Keeping costs to a minimum is a no-brainer when you’re a business owner, and your sales department is one area where it’s especially easy to overspend. Investing your resources in expanding your client base probably seems like money well spent. However, it is possible to spend less without sacrificing growth. Here are five ways you can try to reduce your expenses and maximize your business’s profitability.
1. Reduce how much you spend on sales software
Software as a Service (SaaS) has become a key tool in modern business and according to a recent report on SaaS trends by Vertice, sales teams spend more on this software than any other department. However, the report also shows that sales teams are also wasting more than any other department – 52% of licenses are either “barely used or not used at all by the intended employee”.
To avoid this wastage, you need to get a clear and detailed overview of which applications are being used, how they’re being used, and by who. Companies like Vertice can obtain this data for you via a usage analytics service, or you could try and do this yourself by looking at records within each application and communicating with your staff.
Once you have this understanding, look at when renewals are scheduled so you can cancel unused programs beforehand, and see if there are any other tools out there that are cheaper or could allow you to consolidate processes you currently use separate platforms for.
2. Focus on existing customers rather than new ones
Acquiring new customers is important for any growing business, but focusing on your existing client base could be even more profitable. Doing so will allow you to boost your Net Revenue Retention (NRR) rate, which is the percentage of recurring revenue retained from existing customers in a defined time period. If you are able to keep all your existing clients and upsell to some too, you’ll increase your revenue and therefore your NRR rate. So, if you are able to achieve and maintain an NRR rate over 100%, this means your business is growing before you’ve even added new business.
In terms of reducing your sales costs, switching focus and upselling to your existing customers is much more affordable than acquiring a new customer. This is because you’ll already have some brand loyalty, won’t need to work so hard at marketing, and can use client data to better focus your messaging. Overall, this approach requires fewer resources.
3. Maintain communication with cold leads
Research shows that 60% of customers say no four times before saying yes, yet 48% of salespeople don’t make a single follow-up attempt. Most clients start as cold leads and salespeople must turn the heat up to convert them into customers over time, so don’t waste resources by giving up on cold leads too soon. Also make sure you have a solid system tracking all leads and sales processes.
There are various tactics your team could use to convert cold leads. This blog from GMass suggests reminding cold leads of your previous interactions, sending personalized emails and offers, and promoting new products and offerings. However, you could also waste resources by persisting with a lead that’s never going to convert, so make sure your team has a process for classifying different leads so it’s clear which ones to fight for and which ones to drop.
4. Go remote
Sticking to “remote sales” – sales through phone, email, or the internet – is an immediate way to reduce sales costs as your reps won’t need as much time or money to meet potential clients. This means more resources will be available, enabling the business to perform more efficiently. Your sales team will also have the capacity to liaise with far more leads daily compared with meeting each one in person.
This feeds into a concept called “economies of scale”, which is when businesses can reduce costs as production and customers increase. Remote sales increase productivity which in turn can boost customers. All in all, this allows your team to sell more with the same number of people, and will free up money for tools that can help reduce overall expenses and prevent inefficient use of salespeople.
5. Automate wherever possible
Increasing automation can make a world of difference to productivity. McKinsey and Company claim that more than 30% of sales-related activities can be automated. Some aspects – like order management and postsales activities – can be 40-50% automated.
Review your sales chain and explore where automation could be most effective. For example, you could consider analytics tools that can rate which customers are likely to churn, or chatbots to help handle incoming requests. There are more ideas for automating the sales process here.