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If you’re familiar with the concept of a sales lab, chances are you’ve heard of it in the context of a university or college. In these cases, it is usually a purely educational business that helps train students in sales skills.
In fact, there is another version that can benefit your business more directly. Beyond potentially creating larger revenue streams, it can also ensure the future of your business.
Whether you are a B2B or B2C business, a sales lab can be a real game-changer for your organization’s revenue and sales. This in-house company provides a hands-on classroom where your sales professionals can engage in intensive, experiential learning and experimentation.
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Everything is designed to improve their skills and help your business stand out from the competition, increasing your bottom line. Here’s a look at how a sales lab can help you do just that.
How does an internal sales lab work?
Imagine a company that provides full marketing support to restaurants, with three sales reps who qualify, introduce and entice new customers. Traditionally, the company charges $5,000 per month for its services based on the current economic environment and what competitors charge for similar work.
But what if our marketing company could charge $10,000? Chances are he would never try this on his own. The increase is too dramatic to risk losing an otherwise qualified lead for most people, at least not without proof that there is a market at that price.
This is where the laboratory concept would come in handy. Our hypothetical marketing company could give one of these three reps a reasonable compensation structure and have them work full-time on the challenge of selling the same package to targeted prospects at twice the price.
Two things can happen: either (A) in the worst case, the company gets strong support for its current pricing structures, or (B) in the best case, it doubles its average revenue per customer.
Building a mechanism for your sales team to experiment and develop new ideas, new messages or even new lines of products or services while guaranteeing them fair compensation means they are free to test radically and to explore possibilities without fear of losing income. In return, your business benefits from several advantages.
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1. It allows you to test innovative ideas
Following your competitors’ ideas isn’t necessarily a bad idea, but you’ll always wonder what more your business could do with a little thought. An in-house sales lab allows your experienced professionals to explore more innovative sales techniques. They can develop new markets, provide new offerings, and deepen your company’s understanding of its customers.
However, the usefulness of a sales lab goes beyond mere ideation. A dedicated sales team in the lab allows them to test these ideas, analyze the results and refine the approach. Your business benefits from this process through optimized methods and proven results.
2. It produces highly targeted results
You can research developments in your industry yourself or pay someone else to do it for you. As useful as this information undoubtedly is, it will always be second-tier to information developed exclusively with your business in mind.
Cookie-cutter ideas lead to cookie-cutter results, which means you’ll just be following the herd and never outpacing it. With a sales lab, your team can use their accumulated “inside” information to work on ideas and initiatives that particularly benefit your business. This is how you achieve your company’s business and revenue goals, not by chasing the pack, but rather by leading it.
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3. It creates the right incentives
A sales lab that empowers your top performers to innovate and be creative inspires them to achieve remarkable things. At some point, we are all a bit risk averse. This is particularly true when it comes to employment. Dedicated sales team members usually don’t want to risk their jobs by suggesting an untested, unproven idea. What happens in case of failure?
Instead, in a sales lab, participating sales team members know that company management wants them to take those risks and reap the potential rewards. In exchange, they know that failure will not result in a loss of position or status, so there is limited downside.
In fact, failure should be rewarded in a successful 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.
Tips for setting up your new sales lab
Instead of asking someone to work overtime, let some sales reps spend all their time on lab work. This creates a more conducive environment for creativity and brainstorming.
You’ll also need to find a structure that works for your business in terms of 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 defeats the notion of quick failure. Instead, do your best to anticipate challenges, but then let the lab prove itself to the greatest practical extent.
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