Research estimates that 42% of companies experience revenue leakage, making it one of the most common problems sales executives face. It’s also one of the most overlooked. Common wisdom states that some loss of revenue is inevitable due to gaps in sales enablement technologies and processes. Not only is this view incorrect, it’s harmful.
In fact, companies can do a lot to hold on to their revenues. You simply don’t need to “sell more”. Instead, you can sell smarter. And it begins with understanding why you have a problem in the first place.
"As an administrator you can tailor questions for your Sales Team to allow for easy proposal generation. Building in product bundle variants, conditional pricing, and approvals lends itself to process standardization which enables our Sales reps to sell faster without hours of training."
Salesforce Solutions Architect
Why are you leaking revenue?
Revenue leakage begins with overzealous salespeople. Autonomy in the sales process is good and necessary. Reps must be able to build trust, offer incentives, and create personalized experiences with their prospects. However, there is a downside to this. Without guardrails in place (and sometimes even with them) reps can quickly move out of the realm of hard-nosed negotiation and into the realm of giving value away for no reason.
Insufficient Pricing Control
First, consider prices. Reps often lower their offer to entice buyers. But research shows that at a certain point pricing discounts become ineffective. It’s not that buyer’s aren’t happy to take them; it’s that they don’t make it any more likely the deal will close than a higher price point would have.
You have a team that sets the pricing strategy. But if sales managers don’t have quick, easy visibility into the offers reps are actually making, it’s impossible to know if it’s being followed.
Offering discounts is a necessary part of selling. But if reps need to go and ask for approvals every time they want to offer a discount, they (and their managers) can quickly find their days filled with administrative tasks instead of with selling. In addition, the process can significantly increase the amount of time it takes to respond to prospects, which is one of the most important factors impacting win/loss rates.
Autonomy from your sales team is ok. But without a way to automatically approve discounts below a certain threshold, you’re generating tons of paperwork that’s pulling sales away from their core competency and leaving the door open to your competition to connect with your prospects.
Missed up-sell/cross sell capabilities
It’s easier to sell to current customers than create new buyers. Yet many organizations don’t have any process in place to suggest pricing cross and up-sells to existing customers. Here, the problem isn’t that reps aren’t trying to sell more; it’s that with so many products available it’s impossible for them to be aware of all the opportunities.
Without some kind of automated process that can survey all the possibilities and feed relevant ones to reps, things will fall through the cracks and opportunities will be missed.
How to stop revenue leakage
Eliminating these inefficiencies should be a top priority. The solution is to use technology to set up limits, notify managers when they are breached, and provide automated assistance to stakeholders across your organization.
Our DealHub platform accomplishes this in four ways:
- Quote accuracy. Pricing is complex and changes all the time. Even if they wanted to, reps cannot keep track of all the different pricing options like subscriptions, leases, add-ons, bundling and more. DealHub CPQ ensures complex pricing remains accurate without slowing your reps down at any point in the quote-to-contract process.
- Workflow approvals. Sales enablement bottlenecks create friction that will make the difference between a won or lost deal. DealHub CPQ sets guard rails around discounting
and approval rules to eliminate duplicate admin tasks from slowing your reps down. It also integrates with CRM, so your whole team can work in one place instead of across multiple silos.
3. Margin control. Leadership must know that the orders and quotations generated by the Sales team remain within the pre-defined margins for items. DealHub will notify managers when a rep is offering pricing or discounts that goes beyond the boundaries of what has been authorized.
4. Version control. When contract provisions change, DealHub immediately notifies the relevant department within your organization so they can take quick action. Instead of sifting through entire quotes, your specialist can see only what they need to see. DealHub also keeps a single source of truth that reflects all changes made to a quote, so you never have to worry about confusion arising from different versions floating around on stakeholders’ computers.