What are the “invisible” costs related to the sales cycle?

costi ciclo di vendita

Evaluating the efficiency of the sales cycle is not a simple thing. There are various parameters to evaluate the work of a sales team, but there are also an infinite number of elements that cannot be quantified easily and directly. How much does the company cost, in terms of customer image and trust, an inaccuracy in a contract draft and the following dispute? How much time is lost in the re-modulation of quotes just because the seller didn’t have updated data? For these and lots of other reasons, quantifying sales productivity is not a mere subtraction between the revenues obtained and the costs incurred. It includes many more ‘nuanced’ parameters that risk affecting the performance of the entire sales cycle.

When it comes to the digitisation of sales and Sales 4.0, the focus is on increasing efficiency and reducing manifest costs. However, it is precisely in the context of managing indirect or “invisible” costs that the sales digitisation becomes essential to maximise results. Below, the main sources of “invisible” cost that digital innovation can reduce or cancel.

Information materials

Increasingly prepared customers ask the seller to dive into the characteristics of the product or service with technical data sheets and information materials. Sometimes these contents are not available or not updated: in this case, satisfying the customer’s need requires more time, costs and prevents the immediate closure of the contract. The use of a technological platform containing all the updated information materials – thanks also to the direct coordination with the marketing – could avoid time, searches, calls, e-mails to return to the customer with new information.

Contractual errors and inaccuracies

Any manually managed process is strongly at risk of errors and inaccuracies. Sellers are constantly under pressure, their time is taken up largely by support activities, yet they are asked to get better and better results. If the sales cycle is based on paper forms and scattered sources in catalogues, and very complicated lists, sellers can make many errors: from a wrong quotation to a wrong code, to a wrong transcription of the contract, they surely influence the relationship with the customer and the brand reputation. Any paper document can easily be lost, it is difficult to manage and can be misunderstood. Furthermore, sellers use obsolete brochures that are printed and distributed about twice a year. Speaking of sales cycle productivity, the cost of errors is always quite high and can compromise the relationship of trust with the customer.

Re-build quotes

It is one of the most classic and expensive cases in the “errors and inaccuracies” chapter just described. Having to re-build quotes is one of the biggest problems of sales productivity and it derives from the fact that customers ask for a mix of increasingly complex and articulated products. Here we come to the paradox that the process for creating an offer is long and tortuous, but also having to juggle codes, forms and variants to build a quote is a typical source of error. It involves not only a duty rectification, but also the effect on other company functions including the administration.

Time spent in support activities

Digitising sales means that the sellers can concentrate on their primary activity: sell. Today, unfortunately, the sales cycle does not always work this way: between e-mails, phone calls, data entry, corrections, adjustments and purely administrative activity, only 22% of a commercial’s time is dedicated to sales. Many orders arrive in a deconstructed form, and this obliges the sellers to manually enter the data in the management system. Consequently, the risk of error increases and the costs rise.

Costs for commercial training

Companies invest a lot in training courses for the sales force. Although it is an investment and not a cost, even here technological innovation can make the difference. The digitisation of the sales process guarantees the training teams the updating and the support needed to close the contracts.

Number of trips

Sellers spend time and resources to negotiate, from the very first visit to the customer up to the order. By digitising sales, it is possible to shorten the phases of the sales cycle and close the deal in one meeting with the collection of the graphometric signature or by signing the contract remotely via authentication OTP.

Unauthorised discount application

Often sellers promise customers high levels of discount or apply unapproved price lists. If the authorisation of prices and discounts takes place after the contract, the commercial management can avoid seeing the order accepted, with negative effect on the negotiation and customer management. Moreover, managers have little control over prices and on erosion of margins.

Product configuration errors

Errors can also occur in the configuration of the product, when a seller associate optional items that are incompatible or not foreseen by the commercial strategies with the main product. Other times, the seller may forget to include essential items or components. Finally, it can offer products or items no longer in the catalogue or sold out in stock. All this involves the need to inform the customer, potentially disappointing their expectations and resuming negotiations.

Use of non-compliant documents

Sellers tend to create their own presentations, documents and commercial templates to make their proposals more appealing, often overlapping with marketing. This may involve the use of information, graphics, logos that are not up-to-date or not in line with the corporate brand identity, causing image damage. With content management tools it is possible to convey digital materials that are always updated and in line with the corporate image.

Training and onboarding

Let the most experienced sellers do anything means to focus on the best and not optimise the potential of the whole team. The company refers to sellers who sell more and asks emulation and equal results for the less experienced or new hires, who often find themselves in difficulty. Sales Force Automation (SFA), Content Management and CPQ (Configure Price Quote) tools allow the company to lower the most effective sales disk on the commercial team, obtaining higher sales results overall.

Aumentare le vendite. Perché il venditore deve cambiare ora

Apparound Team
Apparound was founded in Pisa, Tuscany, in 2008 and is Italy’s only IT company offering an innovative solution for the digitisation of the sales process. With its cloud-based technology, the solution assists sellers all through the sales cycle: from pitching the marketing materials as digital contents (brochures, videos, etc.) to offer configuration through to the closing of the deal and the finalisation of the order with electronic signature; all through an extremely simple process, where all you need is a tablet or a smartphone, or otherwise a Web Client.