What Factors Affect Sales Performance?

Most business owners believe that sales are driven by product quality. While this may be true to some extent, it’s not entirely correct.

Sales is made of three parts: pre-sales, sales process, and closing. Inefficiencies in any of these components can negatively impact your sales performance.

In this blog post, we see how that is the case, plus five factors that majorly impact your sales performance.

Sales Constituents

Pre-Sales

As the name suggests, it is the process that takes place before a customer makes a purchase. It’s where you get to know your potential customers and identify any challenges they might have in making a purchase.

This is crucial because it sets the tone for all other aspects of the relationship with prospects, partners, and customers. Also, it ensures that your sales cycle goes smoothly and that you are able to close as many deals as possible.

Pre-sales processes should be designed around the needs of each stage in the customer lifecycle and include:

  • Lead Generation: It determines how many customers you will eventually land. You can either generate leads from an existing customer base (which means you have to reach out to them) or from new lead lists (which means you need to get in touch with potential customers).
  • Contacting Leads: This can be done through email, phone calls, or social media channels. Pick the most befitting channel to yield the best results.
  • Lead Qualification: You need to understand who your potential customers are before you can even begin to build trust with them. Plus, you need to find out why they are interested in your product so that you can tailor your messaging accordingly.
  • Lead Nurturing: It helps you build trust between you and your potential customers. This involves keeping in touch with them on a regular basis until they make their first purchase with you.

Inefficiencies can creep up in any/every part of the pre-sales process and shatter your sales performance.

For example, your lead nurturing could be poor because there is no proper sourcing of leads. This means that you are not able to identify which of your leads are most likely to convert into actual sales.

And that’s most likely because you don’t have enough data about your customers and their behaviors. If you don’t have enough information on who they are and what they like or dislike, then it will be very difficult for you to know what kind of information should be included in your sales call, value-add materials like newsletters, follow-up emails, etc.

Sales Process

It is the procedure(s) your company adopts to implement the sales cycle. Think of it as a combination of all the steps involved in making a sale, from identifying potential customers to closing the sale and delivering value.

It is (probably) the most important part of your business as it determines how you’re going to sell in the future.

The length and complexity of your sales process will vary depending on many factors:

  • What type of business are you in? A restaurant needs different processes than an ecommerce company does.
  • How big is your company? Bigger companies tend to have more processes because they have more customers and therefore more opportunity for repeat business (and thus more revenue).
  • What kind of relationship do your customers have with you?

    Large companies that have deep connections with their customers tend to have longer sales cycles with fewer interactions between buyer and seller (more automation).

    Smaller companies generally have shorter cycles (with more opportunities for face time), but they also tend to have less automation because they don’t yet know as much about their customers’ needs and wants.

You can avoid inefficiencies in this process by using relevant sales management tools and by making it more interactive, listening to customer problems more intently, working on a personalized approach (Account Based Marketing), and building a process that can help you scale up without affecting personalization.

Closing

Closing is the final step in any sales or purchase process. It is also known as ‘purchase management’ or ‘sales enablement’ in some industries (e.g., healthcare).

The purpose of closing is to ensure that all parties involved have agreed upon terms and conditions for the sale or purchase of goods or services.

Interestingly, for high-ticket products, there are two parts to closing: close and commit.

Close is the last step in the customer buying cycle, where you make the sale and get paid. Commit is more active; it’s when you set up a deal to follow up on.

When a customer signs up for your product or service, they’re committing to buy from you at some point in the future, whether that’s today or months down the road.

Remember: A deal hasn’t (really) been closed if the customer’s money hasn’t arrived in your company’s bank account.

Inefficiencies like ineffective closing techniques, complex payment gateways, etc. can significantly affect your closing rate.

To mitigate them:

  • stop ‘selling’ and start offering ‘solutions’ that eliminate your customer’s pain points and you won’t have to chase them to buy from you.
  • Build a frictionless checkout process so that you neither irritate a customer who is excited to buy your product nor ‘gift’ them another second to rethink their buying decision.

Factors Affecting Sales Performance

Poor Product Quality

If a customer complains about your product, it’s important to understand why they are unhappy and what could be done to make it right. Customers are more likely to buy from a company that listens to their needs and responds quickly.

The customer experience should be optimized, and the right solution should be chosen for the right problem. The right solution may be a different product or service altogether, or it may involve a combination of products or services that work together to solve the customer’s problem.

Listening to your customers well is one of the best ways to avoid building bad products right from the get-go. A good way to do this is with customer interviews.

Poor Quality Of Leads

Poor lead quality means that you have to spend more time converting them into clients.

So, you can either dump your resources into ‘trying’ to convert bad leads or invest in techniques that can get you highly qualified leads at an optimal cost for digital marketing campaigns.

For example, CRM systems can help reduce costs by identifying prospects who are more likely to buy based on their demographic information and buying patterns.

You can also use lead-scoring software to identify prospects with the highest potential value. This will help you avoid wasting time on low-quality leads that don’t fit your sales strategy or goals.

Please note that the sales cycle is getting shorter and shorter. In fact, some companies have gone as far as to eliminate the salesperson altogether by automating sales calls and other interactions with customers over the phone or email. This allows them to focus more on marketing and upselling products instead of selling them directly to customers. This may not always be the right approach since automation does remove personalization that is a big component of higher conversion.

Inefficient Sales Process

The sales process is an individual’s journey from prospect to close, and it can be measured in terms of time, profitability, or other metrics.

They are often inefficient because they’re based on outdated technology, poorly designed tools, and processes that don’t scale.

If you have a commission-based sales system in place, you are also likely seeing a lot of churn. This means there is always a chunk of resources who are recent recruits. Poor training often manifested by the lack of proper employee training software tools or inadequate onboarding would mean they are not performing as expected.

And inefficient sales processes is a result of project management gone wrong, and can affect sales performance by creating bottlenecks that prevent new customers from entering your pipeline and keep existing ones from buying more quickly.

For example, if your company has a lot of departments or products, it’s easy for different teams to work on different parts of the same project at the same time.

This can lead to confusion and delays in getting things done.

The result is a disorganized process that doesn’t let anyone focus on what they do best — which means they don’t perform well as part of an organization that needs them most: customers.

So, build SOPs and sales frameworks that can help you scale.

SOPs are business processes that support the implementation of your company’s values, strategy, and goals. They outline how your team should behave when interacting with customers — whether it’s helping them buy something or answering questions about products or services — so you can make sure everyone is doing their part in order to achieve your goals efficiently and effectively.

Unexciting Sales Process

A lack of engagement with your customers can lead to disengagement, which determines how well you sell. If your product isn’t interesting enough for them to want to buy it, they’ll likely move on to something else that appeals more to them.

So what can you do about this?

Well, to begin, you need to make sure that your sales process is engaging and fun for both parties involved in the transaction — especially if you’re selling (purely) online.

One way is by using product tours and walkthroughs for new customers who are interested in learning more about your product or service before they purchase it. This way they can see firsthand what it’s like before they buy it and make an informed purchase decision.

For example, you can use a video walkthrough to demonstrate how easy it is for customers to use your product. A walkthrough doesn’t have to be long; it just needs to show how easy it is for customers to get started using what you offer in a simple way that makes sense for them.

Remember: Let your past results speak to the customers.

Ineffective Feedback Loop

No matter how good your product and lead quality is, there are always things that can go wrong in the customer journey that can lead to lost sales. Understanding why prospective customers don’t convert, and identifying lessons that you take back is an extremely important element of the sales process.

For example, you may realize that your product is not available in the colors that the customer may want (but does not explicitly convey during market research). Or, your competitors may be doing a better job with showcasing testimonials from happy customers than you, which means you will have to do one better in order to keep prospective buyers from slipping away.

Unless you have established a feedback loop that identifies where leakage happens in the customer journey, and why this happens, it may be nigh impossible to fix your systems in order to improve sales performance.

Unnecessary Frictions

Frictions are the things that get in the way of a customer completing a purchase. The lower the friction, the higher the sales (provided all the other sales process elements are top-notch).

If you’re selling online, you must have a payment gateway that’s easy for your customers to use and understand. This will allow them to complete their transactions quickly and easily so that they can spend more time doing other things instead of waiting for their orders to be fulfilled by your business.

Also, frequent server crashes can be frustrating for users when they’re trying to complete an online transaction, especially if they’re trying to purchase something from an unknown seller or service provider who may not be as reliable as others in the industry.

Having an unstable server can cause delays in processing payments and shipping orders, which could lead to lost sales opportunities if not addressed properly right away.


Final Words

Sales is what enables customer acquisition, product or service development and design, manufacturing, marketing, distribution, and order fulfillment.

Improving sales performance is about increasing productivity and profitability. To do this, analyzing all three components (like we mentioned above) and identifying inefficiencies as quickly as possible, and making changes to your sales practices is a must.

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