How Web Conferencing Leads to Greater Sales Productivity

By Geoffrey James

Web conferencing is becoming an increasingly important element of the sales environment, according to Gerhard Gschwandtner, founder and CEO of Selling Power. During an online meeting with executives from Macromedia, Gschwandtner described the market forces driving this trend.

The heart of a sales organization’s purpose is to create relationships with the goal of eventually making a sale, said Gschwandtner. The process can be visualized as a funnel, with the top of the funnel being where new leads enter the sales process; at the bottom of the funnel are the customers who eventually buy something. The purpose of relationship building is to make certain as many potential customers as possible make it from the top of the funnel to the bottom.

The sales leads entering the funnel can be separated into three categories: profitable, marginally profitable, and unprofitable, he explained, noting that this categorization is far more useful than the more typical characterization of prospects into easy-to-sell and difficult-to-sell categories. Under the latter model, it is entirely possible to have a customer that’s easy and presumably desirable to sell to, but unprofitable once the deal goes through. Similarly sometimes the prospects who are the most difficult to sell to end up generating the highest profits. This makes sense, if you think about it, just on the basis of supply and demand. The most profitable customers are the ones every sales team is targeting because, ultimately, selling is more about profit than about revenue.

Returning to the funnel model, Gschwandtner said sales groups have three basic strategies for increasing sales effectiveness:

  1. Widen the funnel to increase the number of sales leads, thereby capturing more potentially profitable customers;
  2. Increase new lead qualification so a greater percentage of time is spent on potentially profitable customers; and
  3. Improve sales productivity, thereby decreasing the cost of sales and making more prospects profitable.

According to Gschwandtner, Web conferencing technology makes it possible to pursue all three off these strategies simultaneously. Take lead generation, for example. A sales team’s success depends on leads, but to run a profitable business the cost per lead must remain low. Traditional methods of generating sales leads – cold calling, direct marketing, advertising, hotel marketing and so on – can cost anywhere from $100 to $300 per lead. Web conferencing, however, offers a new vehicle for lead generation that’s likely to cost a fraction of that amount. Because Web conferencing is particularly appropriate for handling relatively simple subject matter it’s perfectly suited for prospecting, thereby allowing sales reps to attract more qualified leads at a lower cost per lead.

Web conferencing also allows sales teams to move existing prospects more quickly through the funnel, at an overall lower cost per sale, noted Gschwandtner. In this case the advantage lies in the ability to work with a larger number of customers simultaneously. In the traditional sales process sales calls were sequential. The sales rep began with a personal visit, engaged the customer through voicemail or email, exchanged documents and then, possibly, the process moved to a subsequent visit. This sequential process was especially true in the case of complex sales in which a number of meetings might take place, drawn out over months and involving dozens site visits. By contrast Web conferencing offers the opportunity for sales reps to more easily and quickly contact multiple customer stakeholders. This accelerates the sales cycle and lowers the cost of the sale.

In other words, Web conferencing doesn’t just provide sales teams with another tool but leads to a greater level of profitability per sale. Under the circumstances the big question isn’t why so many sales teams are gravitating toward online meetings, but why some sales teams aren’t yet on the bandwagon.