Sales Laundry

Archive for the ‘Sales Management’ Category

Recently I was talking with a small business owner enjoying a degree of success growing his business from a one-man-band to six person shop and achieving a degree of local business notoriety.  Our discussion centered on talk of hiring a sales professional for the company and the owners exciting growth plans to take the business to the next level.

The owner was convinced that the correct course to grow the business was through a large expansion in products, markets served and by targeting larger customers that could buy in bigger chunks.

His theory was that with a significant expansion he could grab more revenue and tap new markets to avoid the risk of his primary revenue source drying up and foundering the company.

It was a reasonable line of thinking that I identified with even though it was a poor decision that could not have been more wrong.  I know this because I was guilty of the same mistake in a similar situation at an earlier point in my sales career.

I could not persuade the owner to look at a more focused strategy of measured growth or any other option for that matter, so I knew it was something I was going to have to pass on.  With any luck, maybe I can help you avoid a mistake that your business just may not recover from.

The biggest lesson I got out of my own personal foray into this folly was simply this:

Be the Master of Something or you will be known for nothing.

As a little, growing, cash starved business there is usually a strong desire, at some point, to throw sales discipline out the window and bend your little company around any and every opportunity for potential revenue you can find to survive.

Making that decision would likely be one of the worst decisions you could make, but I also know that over 50% of you will take that leap anyway because the alternatives will be too ugly to even contemplate.

It may seem counterintuitive, but the solution is to go narrow and deep, not wide and shallow.  Narrowing your focus to your best product(s), best prospects, building your brand, your experience and credibility in a niche you can own is the best strategy for success.

Look to expand after you have become Master of your Niche and can successfully leverage your hard-won market credibility into sales of your new offerings.  Having too many offerings or serving a large diverse market where it is hard to get traction will leave you Master of Nothing, unremarkable, swimming in a sea of mediocrity.

As focusing sunlight through a magnifying glass gets the attention of the local ant population, a razor-like focus on what you do best is the best way to burn through all the marketing and sales noise that can water down your message and drown out a small company.

What is the worst that can happen?

Typically this story ends one of three ways.

1. The company expands and expands to a wider range of products and offerings in hopes of capturing cash flow and the company ends up eating the people it was supposed to feed.
2. Continued expansion occurs until the sales, support or management structure collapses, damaging customer service, reputations and sales to say the least.  With any luck the smaller but right-sized company will begin to grow again at a more measured pace.
3. Miracles happen.

Three tips for the road.

Create a sales strategy to go deep, building brand, customers, and loyalty as you attract sales.

Manage your cash carefully to avoid potentially being forced to make poor decisions in a crunch.

Get known for something before your company and bank account are worth nothing.

Want to know more on the subject?  Drop me an email with FOCUS in the subject line.  val {at} saleslaundry.com.  As an extension, click here to learn how to multiply your existing sales momentum into more sells.

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Companies looking to hire key sales personnel in this recession should be excited about being able to pick up exceptional sales talent that would otherwise be unavailable in a better market.  However, what I am hearing from my friends and contacts is just the opposite.  They are telling me great sales professionals are just as difficult to find if not more difficult to find than ever.

Is your company facing a similar hiring dilemma?  Is your growth being hindered by your ability to find great sales people?

Then I will tell you the same little secret I told them.

Strategically I have always enjoyed selling into down markets as long as I was confident my number of sales professionals or department headcount would at least hold steady through the difficult times.

In down economic times I set a policy of continuous forward progress in the face of competitors buckling, retreating, cutting their sales force or taking other defensive steps.  Ideally when my competitors are pulling back I like to raise my sales headcount, increase our visibility and target key clients in a bid to gain marketshare from otherwise formidable competitors that have been temporarily knocked off their game.

If I am not in a position to bump my sales head count moving into a difficult economic period then I work through/replace my habitually poor performing sales team members (if I have any) with sales superstars that have found themselves unemployed for one reason or another and netting a stronger sales team as a result.  The key is knowing where to find them, and that, thankfully, takes me back to the point of this article.

The secret is that I do not place too much emphasis on requiring deep industry knowledge.  I find the exceptional senior sales guys in the market that already have the sales skills I am looking for, sans the bad habits, and teach them what they need to know to function.

From my experience it is much easier to convey product and industry knowledge to a smart, skilled salesperson than it is to convey the subtleties of sales to a “newbee sales toad” as one of my engineers used to refer to them.

There is no reason to shy away from older/experienced or out of industry sales reps.  As long as they still have that hunger to sell and have not been ruined by too many years of poor sales management, these guys are gold mines.

Ease your “must have” requirements for new candidates.  Requiring new candidates come to you with an established contact list, precise industry experience, a specific number of years of experience and exceptional selling skills is a tall order under any market condition and severly limits the candidate pool to the point of being too restrictive to allow you the flexibility to build your headcount and mentor them to take advantage of favorable market conditions when they present themselves.

Hire for the right character, sales training and ability to listen/learn and ignore the grey hair and non-industry experience.  I think you will find, like I have, that your industry/business is not that hard to learn and that a good hungry sales professional that can find the right contacts and get in the door can sell just about anything.

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Remote sales offices are established typically with the single purpose of growing new markets and revenue sources for the company.  Anything that hinders that mission is by definition hindering company growth and impeding efforts to grow revenues.

With that in mind I have put together a list of common mistakes I have seen repeated many times so you can at least recognize and correct them or at best avoid them.

Mistake 1:  Not enough support resources.

This mistake is almost always preceded in a sales meeting by the phrase “You sell it and we will figure out how to deliver it/get you the resources to get it done.”

As an employee in this situation a giant flashing light and klaxon should go off in your head warning you of the impending danger.  Negotiate for specific technical resources with timeline commitments before you accept the position or ask and understand how your sales efforts will be supported.  If it does not pass the smell test in explanation, you should never expect it to pass the smell test in execution.

As a company, you risk damaging your reputation, losing customers, destroying your remote sales teams integrity in the market, and doing irreparable damage to the remote teams morale by failing to execute all post sales responsibilities.

If a company cannot truly support a remote sales team that is going to need company resources to deliver the products and services they are selling, the company is better off not opening/closing that field location and terminating/relocating that sales resource to a market the company can support with certainty.

You cannot fight a war to win revenues without establishing clear lines of support.

Mistake 2:  Treating every office the way you treat the home office sales team.

Remote offices are almost always setup to expand the corporate empire based on the success of the home office.  It is a massive mistake to manage a new office in a new remote city the same way you manage your home office sales team.

In your home city it is likely that your company has established a certain momentum aiding ongoing sales efforts.  This momentum is often a compilation of several factors including having an established local brand, a number of years in business, culture, established customer base, local references, local advertising and publicity, tradition, and typically, local ownership ties.

It is a fundamental mistake to set across the board sales targets and objectives for the sales teams facing radically different established momentum.  This is not a matter of simply waiting for a new market sales resource to ramp up, it requires a fundamental change in how you attack that market.  (See Mistake 3.)

Mistake 3:  Not understanding the unique requirements of new markets or of markets in different stages of development and managing them all the same.

In establishing a remote office, a company is typically:

Expanding into a new market where their services have not been offered before.

Opening a remote office around a key client.

Opening a remote office to manage some existing accounts with hopes for growth.

Making a tactical decision to rapidly expand, block a competitor, arrive in a market ahead of a competitor or grab a key location.

The strategy for every office needs to be unique to its individual market situation.  Even McDonalds, with world wide name recognition and a reputation for producing a consistent product makes adjustments to their menu and process based on the unique qualities of the market they are entering.  Want to see how McDonalds has adapted?

In a new territory where there is no name recognition, I focus on territory planning, earning core anchor accounts that can be used as references, and deploying heavy support resources to make sure the first few engagements are successful ones to make sure the first few steps in a new market are solid ones as we begin to build our name.  That is radically different than my market approach with the home office.

Match management focus to individual market needs to establish remote offices in new territories.

Mistake 4:  Expecting remote office staff to be able to generate the same volume of reports/ admin/paperwork as the home office.

Where there are sales professionals there is paperwork.  Expense reports, pipeline reports, call reports, travel logs, presentations, proposals, RFPs, etc.

While there may be a standard procedure for preparing and completing necessary paperwork don’t automatically assume that what works for the home office is even necessary or will work for smaller remote offices.  In many cases there are additional official or unofficial support resources that assist in keeping the sales machine running in the home office.  Burdening a remote office with excessive admin requirements can destroy morale and limit their time/ability to do what the office was established to do, sell.

Mistake 5:  Micro manage remote resources.

In retrospect, I probably should have put this one first because this has been the death of so many remote sales organizations and the HQ based managers that are tasked with managing them.  Micro management has no place in managing remote sales teams.

Yes, the remote sales team is going to be out of the daily purview of management but that does not mean there needs to be any extra controls put in place to make sure they are doing their job.

In fact, there should be far fewer controls on them than there are on the sales team at HQ.  If you want the specifics of why, send me an email and I will break it down for you.  Pick four or five metrics preferably built into existing sales reporting tools to use to manage your sales team.

It makes no sense to try and manage where the remote sales team is and what they are doing every minute of the day.  If your sales team is making their numbers legally and ethically, who cares where they are.

If some team members are not making their numbers, use activity metrics and their call ratios as a comparison to determine where/why they are struggling.

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I have managed remote offices, opened remote offices and carved up new territories and can tell you from personal experience that there seems to be a tendency to treat remote sales offices as somehow of lesser importance than HQ.  Perhaps that is because of the revenue disparity between the established home office and the developing remote office or the lack of daily interaction, I am not sure.

Remote offices are your growth strategy.  Remote teams should get at least the same amount of attention as the home office sales staff, but in truth I think that a remote office team needs more ongoing attention to run at its peak.

We nurture babies more than adults.  We tend to the needs of puppies more than the adult dogs they become.  We pay more attention to young plants than we do old established trees they grow to be.  That same methodology should be applied to growing and managing remote offices.

Bonus:  Mistake 6:  Putting inferior equipment in the remote office.

At home when you buy a new television for the living room, what happens?  The old living room television moves to the game room/ master bedroom, the old TV there moves to the kids room, the old TV there moves down to the garage and anything left over goes to a garage sale or charity.

While this works at home, this is not a successful strategy for equipping a remote office.  While giving your remote sales representatives the older laptops and cranky office equipment replaced at HQ might seem like a good strategy to reduce the cost of establishing a new office and extend the life of assets that have long since been fully depreciated, it is really a strategy that can limit your new revenues by far more than any initial savings.

When one of those cranky pieces of equipment breaks, the impact to the remote office can be significant because often the people/time/money resources are not there to bring the equipment back online again in a timely manner.

At the home office there is, in many cases, a non-sales resource that can manage the repair process.  You would never think of having your best sales resource spend the day at the office waiting for the copier repair guy, so why relegate remote sales resources to that fate?

There is so much more to say on this subject, but if I could only say one more thing, it would be this.  View your remote facilities through the lens of trying to unburden them of the functions, procedures and paperwork that get in the way of their ability to deliver on their intended mission and you will watch a struggling cost center become a flourishing source of profit.

Then, turn that same lens on every aspect of your sales organization.

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Who is managing your sales force, your Sales Manager or your compensation plan?

If you said your compensation plan, the good news is you are in the majority. The bad news is your sales could likely improve 15-20% with a solid Sales Manager steering the ship.  Neil Rackham , in his book Rethinking the Sales Force: Redefining Selling to Create and Capture Customer Value, would say 17%.

When I find a Sales Manager that is giving honest effort but is not effective, it is usually because of one of these reasons.

1. The Sales Manager was your best sales professional and is still your best sales professional. Management? What management?
2. Most companies have a training program in place for new sales professionals and executive management, but few utilize any formal training for their Sales Managers. As a result, Sales Managers have no tools to help them manage the revenue production arm of the company, and run solely on gut instinct.
3. Sales Managers have a responsibility to complete a myriad of reports every week, with consequences for not getting them done. There is usually no compelling reason to make time for training or coaching exercises, and as such they don’t get done.
4. The Right Now. Sales performance is often measured on 30 day – 90 day increments on products and services with sales cycles that are much longer. No one dares to take their eye off the sales ball long enough to build in team development time.
5. The Sales Manager compensation model is out of line with company and/or the sales teams defined objectives.

Here are the first five tools I drop in my tool box when I am headed out to fix Sales Management related problems.

1. Put a “sales Manager” instead of a “Sales manager” in charge of your sales organization. Having the wrong person or personality type in the Sales Manager role is more often than not a significant part of the problem.
2. Train your Sales Manager. If you don’t have the budget, think of what an additional 15%+ in sales could do for your business.
3. Build training metrics into your Sales Manager performance measurements and make sure his/her workload will allow time to get the job done.
4. Build a model of continuous improvement into your sales process, making sure you do not shortchange your sales team’s growth and long term revenue potential for short term sales targets.
5. Align the Sales Manager job and compensation model with company goals to make sure a Sales Manager is watching and responding to the objectives and issues that are important to the company. Tie your Sales Managers compensation to the sales team and/or the sales professionals he is responsible for.

I want my Sales Manager to take care of his customers (the sales professionals he is responsible for) and keep the road clear of obstacles that might prevent them from doing their job.

I want my Sales Manager to be my eyes on the front line, making sure we are allocating our sales resources in the most efficient way possible to engage prospects and that he has and will use his authority to make necessary changes on the fly.

I want my Sales Manager continually engaged in enhancing or reinforcing the skill set of the sales team and identifying new ideas and best practices discovered by one sales professional and incorporating them into the entire sales team.

Put your Sales Manager to work growing your business instead of growing the stack of paper in your in-box. There is typically not another person in your organization that can have as much immediate impact for the dollar on your front line sales team as a well trained Sales Manager.

Have any Sales Management best practices or unique signs of spotting trouble?  I would love to hear them.

Image courtesy of  lumaxart

In training new people to become sales professionals and developing them into successful sales teams, or building sales engines as I like to call it, I have found that how you allocate your sales team is just as important as the training and development that gets them ready for a sales career in the first place.

The default way to allocate sales professionals seems to put the strongest relationship builders and highest income earners on the largest companies/named accounts in a territory, and then allocating the balance of the sales team in support of those large account representatives or scattering them across the remaining territory, engaged in outside sales, inside sales, or sales support typically based on their years of experience.

This approach can anger and annoy customers and prospects alike. This method can also be an incredibly inefficient way to field a sales team that unnecessarily raises Cost of Sales.

What if we divided sales teams not by the size of the customer but by the way a customer prefers to buy?

Your company has customers that could care less about your sales team or interacting with them because the customer knows your products and their applications as well as you do, perhaps better because they interact with your products every day. Does it make sense to deploy a “relationship building” sales professional or a dedicated sales team to this large customer and raise your Cost of Sales by providing your customer sales resources they do not want or value?

Nope.

Regardless of the client’s size, if they are ultimately only concerned about bottom line cost, then provide a method to purchase for them that meets their needs. Let them order through an inside sales representative or build a nice functional online purchasing mechanism that makes sense for you and will let them do business with you in a way they prefer.

For those clients that value the expertise of your sales professionals, big or small, deploy your relationship builders and subject matter experts, delivering the products your customer needs and the support the customer values and is willing to pay for.

If you are thinking ahead a bit, you might envision a scenario where a very expensive relationship building sales professional could be assigned to a small opportunity with a company valuing your expertise that could be as wildly unprofitable as anything we have mentioned previously.

Your right. So, don’t do that. You need more than a sledge hammer and a flyswatter in your bag of sales tools. Allocate internet sales, inside sales, junior account managers, senior account managers, Subject Matter Experts, Field Overlays and your Sales Top 10% where it makes the most sense for your customer and the most profit for you and your sales professionals.

The one guiding principle of this model that needs to be understood is that regardless of how sales people and resources are deployed, they must meet or exceed the accepted level of service the customer requires. Under deliver and you lose the customer, exceed their expectations beyond the point of where a customer cares and you are unnecessarily raising your Cost of Sales again.

Before you begin a full sales retreat and cut your head count or risk alienating your customers by trying removing some of the perks customers have come to expect from a relationship with you, I urge you to reassess how you sell your products. Is it possible to cut your Cost of Sales by reorganizing your sales team to sell the way your customer wants to buy and continue to grow your company while your competitors are running for cover? I don’t know, but I certainly hope you will tell me when you find out.

Image is the sales team for Microbizz and provided by Microbizz.

Remember when you only had to find and fill a Need to get a sale?

 Remember the good ol’ days when the sun was shining and everyone including our clients were augmenting their budgets with bags full of cash that randomly fell out of the backs of garbage trucks, freely spending bucket loads of money on big, medium and small needs alike? 

Me either, but don’t tell the new guys.

Today, clients aren’t spending their money so freely and sales are down, but the good news is we are saving a lot of money on printer ink because these forecasts are just so much shorter.  Apparently the majority of our clients do not have any needs that need filling right now, so what is an enterprising Sales Representative to do?

 Stop looking for needs.  Start looking for agony with flaming critical, heart ripping consequences.

 Corporations are the legal equivalent of people, so if it helps, look at them that way to get a better understanding of how to approach them.  Think “injury” here.  

You can live without a Band-Aid, it may not be as neat and tidy, but you can live.  Think bigger.  Start looking for companies in Intensive Care Units, needing your product in order to survive.  Those needs will get addressed, because if they don’t fix them, they die or face catastrophic game changing consequences.

 “But Val, I sell fly swatters, if they don’t buy my product the worst thing that happens is there are a few more flies buzzing around, how does that help me?”

 Maybe you change your message from “Get rid of an annoying pest” to “Avoid diseases that flies transfer from dung heaps and decaying matter to your food that can lead to kidney failure in young children, seizures in toddlers, or in some cases, death*.”

 If your customer’s are not buying, it is because the need your product is filling is not a real or percieved priority right now.  Change the priority, change their perception, find a client with a bigger need you can fill, or find something else to sell.    

Want another example?  Look at what Kellogg is doing to reposition Mini-Wheats.

If you are stuck and can’t think of any deeper problems, add a comment and I will give you my best ideas, otherwise watch for a post in the near future that will detail a step by step process to help you find those deeper problems.   

*I am not making this stuff up.  Read Diseases from House Flies.

From my experience, most companies don’t know their sales department is dead until they begin to smell the corpse and see their sales numbers fall off a cliff into Lake Competitor.

 It has been my job from time to time over the years to identify sales issues, diagnose sales health and return these sales organizations to top form.  As a result, I have learned where to look for the signs of decay.  Here is a rough version of the roadmap I use to find the problems.

Sales Metrics

 How are the Sales Managers measuring their existing sales team’s performance?  More often than not, I find that the sales organization as a whole is only using one sales metric consistently, final sales numbers. 

You can’t steer a dog by its tail and if you try you will eventually end up stepping in it.  The same is true of the Sales department.

 The final sales numbers should not be a measurement tool because it is too late at that point to do anything about it.  Final sales numbers are only a gauge, measuring your sales success for one moment in time.  No different than a customer survey or comment card after a sale measures overall customer service on a single sales transaction.

 A good sign would be to see multiple sales metrics in place and seeing Sales Managers actually use them to manage their business.  (CRM packages setup and used properly are a great source of information assuming the stored information is current, complete and accurate.)

The Sales Managers

 If the metrics are out of whack or missing I look for the Sales Manager to understand how he is managing his team and how he reviews his sales pipeline.

 Typically I find that a struggling sales department has a Sales Manager that is spending too much time looking at the bottom of the sales funnel or has never been trained how to  measure his team’s performance.

The Forecast

 The next stop is the individual forecasts of the sales team, present and past if available.  I want to understand how leads are collected and the process determining how a lead is converted to an opportunity and how it moves its way through the system toward a close.  I want to know what specific information a sales representative used to rank every opportunity on his or her forecast.

Usually this will tell me there is no consistent process for converting leads in place and the present standard is a combination of guess work and wishful thinking.

 I also want to understand what they are selling and equally important, what they are not selling and why.  This helps me understand what other departments outside of sales I need to visit.

Sales Training Process

 A look at sales training is next on my list.  How are the sales representatives being trained?  What methodology are they using?  How do they get trained on new offerings?  How have they been trained to manage opportunities through the pipeline?

The Services, Support & Systems Engineers

 Next I want to meet with the services manager. I want to understand how he decides what he will train his staff on, how they maintain certifications, how skill sets are allotted to the various offerings the company sells, and if there is communication with Sales to keep them in lock step with what Sales is actually selling. 

The Marketing Department

 The marketing department, if there is one, is next.  I want to compare the message Sales is sending with the message Marketing is sending.  I also want to understand how they coordinate their efforts in the end goal of bringing in more business.

C-Level Executives

 I want to understand the overall company direction.  What are the company objectives?  What are the company commitments to vendors and distribution relationships?  What is the company sales message? Etc.

Summary

 Decay in a sales organization can come all the way from the top, manifested in bad policies or poor communication that puts various departments in isolated silos.  From my experience it is the well connected CEO, or oddly enough the lowly Sales Manager that is in the best place to diagnose these problems internally.

 In the early days I only looked at the Sales department but as I worked through the challenges I began to expand my scope because many of the problems manifesting themselves in Sales I found were created by seeming innocuous decisions made in other parts of the company.

 If your sales department is inconsistent, struggling or darn near dead, look at the quality and quantity of your leads, analyze your forecast, focus on managing the top of the sales funnel and take this list and use it to find the root cause of your problem, don’t get caught up treating symptoms.