Techniques for PMs to impact the sales cycle. By implementing them, they can show strong ROI for the PM role.
A shorter sales cycle has a direct impact on the bottom line. Shortening the sales cycle can help grow revenue because sales reps will be able to reach more prospects. An additional advantage to a shorter sales cycle is the reduced chances of things going awry during the process.
This article discusses techniques for PMs to impact the sales cycle. By implementing them, they can show strong ROI for the PM role.
Where do you start?
Positioning is too large a subject for a single article (or book for that matter). This article will simply describe a tactical step that can be taken within the company's positioning framework to shorten the sales cycle.
Noting where the prospect places your product within their mindset is critical. That location will determine the lens through which the prospect will examine your product. If the product is positioned as different than anything they are familiar with, the prospect will struggle to place it in the right position and will default for one they are familiar and comfortable with. This place may not be conducive to the sale.
Each of the personas in the purchasing process has different expectations and needs. The budget person needs to see ROI and a low price, the IT manager needs to feel comfortable that he will stay in control of his domain etc. In a complex sale, it will be beneficial to position the product slightly differently for the various personas in the sales process. Therefore consider providing the sales reps with a set of sales materials for each of the stakeholders in the buying process.
Pricing affects the length of the sales cycle in several ways. Prospects facing a high price tag may be forced to refer the buying decision to a committee (or up to the next purchasing power level). This will inherently complicate and lengthen the sales cycle. The ideal price point is just below the ?committee requirement? threshold.
A lower price usually means a quicker sell. Lower prices fit into existing budgets and buyers do not have to seek out additional approvals. There is an exception to this rule. If the price point is too low, it may adversely position your product and raise questions as to why it is so cheap. In addition to the product's positioning, a low price point cannot sustain complex sales cycles.
PMs should be involved in the decision processes that lead to pricing decisions--participate in the pricing committee, conduct market research, perform cost/benefits analysis and help position the product (which includes pricing). All this needs to be down as a prelude before the pricing decisions are made.
For a broader view of pricing, see my article Product and Pricing Strategies
If your pricing model is complex, the sales reps will have to spend a lot of time explaining it to the prospect. The rep will need to explain it to the prospect and also to educate them well enough for her to sell the pricing model internally. The lack of understanding of the pricing model can cause discomfort within the prospect's mind and educating her can take time. This problem can be avoided with a simple pricing model. Pricing model flexibility is a plus when it comes to the speed of the sales cycle as the rep can change it to respond to the prospect's needs. On the other hand, pricing model flexibility is a drawback from a management and consistency point of view.
If the pricing cannot be presented on a single slide, it is too complex.
The purpose of sales tools from the point of view of shortening the sales cycle is to:
Many times prospects will ask the sales rep for a document comparing your product to that of your competitors. When there is rapport between the prospect and the sales rep, many times, whatever the rep provides the prospect will be the majority of the comparison work she will do. This requires that the document be an even-handed comparison devoid of marketing fluff. Also, make sure all of your claims can be substantiated.
For each competitor, I recommend creating 4 documents :
For more details on competitor review documents, see my article Creating Effective Competitive Sales Tools For Your Sales Reps