Bottlenecks.

Every single “sales” problem you have comes down to 1 of 3 bottlenecks.

1. Demand

2. Conversion

3. Implementation

It doesn’t matter if you are a founder of a startup, CEO of Fortune 500, or Account Executive carrying a bag, slinging to meet your VP’s quota.

If you aren’t happy with your income or sales, you have a bottleneck.

When you fix the bottleneck, life will be better for a short period of time. Until you realize that may introduce new bottlenecks.

Let’s start with the most common bottleneck.

Actually, before we start, let’s talk about a “really solid, almost perfect, sales day.”

8 Hour work day.

6 hours of it should be going towards customer-facing, revenue-generating activities.

2 hours should go to admin.

AKA

6 hours of customer calls a day (top of funnel, in funnel, negotiating, etc)

The remainder is CRM updating, internal meetings, etc.

Okay... Onto the most common bottleneck

Demand

All things being equal, if you 2x your demand, you will 2x your sales.

Demand is the top of the funnel. It’s the new conversations you are having a week which turn into realized pipeline. This is the low hanging fruit in your business. This is also the most commonly outsourced part of your business.

If you have an SDR, you are leaving the most important part of your sales process up to someone else. I’ve never understood why anyone in sales would outsource their livelihood of setting meetings to someone else (story for another day).

How do we know if the bottleneck is demand?

1. Are you spending between 4-6 hours per day with clients?

If the answer is anything other than “yes,” you have a demand problem in your business.

You need to spend all of your time generating demand for your business. This is new conversations with new people whose problems you can solve.

You need to go what I call “allbound”.

Cold email, cold calling, referrals, network, partnerships, direct mail.

You need to do whatever and anything it takes to get new conversations with people who have the problem that you can solve.

My first sentence stays true.

All things being equal. If you 2x your demand, you 2x your sales.

No lower hanging fruit to 2x your income.

Conversion

This is “selling”.

Going from a 25% to 50% close rate isn’t as easy as going from a $5m to $10m pipeline. Hence why I tell everyone, focus on demand.

Let’s talk about if conversion is your bottleneck.

If you are having lots of first meetings a week, that turn into pipeline, and then enter a sales process, in which you close less than 20% of those deals.

You have a conversion problem.

Many of you reading this are saying, I have a conversion and demand issue. Shouldn’t I solve the conversion first?

The answer is no. And here’s why. Let’s say you have a $1M pipeline, 20% close rate, $200,000 of expected sales.

It’s not unrealistic for a salesperson to go through coaching with Rick and me to go from a $1m pipeline to a $5m pipeline.

Close rate still 20%.

New math =

$5m pipeline

20% close rate

$1,000,000 of expected sales.

Recap.

If you’re only closing 1/5 deals in your pipeline (20%), you have a conversion issue.

Implementation

Bottleneck number 3.

Implementation.

It’s possible you can be exceptional at 1 of the first 2 bottlenecks and experience an implementation bottleneck. It’s unlikely though.

What does an implementation bottleneck look like?

Imagine you sold packaging for a living. You had so much demand and such a high conversion you actually sold out capacity.

The only limiting factor in you making $1B a year is the ability to actually produce what it is you’re selling.

Another example.

You sell SaaS and have a solutions engineer/architect who has to implement the SaaS you’re slinging.

Imagine you sold so much SaaS to so many customers that you don’t have enough implementation/solution engineers to onboard new customers.

Again. Implementation problem.

Last example. You are a sales coach. You have so many clients that you are serving clients 16 hours a day. Considering the doctor says you have to sleep for 8 hours a day and there’s only 24 hours in a day. You now have an implementation issue.

You are AT CAPACITY.

This is the goal for everyone.

When I joined my last company, I sold out capacity in 11 months.

Life was good.

99.99% of you reading this won’t have a capacity issue.

What’s your bottleneck?

Should take no more than the length of reading this article to know what your bottleneck is.

Simple flowchart.

Am I having 6 hours of client-facing interactions a day with at least 2 hours coming from new conversations?

If No. Demand Problem.

If yes.

Am I closing at least 50% of the deals entering my pipeline?

If no. Conversion Problem.

If yes.

Am I unable to sell anymore of what I sell because of a capacity limitation?

If yes, implementation problem.

If No.

Then keep on selling.

Until next week,

Chris