Putting Sales Velocity into Action: Deal SizeArticle by Colleen Francis, June 24, 2019
So far in this series on sales velocity—which is all about understanding how fast you and your team are making sales and earning revenue—we’ve talked about what you need to do more of. More opportunities earned, for instance, means a bigger, healthier sales pipeline for your business.
Now let’s talk about what you must stop doing altogether.
Stop chasing deals that are too small. All sales success comes down to three things: more prospects, faster closes and bigger deals. Ideally you want all three, but for this exercise, we’re going to just focus on that third driver. If you want to land bigger deals, start by defining at the planning stage what is the right kind of customer you need to reach. The ideal customer with which to plan deal-size growth is the one that offers the highest number of options for achieving your goal. You’re looking for growth potential here, not comfort zones.
Next, stop thinking that the solution is going to come to you all at once. Be incremental in your planning. Set realistic expectations both for your business and for your target customer, too. One client of mine is in the process of changing their sales strategy to boost their average deal size. They correctly understood in their planning phase that they’d not hit their desired 50% growth goal within a single year. Instead they started with 15% for Year One. That’s given them the momentum and confidence needed to grow.
The third thing you need to stop doing: stop guessing.All plans are methodical, driven by facts that tell a compelling story. Be ready to start tracking your efforts and measuring your choices. Use can use your in-house financial system, a CRM or even a spreadsheet. Your KPIs must show short-term, medium-term and long-term progress toward your goal.
With your planning completed, let’s unpack what it looks like to execute a deal-boosting strategy to support increased sales velocity in your organization.
Look inside. Always start by selling more to your existing customers. That’s your inside track. Working from that base, prioritize the customers that offer the biggest opportunities to increase your average sales-size goal.
Be ruthless. I won’t kid you. This is a tough but necessary step. All top-performing sales leaders are skilled at regularly conducting a ruthless review of their existing buyers. They zero-in on those that are dragging down their average deal size, and they cut them loose.
Aim high. Ask any skilled negotiator and they will tell you that part of the art of deal-making involves being skilled at setting goals that are higher than necessary. But only after you have planned successfully and have targeted the right customers. Aim past your targeted deal size. Never at it. Leave yourself a bit of a bonus buffer. You’ll be surprised by how often that works in your favor.
Look elsewhere. If you sell to a client whose territory is defined by one or two regions, consider finding a similar client whose scope is national or international. This entails getting comfortable talking to high-level buyers. One client of mine successfully boosted their average deal size from $10,000 to $50,000, because they developed the rapport skills needed to go from talking to regional controllers to meeting with VP-level clients.
Coach regularly. Invest in coaching and skills development for yourself and your team. This is crucial. It ensures that none of you fall into the trap of chasing the wrong client or picking a targeted deal size that’s not in alignment with where your organization needs to be heading.
As I’ve explained throughout this series, your predictor of sales velocity success comes down to four factors. We’ve examined two of them so far: opportunities and deal size. Next in this series, we will look at your win/lose rate, followed by your sales cycle time.