How to Deal with the Obstacles Preventing Net New Revenue Growth (Part 2)

There are many forces and factors that prevent net new revenue growth. In this 2-part series we’ll offer ideas about what you might do to consistently grow faster. Go here for Part 1 of this article on External Obstacles to Revenue Growth.

Starting From Behind: Churn

Imagine you are a world-class runner. But instead of lining up at the starting line, you start 300 meters behind the rest of the field. It is difficult to generate net new revenue when you have to first make up the revenue you lost going into a period. There are a lot of reasons your clients leave, but only a few of them is due to sales. If the client wasn’t right for you or you were not right for them, the churn is on you. Most of the time, however, the loss belongs to another department.

See: What Is Churn Rate

Too Few Real Opportunities

Most sales leaders and sales managers require each salesperson to have enough opportunities that they can lose a lot of deals and still make their number. Unfortunately, losing a large number of opportunities isn’t a very good strategy. Let’s go back to something in Part 1. Look at every opportunity that had a first meeting without a second meeting. Any opportunity that hasn’t had a second meeting is not an opportunity. These so-called deals can be safely removed from your pipeline without you losing anything, as they are not real, even if leaders pretend it is coverage.

See: Opportunity Creation is Equal to Opportunity Capture

Variability Of Performance

In any sales force, you will find salespeople who are incredibly effective. You will also find sales reps that have a very low sales effectiveness. You can calculate a salesperson’s effectiveness by looking at the their win rates. It is difficult for some to understand that sales success is individual. This is why when two salespeople are both working at the same company, with the same manager, the same strategic targets, the same sales compensation plan, and the same competitors... one succeeds while the other struggles.

See: How Variability in Your Inputs Creates Variability in Your Sales Results

Effectiveness Problems: Low Win Rates

The reason sales leaders believe their teams need an abundance of opportunities is because their win rates are low. Recently, a friend of mine told me that the average win rate for salespeople is 17%. That is 5% better than the win rate of RFPs. I also read that quota attainment is 27%. There is nothing more important for generating net new revenue than your sales effectiveness. Revenue doesn’t come from opportunities. It comes from won deals. You get no contribution to revenue for lost opportunities or deals that are not real.

See: 5 KPIs for Sales that Measure Sales Effectiveness

Lost Time: Too Many Distractions

For all the conversation about sales efficiency, salespeople spend little time sitting in front of a client. Sales stacks have grown larger and are more demanding. First, sales leaders who prioritize things that don’t contribute to revenue growth are harming their revenue growth. Second, salespeople have more incoming emails, many internal, text messages, Slack conversations, and more than enough to be distracted.

The promise of efficiency hasn’t proven true. Salespeople need to do things well and with a high level of effectiveness. The first is creating new opportunities. The second is capturing the opportunities they create. The concept of Via Negativa means you can improve your results by subtracting instead of adding.

See: Time Management for Salespeople

Your Sales Approach

As a sales leader, you have the right and the responsibility to determine how your sales force sells. You have the right to choose the sales methodology you believe your clients need from you and one that will help your sales force win the deals that will create net new revenue.

It doesn’t matter if a salesperson has experience or they believe they have their own sales style. You can improve your results by adopting a modern sales methodology built on a set of value creation strategies. Anything less will cost you net new revenue.

See: Sales Leader Guide: How to Choose a B2B Sales Methodology

Lack Of Development

Because we tend to believe that our sales force knows how to sell, we don’t spend nearly enough time training and coaching them, let alone taking the time to build a development plan for each person on your team. There is no question that B2B sales is more difficult than at any time in the past, yet we allow the sales force sell as if nothing has changed.

When a salesperson has a first meeting you need them to be able to convert that meeting into a second meeting. Then you need them to be able to build the momentum that wins deals. Real opportunities are too precious to allow your sales team to lose them. Opportunities are also expensive when it comes to time and revenue. Once lost, you might be locked out of the client for years. This is why winning matters.