If you’re like most companies, you’ve spent the past one to two years trimming as many expenses from your P&L as possible. In the past, this meant trimming the fat. But this year, you needed to go deeper. Now you have a smaller organization but need to grow sales.
So, what do you do?
We have heard the following responses from CEOs to this question:
o “We only need to wait for economic recovery before we can be well-positioned for growth.”
o “We need better salespeople and/or managers to improve our talent.”
o “We must penetrate new markets.”
o “We must discount now in order to capture or keep market share.”
While we have seen many companies implement these strategies, few have seen significant improvements in their bottom lines. Let’s take a closer view of each.
o Waiting to see the economy…
It’s good news for everyone (including your competitors) if the economy picks up. Depending on which source you listen to, it could take two years or even two quarters. Recovery can take years, if not years, even after the recession has ended. Waiting for economic change to happen is an insecure strategy that depends on many factors beyond your control.
o Upgrading your talent…
It sounds like a great idea to replace underperforming salespeople with more sales-oriented people. This assumes you’re good at recruiting, screening, hiring, and motivating solid salespeople. How did you get to the position you are today if you’re truly skilled at this task? What have you done to improve your hiring abilities? Most companies will get rid of underperforming salespeople and continue to use the same process they used in the past to find replacements. After six to nine months, the company realizes that the reps have not made a significant improvement in the bottom line.
o Going into new markets…
New markets could be pursued. Many companies have considered going after new markets. We’ve heard from others that they have thought of innovative ways to adapt their products for new clients. Although this strategy may work, it is not something you can do overnight. These strategic changes are often slow to implement and require planning, research, and marketing efforts.
Many companies in this industry have become accustomed to discounting. Executives have told us that they have had to reduce prices more than ever in order to retain the clients they already have. While this practice can help you retain clients, it reduces profit and sets a bad precedent with your customers in the future.
So, how can you get more?
Change your behavior. Insanity is expecting different results by doing the same thing over and over again. You will always get the same results if you don’t make any changes to your team’s work methods. Change the way you do things to achieve different results. There are many things that must be changed. They need to be more active in order to generate more opportunities. However, they don’t have any performance system or sales manager who holds them accountable. Others require a proven sales process to allow them to win more customers. However, the sales manager lets each rep sell their way. Others need to develop their reps’ skills, but no one is developing them. Most often, sales leaders are too focused on selling and do not have enough time to lead and develop their teams.
Sales organizations that are well-run have systems and processes that allow their reps to succeed. They also have accountability that ensures everyone follows the company’s proven success formula. These systems are used throughout the company and cover everything, from recruitment and hiring practices to sales processes. They also include activity measurement and activity tracking.
So, how do you start changing your behavior?
To assess your organization and determine what you should do, ask the following questions:
Are you able to define a process for hiring, interviewing, and quality-respected employees?
The most successful companies:
o, Create detailed job profiles that outline the qualities and traits they are seeking.
o, Ask the interviewers specific questions about the job to determine if the candidate has these qualities.
Ensure that the expectations of the rep are clear about their duties and activities, how they will measure, who they will interact with, and so forth.
o, Conduct assessments to ensure that the candidate is a good fit for the job and the company’s culture.
o, Have a method to “score” the candidates instead of relying on a group’s “gut feeling” to determine who to hire.
These best practices increase the likelihood of hiring a successful employee who will stay with the company for at most two to three years.
Are you able to quickly get reps up and running with a standard training program?
Most successful companies have a formal training program that not only focuses on the products/services but all aspects of the sales process. This includes getting in the door, generating interest, demonstrating the value of the solution, positioning it against other competitors, and handling common objections. After the initial onboarding program, training does not stop. They will continue to be supported by their managers at every step until they are proficient.
This is not the norm. Organizations spend most of their time selling products. They send new reps out to make sales calls with “experienced” reps.
Are you able to demonstrate a proven, well-structured sales process?
Research repeatedly shows that companies that have a proven formula to take a prospective company to a customer (steps in a sales process) and adhere to it religiously generate 17%-22% more revenue per year than their peers. Many companies don’t have such a strategy. Instead, they allow their sales reps to decide how they will find clients, generate interest and what tools and presentations to use. Managers can then understand and coach multiple sales processes.
Do you measure the right things? Do you use those measurements to support your team?
Organizations that run well define metrics that are critical indicators of sales and are closely tied to their sales process. They track two to four milestones that show progress through the sales process, each increasing the likelihood of success. Managers set expectations about how many prospect meetings, demos, and demos each rep should have per calendar month. Also, what percentage of those meetings should be converted into demos.
These metrics are used to set activity standards and provide a diagnostic tool that allows the manager to assess how reps are performing. Managers can help reps who are not getting enough meetings to identify their target audience and create interest. Managers can coach reps on how to handle meetings that are not productive and how to do demos.
The majority of companies only measure sales results, which we found to be the case for most. While that is an important metric, it is not the final outcome you want. However, this is comparable to watching the scoreboard without making any adjustments.
Are you doing anything today to improve the skills of your staff?
Reps can do more than what they produce today. You need to make them better. Most CEOs are reluctant to invest in the development of their sales staff. As a cost-cutting measure, many companies in this economy have cut back on training and development programs. What is the reason? Most people believe that sales training for your team doesn’t work. Most sales training only provides temporary growth that disappears after a while. It’s also expensive and doesn’t provide an acceptable return on investment. Do you sound familiar? We couldn’t be more in agreement.
We believe that sales managers can teach sales skills directly, rather than relying on external programs or companies. Research shows that sales managers who are most successful spend at least half of their time coaching their reps. However, less successful managers spend more time selling themselves to their reps or telling them what to do.
Unfortunately, very few companies do anything to help their sales managers. A recent survey revealed that the vast majority of sales managers got their training from:
1) Figuring it out as they go
2) Simulating the actions of their boss
3) Reading books or
Ask their peers.
Most people never received formal training in how to transfer the skills they have used to be successful to others.
Are you able to motivate and support your reps?
Your company may have fewer sales, but this also means your reps are less productive. It affects their pride, income, and confidence. How do you motivate them to improve their productivity? Or do you place the underperforming reps in a performance plan (the most common solution offered by most companies), which can further harm morale and sales production?
Simple leadership strategies, such as publicly acknowledging wins, posting sales results, or giving personal congratulations to reps, can help create enthusiasm and momentum.
However, a lack of recognition or threat of termination can make the team even more demotivating. While there are certain times when a Performance Incentive plan is necessary, too many managers rush to this approach without considering other options.
So, what does this all mean?
If you answered “no” or more of these questions, it means that your business is not following the best practices. This could be a huge opportunity to increase sales with the team that you have. This requires some change. You must first create the structures and systems necessary to support this growth. Then you must teach people how to use that system to manage their lives.
This is the best time to take advantage of the opportunity to increase your sales team’s effectiveness!
Pivotal Advisors, LLC, a national sales improvement company, is dedicated to helping companies improve their sales performance by developing their sales managers. The best practices for managing sales teams are more effective than their peers and generate 17% more revenue. They also have 22% more team members who follow their plan. Leaders receive the tools, knowledge, and processes they need to implement best practices.
Pivotal Advisors has helped many companies implement systems that produce outstanding results. These systems have resulted in increased activity, higher win rates, and a more organized and planned way of doing business. The ultimate goal is increased sales and profitability.