The 4 Best Tips for Increasing Your Average Deal Size
Categories: Sales Conversation
Every salesperson is focused on closing deals. But, are you working towards closing the type of deals that allow you to charge a premium and solve the pain point with the greatest business impact? Larger deal size often means larger commission and a greater chance to exceed your quota.
There’s not a sales rep out there that doesn’t want to sell more, faster. The key to executing comes down to basic sales fundamentals. Even the most experienced sales rep knows that the large deals don’t happen without executing the basics. We’ve outlined four sales strategies to help you increase your average deal size, and a few shifts that should help you closing more lucrative deals in no time.
1. Demonstrate Your Value
You know the value that your company provides, and you know that you solve major challenges within company. Don’t fall into the trap of “show up and throw up”, you need to articulate that value in a way that has meaning to the customer.
- Identify pains and their cost. The first step in demonstrating value is identifying the pains that your lead is experiencing. What made this prospect interested in working with your company? What need will you be meeting? How big is the problem? What is it costing the company? Easy to say, harder to do. Dig deep to identify the pain. Ask probing questions that lead you to the information that make your solution a must-have, rather than a nice-to-do.
- Articulate and demonstrate how you solve them. How do you specifically do you solve those problems? What buying requirements are you able to satisfy with your own solution?
Establishing this value is critical throughout the sales cycle. It helps create reasons to further your sales conversations and their buying process. If it’s mapped to the correct business pain, your value will help elevate your conversation in the prospect organization. It also gives you a solid foundation to negotiate on value in the final stages of the deal.
2. Articulate Your Competitive Advantage
In an increasingly globalized world, prospects have access to domestic and international companies that can meet their needs. That means the competition pool is moving faster and is more crowded. You can get to London just as fast as you can get to San Francisco in some cases. Even if your solution is unique, it won’t be long before the competition catches up.
Your buyers are also researching your competitors. They’re informed. It’s up to you articulate why your solution is better than your competitors, in a way that’s meaningful to the buyer.
What does your company offer that may be different than your competition and meaningful to the buyer? What do your clients get from working with you that they won’t get from choosing your competition? Perhaps you have on-site staff who fly in once a month. Your competition may handle the same need virtually. If the in-person help is important to the client, that’s a differentiator that you should focus on. If the client prefers remote support because the employees are scattered, then focusing on that differentiator won’t get you anywhere in the sales process.
Think about it like the difference between buying an average sedan and buying a luxury vehicle. Sure, both cars get you to your destination, but the luxury vehicle comes with significant amenities that you don’t get with the average car. That’s why people are willing to pay more for a product that performs the same basic function as its competition. However, if that luxury car has a bunch of features the buyer doesn’t want or will never use, he/she will never pay the price. Your competitive differentiators are critical to your ability to charge a premium. However, they mean nothing if the buyer doesn’t think they’re as important.
3. Qualify Your Leads the Right Way
If you want to get your sales numbers up, you need to ensure that you’re focusing your energy on the prospects who are most likely to sign on the dotted line. Being a great qualifier requires that you are using customer verifiable outcomes to ensure that you’re spending time where it will pay you the most return.
To better qualify your leads and increase your average deal size, you should incorporate two important actions into your sales process:
- Determine the largest business problem
Dig deep uncovering negative consequences in order to find the problem with the biggest impact and make sure you are identifying who owns the problem. If you’re selling a solution with multiple decision makers, be sure you identify the requirements for success and the motivation for change within each role. Even if one person owns the problem, many are likely to be impacted from it being fixed.
- Use Defined Qualification Criteria
Standard qualification criteria also helps keep sales process benchmarks top-of-mind. The MEDDIC acronym is a great way to remember this critical criteria.
Metrics: Quantifiable measurements of the business benefits of the solution
Economic Buyer: Individual within the organization who has the final “yes”
Decision Criteria: Formal solution requirements in which each decision maker will evaluate the solution
Decision Process: How the customer will evaluate, select, and purchase a solution
Identify Pain: Pain is the catalyst for the buyer solving the problem within a set timeframe.
Champions: A person with influence in the buying organization. They have an investment in your solution being selected.
- Know when to disqualify a lead.
Time is money. So, every minute you spend nurturing a lead that you know isn’t a good fit for your company is time that could be better spent on leads that could yield larger deals. The absence of buying indicators likely mean it’s time to move on to better opportunities. When you try to qualify a deal, and the information you collect tells you that the opportunity isn’t a good fit, move on. Remember, the time you spend trying to turn around a dwindling deal is valuable time that you aren’t spending on qualifying better opportunities.
4. Develop A Value-Based Negotiation Strategy
Do you have a negotiation strategy in place to help you secure larger deals with your prospects? The key to successful negotiations is returning your prospect’s attention to the value you already established at the beginning of the sales process.
To effectively negotiate with potential clients and remind them of the value your solutions provide, you need to leverage three key tools to in the negotiation process. Using these tools, you can create a definable, repeatable negotiation process that increases your deal size and makes negotiations more efficient.
- Defined Goal - Before you can start working toward a successful deal, you have to internally define what a successful deal for your company looks like. This is your negotiation framework, and it’s based on providing your customers value, while still reaching your sales goals.
- Background Information - Remember all the information you compiled about prospect during the lead qualifying process? This information is also essential in the negotiation process. Return to the pains and problems you discussed and remind your prospect how your solutions address these issues. Using what you know about a client, refocus your negotiation on these pain points and how you can alleviate them.
- Options - Instead of having a single product or service offering, create multiple deal options for your prospects to choose from. Though these options are definable and repeatable, the prospect will feel less like they’re getting a one-size-fits-all deal and more like they’re securing a deal tailormade for their needs.
The fastest way to increase your average deal size is to focus on the sales fundamentals. Soon enough, you’ll exceed your sales quotas, increase your commissions, and strengthen your client base.
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