversation Flow Formula.
- Grow sales revenues to $1 million within one year.
- Provide a sales manager, until a permanent sales manager could be found.
- Help them hire, train, develop and keep salespeople.
The Solution
We had an established sales process to implement, and a good CRM to install.
We planned to introduce the salespeople to the Conversation Flow Sales Formula ©2016 Eureka Enterprises we had developed.
Summary of the Conversation Flow Sales Formula:
The idea is to take the pressure off sales persons to “sell” the prospect, and instead have them focus on having more “conversations” with the prospect (face-to-face meetings, phone calls, emails, etc.), and demonstrate more care and understanding, which develops a stronger emotional connection. This builds trust; and that produces more sales in the long run.
Principles of the Formula
- People justify buying rationally, but they actually buy based on emotion. Our premise is that resistance to appointments and buying is not intellectual or factual; the real problem when encountering resistance in the sales process is the lack of an emotional connection between the client and the salesperson. When an emotional connection is weak or missing, there is little or no trust, and less emotional urge to buy.
- Essentially, sales is a transfer of trust. The basis is human connection; the emotional feeling of being understood. The feeling of being understood is even more powerful than the feeling of being loved. It’s speaking to the subconscious mind of feelings and motivation, imagination, intuition and connection; not the rational mind of features and numbers.
- Another way to look at it is to think in terms of gravitational pull or magnetism. When two people are conversing with each other, it produces an energy flow between them, which can be positive or negative. We want to increase the positive flow; that gets them excited about the conversation and wanting more.
- Having more and better conversations; that is, increasing communication interactions (face to face meetings, emails, phone calls, etc.), and demonstrating care and understanding in those conversations, causes the prospect to feel loved and cared for. The care and understanding are what the prospect feels. When someone takes the time to truly understand a person, the other person feels love and cared for, and that increases trust.
- As conversations continue, it deepens the relationship, and trust becomes more solidified. As that happens, the client is more open to the proposed solution, and more willing to say yes.
- Increased trust also means the client is more likely to reveal what the real problems are in their organization.
- The Sales Converse-Convert Method also helps sales people direct the conversation, and it helps them recognize the challenges and true issues that the client has, so that they can respond appropriately.
- When implemented properly, it can have significant results quickly.
Process
Over the first six months, we did the following:
- Provided a sales manager, who continues to manage presently.
- Trained the salespeople in the new formal sales process (making calls, follow up, prospecting, etc.). We did in person classes/training sessions with the sales staff.
- Programmed the CRM to track sales activities, opportunities, and sales opportunities closed.
- Introduced the Conversation Flow Sales Formula.
- Observed salespeople doing presentations and appointments.
Outcomes
Summary:
- 2017: Sales closing rate of 37%, Gross sales $2.9 million (almost 3x the goal)
- 2018: Sales closing rate of 71%
- 2019: Sales closing rate of 70%
- 2017-2024: Average closing rate of 66%
The details:
- That first year (2017), the sales team closed 37% of every opportunity that was opened. That was an increase from the previous results. The average close rate for the telecom industry is 26%. This is significant because the salespeople were new to the industry and new to sales. That meant that there was a lot of room for growth. We attribute this to the introduction of the Conversation Flow Sales Formula.
- The owner was happy with the new success rate of 37%, but that meant that 63% of the opportunities were lost.
- By the end of that first year there were two salespeople who were fully trained and very productive.
- The firm continued to hire and train inexperienced salespeople directly out of college, and the in 2018 the sales opportunity closing percentage increased to 71% (almost double).
- In 2017 the gross sales were $2,869,364 (almost 3X the goal).
- We discovered that the Key Performance Indicator (KPI) of success was number of Face to Face (FTF) meetings with the client, and we began tracking that KPI in Jan 2017.
- We developed a formula called the Predictive Sales Index (PSI) ©2016 Eureka Enterprises, which measures the top KPI against revenue. In this case, the KPI was FTF meetings. Their PSI = total revenue divide by # FTF meetings. For example, $1.2 million divided by 100 FTF meetings = $12,000 of sales per FTF.
- In 2017 the PSI was $14,790 (this is the amount of revenue per FTF meeting). In 2018 the PSI increased to $16,486.
- In 2019 the closing rate continued strong at 70%.
- Overall, 2017-present in 2024 we averaged 66%.
- Due to the nature of the industry’s product delivery process, it usually takes six months for salespeople to get earn commissions. With the implementation of the Conversation Flow Sales Formula, salespeople were closing sales faster, resulting in getting paid sooner, ultimately resulting in greater retention of salespeople.
- The success in sales not only created a huge increase in cash flow and profitability, but it also created a clear and effective process for the salespeople that enabled them to thrive. This meant that the salespeople did well and stayed longer with the company, reducing hiring and training costs.
