Breaking Bottlenecks in Converting Leads to Sales

Solving the mystery of low product sales with a stock-flow diagram

Sales leads on your product are not converting to product sales.  This is baffling to the product team because everyone has been very busy answering questions from sales and potential customers.  Your product launched a year ago and the market is growing.  Why are you getting good customer engagement with very few sales?

Your next step is to talk to your sales team and get feedback on the lead-handling process.  You ask questions about the experience in handling sales leads for your software-as-a-service product.  You learn that many leads are active but there is no recent customer contact.  Basically, the customers are ghosting your sales teams.

Your next step is to explore the last activity in the pre-sales process before the customer went silent on the sales team.  You learn the following:

• Sales teams are struggling to communicate how your product is different from competing products

• Sales teams believe the product price is too high

• Questions from customers go unanswered for a long time and this delays the sales cycle

You can take several steps to address this feedback.  Your stakeholders are pushing for sales growth after investing in your new product.  They are looking for quick fixes to the lack of sales.  You fear slashing prices won't drive enough sales volume to cover your costs.

You decide to write a stock-flow diagram to find answers.

Stock-Flow Diagram

Since your issue relates to the flow of sales leads to product sales, you decide to diagram this flow in a stock-flow diagram.  You notice sales leads go through this workflow:

1. Qualification - sales determines if the customer is suited to the product

2. Customer questions about the product - sales answers the questions based on help from subject matter experts

3. Request for a quote - sales provides a price for the product that meets the customer's requirements

4. Final quote - sales negotiates the final price with the customer

5. Lead converts to a sale - your product is ordered

The stock-flow diagram looks like this:

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Analyze the Diagram

You spot two bottlenecks in the flow:

1. Product questions are taking a long time to get answered

2. Confusion on the price - there is no value in your premium features that are included

You mark on your diagram how the lead conversion flow has these bottlenecks:

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Develop a Solution

You decide to address these bottlenecks by:

1. Gathering a subject matter expert (SME) team to respond to product questions quickly

2. Break your price into two parts: Basic and Premium

These changes are quickly implemented by creating the SME team and pricing your product in 2 parts.  You use the new pricing to explain the value of your product over competing products that only offer very basic features. 

Implement and Monitor

You quickly package these changes together and communicate the changes to sales.  With the flow diagram, you have a way to easily measure the progress of new lead handling.  Your initial focus is on the rate of responses to sales questions and the time from the initial quote to the final quote.

With your stock-flow diagram, you can check weekly on the reductions in these 2 bottlenecks.  You can take quick action on new issues.  You discover there is a side-benefit of your stock-flow diagram: your stakeholders and product team jump in to help.  You have small victories to celebrate on the way to sales growth!

Conclusion

When you are struggling with complex workflows, a visual representation can help you find bottlenecks.  Simplifying a workflow into variables and flows lets you spot the obstructions that matter.  Solving two small problems in a constricted flow have benefits for all teams in the workflow.  Smaller problems can be solved quicker and are easier to measure. 

Interesting links:

Raising your organizational awareness Some product people can sense the unwritten tone and climate of an organization - getting lots done from their organizational awareness.  This article has tips for product leaders on building their organization awareness skills.  This is one of many product leadership articles by Kate Leto that help with soft skills in product management.

We all can reach a flow state How to experience a flow state and be at your mental peak.  If you can enter the flow state more often then you can increase your productivity.