It’s no secret that a business with documented processes will sell for more than one that works from the hip. Sales is one of the last frontiers of process implementation and adherence for entrepreneurial businesses. One reason for this is that sales reps naturally resist process. The other side of the coin is that implementing a sales process can significantly impact a business’s value.
There are many ways that a sales process benefits an organization, both internally and externally. From a business owner’s perspective, there are four ways that a mature sales process can increase the value of a business:
- Grow revenue by winning more
- Growing assets
Before we look at each of these further, let’s explore a “mature sales process”.
What is a Mature Sales Process?
Two process components are the steps and the metrics to measure effectiveness. Over time, the processes should evolve. Steps are added, edited, or changed to improve the performance of the metrics. Or, the metrics are changed to drive the desired business results.
So, a mature sales process is one that:
- Is documented and followed by all (FBA)
- Has evolved to the point where there is a degree of confidence that the proper steps and metrics are in place
- Is a tool that leadership uses to manage reps and ensure they are taking the steps necessary to win
When properly crafted with supporting tools, reps are less likely to skip steps of the sales cycle that would increase their chances of winning. For example, we often see sales reps shortcutting the discovery process. It is not uncommon for a sales rep to present the solution before spending enough time uncovering the specific challenges and the impact of those challenges on the prospect’s business.
A documented process with a tool like a simple Discovery Checklist can ensure that reps do a thorough job of assessing needs. Then, their proposals are much more likely to hit the mark.
So, the result is a higher close rate, more revenue, and higher valuation.
Accurate tracking of the sales process in a pipeline tool helps a leader or business owner know what to expect in the coming months from a performance perspective. This is particularly relevant for a project-centric business that might have a lot of revenue fluctuation.
Looking at the pipeline to know what is coming can be very helpful for business planning. Predictability drives business value.
- Assets drive business value
- A sales process is an asset
- Having a sales process as an asset increases the value of a business
That one is pretty cut and dry!
The last way that a sales process drives business value is in differentiation. This is particularly relevant for businesses selling commoditized products or services that are hard to differentiate. So, the experience that a customer has with the business can be the differentiator.
Implementing and following a tight sales process that looks at all customer interactions can improve the customer experience. This might be the difference in winning or losing for businesses that are otherwise hard to differentiate.
If the plan is to sell the business someday, then it seems like an obvious step to implement a sales process. These benefits increase the value of a business when it is sold and can help you realize significant benefits along the way.
The good thing is that a sales process doesn’t have to be complex! The Pareto Principle applies to the sales process! When is the right time to implement a sales process for your business?