The Top 3 Ways to Improve New Customer Acquisition
Feb 26 2019
Despite the fact the full year revenue plan attainment is strong across the organizations in our research community, a new year has started and odds are good that many of you are already in the painful situation of already being behind on quota. It’s the natural cycle of sales.
Every fiscal year leaves leaders with the dreaded task of figuring out how they are going to make their goal this year, regardless of what happened last year. There are four distinct levers that leaders in our 2018-2019 Sales Performance Study are pulling to drive 2019 results. In our recent blogs, here and here, we talked about the first strategy, putting more leads into the funnel. Today, we explore the second strategy, capturing new accounts.
Unfortunately, there are few strategies in a sales organization which boast worse efficiency than capturing new accounts. The sheer amount of money and time devoted to the elusive goal of bringing in new client logos is immense. Yet, the win rates are lower with new accounts, and the sales cycles longer. Further, our study shows that only 30% of revenues on average are attained from new customers. No wonder, 70% of the sales leaders in the study said their ability to close new business with customers needed improvement or major redesign.
If 70% are displeased with their capability, that means 30% aren’t. So, what do those 30% know that the others don’t? What are they doing differently? It turns out that there are three major differences between the top performers and the majority who are struggling. Here are ways you can replicate their best practices:
- Derive your sales process from the customer path. Sales process has been a hot topic for many years. Yet only 20% of sales leaders have a truly dynamic sales process. Why such a gap? Sales process definition means something slightly different than it did in the past. Historically, having a sales process means defining the actions (seller and customer), metrics and weighting for each phase of an opportunity to close. That is surely still a requirement. But today, sales processes need to be enabled by technology, refined with analytics and derived from the customer path taken to make decisions. Most sales processes still suffer because they are developed with an internal focus. It’s the subtle difference between ‘how do I close this deal?’ and ‘how do we help the customer make a mutually-beneficial decision?’
- Prioritize prospects with data. On the surface the idea of prioritization seems a bit obvious. With limited time (sellers spend 18% of their time in prospecting mode), it should be spent where it will bring the most return. But unfortunately, most prioritization systems use vague criteria such as company size or industry. For most selling models, that doesn’t really narrow the playing field much. In addition, there is little granularity to the prioritization model. Anything inbound is assuredly a hot lead, anything else is not. The best prioritization models are based on data and are refined over time. What is the ideal customer profile for your solutions (size, geography, structure, tech stack, customer model)? What specifically are the trigger events associated with a need for your solution?
- Install formal opportunity planning. Organizations with excellent opportunity planning were five times as likely to be effective at closing new business than those with poor opportunity planning. The relationship between the two won’t surprise you. But the strength of the connection is worth noting. It was one of the strongest we uncovered in our study. Unfortunately, two-thirds (66.1%) of those in our study said that opportunity planning needed major redesign or improvement within their organizations.
Organizations must strive to turn new account capture into a more productive endeavor. Sales and marketing leaders place big bets each year on sales prospecting tools, demand generation programs and seller time. They need to see more of a return on those significant investments.
Questions to ask
- How well are you able to identify the prospects who are most likely to buy from you at the point when they are most likely to buy from you?
- How granular is your view of ideal customer?
- How formally defined is your sales process?
- Are seller actions in your sales processes derived from, or rather are they mapped to your customer actions?
- How well adopted is your opportunity planning approach?
- What kinds of data are pulled from your opportunity planning tools?