What's a Sales Lab, and How Can It Help Your Business? – Entrepreneur
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If you’ve been looking for a platform to test out experimental sales ideas and practices that might just boost revenue, a sales lab could be the solution.
If you’re familiar with the concept of a sales lab, chances are you might’ve heard about it in the context of a university or college. In those cases it’s usually a purely educational endeavor that helps train students in sales skills.
In fact, there’s another version that can more directly benefit your company. Beyond potentially creating stronger revenue streams, it can also future-proof your business.
Whether you’re a B2B or B2C company, a sales lab can be a true game-changer for your organization’s revenue and sales. This in-house endeavor provides a practical classroom in which your sales professionals can engage in intensive, experiential learning and experimentation.
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It’s all designed to improve their skills and help your business stand out from the competition, growing your bottom line in the process. Here’s a look at how a sales lab can make that happen for you.
Imagine a company that provides full-service marketing support to restaurants, with three sales representatives who qualify, pitch and close new clients. Traditionally, the company charges $5,000 a month for its services based on the prevailing economic environment and what competitors charged for similar work.
But what if our marketing business could charge $10,000? Chances are, it would never try this on its own initiative. The increase is too dramatic to risk losing an otherwise qualified lead for most people, at least not without some evidence that there’s a market at that price point.
This is where the concept of a lab would be helpful. Our hypothetical marketing company could give one of those three reps a reasonable compensation structure and put them to work full-time on the challenge of selling the same package to targeted prospects at twice the price.
One of two things may transpire: Either (A) in the worst case, the company gets solid support for its current pricing structures or (B) in the best possible case, it doubles its average revenue per client.
Building a mechanism for your sales team to experiment and work out new ideas, new messaging or even new product or service lines while guaranteeing them fair compensation means they’re free to radically stress-test and explore the possibilities without fear of losing income. In return, your company enjoys several benefits.
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Following ideas from your competitors isn’t necessarily a terrible idea, but you’ll always wonder how much more your company could achieve with a bit of fresh thinking. An internal sales lab lets your experienced professionals explore more innovative sales techniques. They can develop new markets, come up with new offers and deepen your company’s understanding of its customers.
However, the utility of a sales lab goes beyond mere ideation. A dedicated sales team in the lab means they can test out those ideas, analyze the results and refine the approach. Your company benefits from this process through optimized methods and proven results.
You can research developments in your industry yourself or pay someone else to do it for you. As helpful as that information undoubtedly is, however, it’s always going to be second tier compared to information that’s developed exclusively with your company in mind.
Cookie-cutter ideas lead to cookie-cutter results, meaning you’ll always be merely following the herd and never outpacing it. With a sales lab, your team can use its accumulated “inside” information to work on those ideas and initiatives that particularly benefit your company.
That’s how you reach your company’s business and revenue goals — not by chasing the pack but rather by leading it.
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A sales lab that frees up your top performers to innovate and get creative helps incentivize them to achieve remarkable things. At some point, we’re all a little risk-averse. That’s especially true where employment is concerned. Dedicated sales team members don’t usually want to risk their jobs by suggesting an untested, unproven idea. What happens if it fails?
Instead, in a sales lab, participating sales team members know that the company leadership wants them to take those risks and reap the potential rewards. In exchange, they know that failure won’t be met with a loss of position or status, so there’s a limited downside.
In fact, failure should be rewarded in a high-performing sales lab. Encourage your sales lab team to fail fast. Otherwise, people become so risk-averse that they’re afraid to suggest the really bold idea — the one that can take your business to the next level.
Instead of asking someone to put in extra hours, let certain sales representatives dedicate all their time to lab work. This creates a more conducive environment for creativity and brainstorming.
You’ll also need to figure out a structure that works for your business in terms of both compensation and business goals. It’s important not to overthink this process, however. As with any new venture, it’s easy to get caught up in perfecting the plan, which runs contrary to the notion of failing fast. Instead, do your best to anticipate challenges, but then let the lab prove itself out to the greatest practical extent.
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