How To Increase Close Rates By 25% With Matt Walsh
Imagine if you could increase your conversion percent from 30% up to 40%. That may sound like a 10% increase, but you only actually went from 30% to 33%. If this confuses you still, Noted Analytics founder Matt Walsh is here to help you understand the math behind increasing your closing rates. Noted Analytics is a sales engagement platform for companies that struggle to find a balance between keeping reps productive and having visibility into activities and opportunities. In this episode, Matt and Chad Burmeister talk about the challenge of CRM adoption and data entry. While revenue equals frequency times competency, Matt also discusses how the Sales Process Execution can deliver 25% to 50% higher achievement.
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How To Increase Close Rates By 25% With Matt Walsh
I've got an interesting guest. Matt Walsh is the Founder of Noted Analytics. He's been there for a few years. He also spent ten years at SAP in the business intelligence and analytics side of the house. Before that, he was with Deloitte. We've got a smart analytical thinker here with us. Matt, welcome to the show.
I am happy to be on. Thanks for having me.
We are going to talk about something very important. If you rewind the tape a few months, we were in the best economy in the history of the United States. When you fast forward a few months, we're in the worst economy since the Great Depression. The flip of a pancake can change things overnight. Lots of world events have gone on as we're all familiar with and continue to go on and will continue into the foreseeable future. With that, we have to get better at everything, the blocking and tackling as we've talked about. A lot of the blocking and tackling we talk about in ScaleX.ai is how do you do more and how do you do it better? Revenue equals frequency times competency. We're going to talk specifically about the competency part of that equation.
Imagine if you could increase your conversion percent from 30% up to 40%. That sounds like a 10% increase to me, but in fact, it is a 33% increase if you went from 30% to 40%. Let's run an actual example. Think of my company, we have five direct salespeople and several indirect, but let's just focus on the direct side. Let's say we have five people that are signing an average of four deals at $10,000 a month. What would be the impact and value of increasing the close rate by 25% to 33%? How would that play out?
What I've seen and what I've discussed with other managers is when you start improving your win rate, there are a couple of things that are happening. One, you're being more effective with the deals that you're working on. Two, you're also qualifying out deals faster as well. If you can qualify deals out faster, that gives you another at-bat at the sales cycle that month. Let's say that you could take that other at-bat and improve your team closing from 4 to 5 deals a month, that's an extra deal per month times a team of five. That's $50,000 per month, $600,000 extra for the year just by being more efficient and effective with your sales process. There's the whole benefit of the information that you're collecting that went behind that winning opportunity. That's also what I find exciting with what companies are doing now.
Get more deals by focusing on the right prospects, the right customers, qualifying earlier and qualifying people out. One thing you also mentioned that is sometimes harder to quantify is the cycle time. If it takes me eight weeks to close versus four weeks, that can also improve the number of deals that a rep can handle and they can close a higher level per year.
What I've seen the reason why deals run long is because the rep is having conversations with the customer that aren't progressing the deal. They might keep calling the same buyer and they keep giving updates or do another demo, but they're not clear in what they need to do to move from stage 2 to stage 3, or to qualify this opportunity. It was pretty much running like the Wild Wild West. The rep will have happy years and keep pursuing that deal. Whereas if you have tighter criteria, you're managing your reps to that criteria, you're starting to put some pressure and say, “If we don't know who the economic buyer is, if this person that you're engaging with isn't leading us to that economic buyer, this deal isn't going anywhere, we should kill it and move on to the next one.” It's that type of diligence that starts to allow teams to move faster and get these extra sales cycles.
Having run a company for years, I didn't hire reps until months ago. It hits close to home because we're a good selling machine. We get a lot of pipelines because we eat our own dog food or drink our own champagne, as they say, but we haven't necessarily rolled this out. It seems to me, there are a couple of paths. We're bringing on a CRO who does this for a living, and that can be a costly endeavor. There is working with third parties. From a do it yourself, hire a CRO, or maybe you already have a CRO or bring in an expert. For years, you've been the expert and you've helped companies do this. If I were to draw a T-Chart and say, “Here are the values, the pros, and cons of having Townsend Wardlaw, my new CRO do it, or Matt Walsh provides this level of insight and process,” what are the pros and cons?
I'm also not mutually exclusive. What I've seen is you have your CRO who can only focus on so many deals. Their bandwidth is finite. They're going to look at the top deals. As they work on those top deals and they start to get to the end of the quarter, all the other deals that maybe didn't have the same dollar threshold that warranted their attention aren't looked at. What we help is provide that extra layer of scrutiny as if it's like a CRO helping guide the rep through, “These are the blind spots in your opportunity that maybe we would have covered if we were doing a one-on-one with every single one of your deals.” Since you don't have the bandwidth, we're showing the rep almost proactively where are their blind spots.
The manager can go through those top deals and they start looking at the lower hanging fruit and see if we could move this deal. They'll pull it into the quarter and all of that wonderful stuff. The deals are more buttoned up. It's less about, “What's going on here? I have no clue. There's no context in CRM.” They're looking at it and they have a clear picture of where the deal stands. They can jump in and help rather than jump in and start discovering what's going on and start getting acquainted with the deal, to begin with.
You've done this for a while and I would expect at SAP, you had some exposure to lots of processes as well for decades. What are some of the outcomes you've seen? Maybe there's a case study that comes to the top of mind, or maybe there's a broad brush that says, “I've done this two dozen times and the average is a 10% increase.” What analytics can you share about having done work with companies in improving their deal closures?
There's a number of things. The first metric that we try and first hang our hat on is getting more information into your system of record, Salesforce CRM, as an example. Focusing on what we can do to make reps more productive. We've made reps 35x more productive in terms of getting into that core system so managers aren't saying, “We want to have only these five fields updated.” They're able to expand the volume and the breadth of information that they're collecting on deals because we've streamlined that process from a rep. They naturally take note and populate into the system. It's no extra burden on their side, but there is more information coming in. From there, it's varied in terms of some of the decreases in sales cycle durations. We've seen decreases of 15% in an average sale cycle.
One company that we've been working with particular, we were working with their customer success group and they saw a 20% increase in cross-sell and upsell. That one was interesting because there was traditionally this separation and the silo of data as to what sales know, what sales collect, and then what customer success has to continue that relationship in upsell. By working with both teams, by having them aligned to similar processes, one group when they finished and when sales close the deal, that information was instantly available for the customer success teams to continue to run with it. They had an idea of what that customer was trying to do. They were able to dive earlier in the relationship into additional opportunities for value and expanding that relationship. That was a new one for us and expanding across teams, not just sellers, but people that are responsible for renewals, process and upsell in the customer success side.
That is 35x more information. It makes perfect sense to me. I took two pages of notes on notepaper and that's a terrible example of what a sales leader should be doing in their organization. For several years, I remember at Webex in 2005, my leaders, Kevin Haddad and Mitch Tarica, would say, “Why are you still taking notes on notepaper?” I've always found that writing piece of it helps me to think. I ended up throwing the notes away, but I do write it. I've got a digitized version sitting right there from my last two meetings so my paper stack used to get deep. Now, it's gone more into CRM.
When you talk about 35x, industry, company size, the title of the buyer, all kinds of pieces of information, there are many things that can help look at a deal. I remember going back to Kevin, we used to use Pivotal CRM if that exists. He would say, “Chad, in our view across all the 40 ops that we had going at a time, if I could see the title of the person in there, that would be amazing.” I was like, “Check this out. Let me reconfigure the screen, now you can see the title.” He's like, “That's amazing.” I added that into our CRM Salesforce nowadays. It does add one extra layer, but it's a mandatory field, what's the title of the level of the person you're working with? If they were working with you, when they added the contact who had a title, it would automatically check that box. Those are some of the things that you still get the business benefits, but without asking the rep to do any more work.
The whole story of where the company came from is that I was a huge Evernote user. I jot down so much information, but I wouldn't spend the time updating CRM from it. You get busy as a rep and no one wants to do all that copying, pasting, which field does this go in, this is a dropdown, but I added more information. You do the bare minimum. The whole idea was to become a revenue assistant. Let the rep work how they naturally work and where we started was, if you take notes digitally, from that notes that you took, we can update all of those dropdowns, picklists, text fields, all of those things automatically.
When we are updating them, it's not just into those fields, but it's providing both quantitative so you can say, “Which competitor are you competing with?” The qualitative as well as is, “What's their perception of that competitor?” Your report in CRM gets the information it's looking for, but as someone who's inspecting a deal, you also get that qualitative information as to, how are we going to start to position ourselves? Who cares about that competitor? Did somebody have a good relationship? That softer side of sales, making sure all of that is captured in as seamless in a way as possible from the reps.
I figured because your product is amazing. To help connect the dots with people, you can go from this to this and it's still a free flow feeling conversation with the prospect. Yet, unlike an Evernote, this is pulling the information back into Salesforce so that's actionable. That's how you can 35x the number of pieces of information so when you give the rep the workflow that they want to work in, it's tied back into the system of record.
Some of the aspects here too, is it was the concept of a template a lot of reps will work, this is the questions they want to ask, and information they want to learn like, “Before I go from stage 2 to stage 3, these are the things that I need to know.” They open up from it and it's going to pull information from CRM, so they know what they know already. They can validate that and make sure that's still true, but they also see what they don't know, what do they need to get to that next stage, and incrementally work through their sales cycle. Reps are busy. There are a lot of deals going on. A lot of activities and things you try to manage ahead and try to be more prescriptive and guide that rep ahead of time. Not smashing them on their hand when they try and move it to the stage and have violated a rule. Let them know ahead of time, “This is what you need to do to progress your deal.” It makes it simple for that rep to make.
Thank you for joining me on the show. We talked about the value. What if you could 25% increase in your close rates for us? If we can pull that off, that would be a $600,000 value proposition. Talk about leverage, you can either hire another person that's going to cost you a $100,000 to $200,000 and drive $600,000 or you can buy a tool like Noted Analytics, and you can automate a lot of the processes for getting better data into the system and increasing your conversion rate. I don't know about you, but I would rather spend a few hundred dollars than $100,000 for $600,000.
I couldn't agree with you more. Also, the conversations we've been having is people are trying to get their process ducks in a row. Things may have slowed down depending on your industry and who you're selling to and what you're doing. When things start to ramp back up, you want to start being ramped up and running as efficiently as possible. You want to have that sales process button-down, and as you start to bring on new people and onboard, everyone's singing from that same piece of sheet music.
Thanks for joining us, Matt. It's great to see you. Thanks for your time. I'm sure, I have a few salespeople that are trying Noted Analytics soon.
Thanks, Chad. I appreciate the time.