Sales Laundry

Archive for the ‘Corporate Sales Strategy’ 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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I was posed this problem recently so I thought I would open up discussion to you and get your input.  What is the best path to grow sales for this company based on what we know below?

A company is manufacturing and selling 25 different products.

Company sales are split approximately 50/50 between wholesale and retail channels.

Sales cycles are short, the company is on cash terms with most of its suppliers, but the five year old company is making a 20% profit annually on just under a million in revenue.

The manufacturing facility is at 100% capacity with no ability to outsource and does not enough cash/assets to leverage for expansion.

50% of company sales come from one product and demand is increasing.  The remaining 50% of sales is split evenly among the remaining 24 products.

Removing any one product from the lineup will anger some segment of the customer base and potentially impact sales to some unknown degree for every other product.

Cash flow is tight because the company is still paying off the last expansion and the largest customers want the company to extend Net 10 terms to Net 30 and some are asking for Net 60 terms on payment.

The sales team is being actively pushed to sell the entire product line every day.

You are hired as the companies first VP of Sales charged with overseeing a sales staff of 8 retail and 2 wholesale sales representatives and finding someway to get past these issues and grow the business to a point where the company can afford another expansion.

The existing retail sales staff is working at maximum capacity, and just able to cover sick days.  Customer service is at an acceptable level.

The wholesale sales staff is getting irritated because their income has been capped by the manufacturing facilities inability to increase supply, and competitors in the market are promising no such problems for sales staff working in their facilities.

If everything holds steady with no significant equipment breakdowns or cash expenditures, the President has told you it will be 3 years before the company can afford the necessary expansion.

What would be your solution to this problem and how would you grow the business?

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Big or small, we should all be actively working to prevent our products and services from sliding in importance for our consumers and being recategorized as a low priority as our customers retrench and re-shuffle priorities in this new economic climate.

What are you doing to raise your profile with your prospects and customers, compelling them to spend their hard earned dollars with you instead of sitting on the sidelines waiting for better days?

In this downturn, some huge companies are pushing new innovations to enhance the buying experience.  A few others are trying some far reaching ideas to connect with customers in a meaningful and personal way to gently nudge them into continuing to purchase their products.

Previously, I have written about what Kellogg’s is doing to make a bowl of breakfast cereal more important by tying breakfast cereal to our children’s education.  I have also written about Domino’s Pizzas use of technology to enhance the pizza delivery experience.

Today I noticed Microsoft paired itself with the infamous Jack Welch and Suzy Welch as co-hosts of a new online program (everybodysbusiness.msn.com) delving headlong into the problems faced by brand name (Hertz & Domino’s Pizza so far) businesses.  Jack and Suzy guide a diverse executive group in identifying some real challenges the company faces and then leverage the groups collective experience to find some legitimate solutions in a very candid way that makes you the viewer feel like you are sitting in the boardroom with them, watching and listening to an honest conversation you would otherwise never get to hear.

With the help of Jack and Suzy, Microsoft delivers valuable entertaining content that stands on its own, but still manages to drive the company message and squeeze in a stealth mini case study.  I for one am happy to report I did not feel like I had just swallowed a twenty minute Microsoft infomercial.

After watching this was I compelled to run out and setup a server farm driven by Microsoft products?  No, but I now understand in a subtle way that a lot of the technology Domino’s has in place across almost all of their stores, including their powerful online pizza delivery system is built on Microsoft technology, so Microsoft can probably handle the needs of my business.  I am not certain, though, how Microsoft fits into the Hertz solution by watching the show.

I just consumed a Microsoft case study reframed as (and rightly so) as a content rich business dialog with Jack Welch, and I enjoyed every minute of it.

Enough about Kellogg’s, Domino’s, and Microsoft, how can we make your product a more compelling purchase?  What can we tie your offering to that enhances you brand and ultimately sales?  How can we take a product that has dropped in priority with your buyers and get them snapping up your goods again?

I know several of you out there, so I am going to offer up a few ideas that will hopefully get you and everyone else reading this to expand your thinking.

Mortgage Industry. – Could you put together real/virtual seminars providing honest advice and resources for people struggling to pay their mortgage and help them save their homes?

If you could help me keep my home, or cross the great divide from renting to home ownership, helping me avoid the pitfalls along the way, you would earn my loyalty in a way the cheapest mortgage rate on Bankrate.com never could.

Copier/Office Machine Industry. – Every business of any size has some form of copier they bought/leased, right?  Could you setup business forums introducing clients that could benefit by doing business with each other?  Could you setup a lead exchange program identifying a need at one client business and passing that information along to another client business to potentially fill that need?

Bringing my business real leads and I just might be more likely to accept a slightly higher price for my supplies.  Real leads would certainly inspire my loyalty more than a cold-call walk-in four-legged (the new copier sales guy and his Sales Manager, typically) sales call ever could.

Can you think bigger?

Annual charity drives to collect reams of paper for a local school district or charity organization in your region?  Could you put together a toner cartridge recycling program for your city?  Have a big service fleet of vehicles?  How about delivering or augmenting Meals on Wheels efforts?

What about every other business?

How can you raise your importance to your community and the need for your product?  What programs or partnerships could you put in place to positively change the perception of your business and its support of your community?

Think out loud about your business and how you can raise customer loyalty and the priority of the problems your product solves in your customer’s eyes.

Think until you hear a “Wow” in your head, then tell me about what you came up with and let me know if I can help.

Q&A’s are excerpts of questions I have answered as part of Sales Laundry or other forums that I am apart of.  If there is a relevant sales message for the masses I post it here to share, gather feedback and discuss.

Q:  At what point does process become so overbearing that the sales person comes across as unnatural, insincere or insensitive? Conversely, at what point does style independence create disorder, chaos and inconsistency?

A:  A “Sales Process” should simply be a sales tool designed to get the greatest number of potential prospects successfully converted from “leads” to “landed” in the most efficient manner possible.

A “Sales Process” becomes overbearing at the precise point that it stops being a roadmap defining the most likely path for sales success and becomes an overriding dogma that must be adhered to regardless of customer, personality, situation or circumstance.

When adherence to the process becomes so important/rigid that the sales process itself becomes an impediment to the sales of the very product the process was built to serve, it is time for a change.

Conversely, a “Sales Process” becomes ineffective at the precise point that it stops being a roadmap defining the best path to sales success and becomes an exercise in “style independence” with so loosely a defined process that the process again becomes an impediment to product sales.

The rigidity of the sales process needs to be tuned to the product being sold.  Very knowledgeable customers making repeat purchases of commodity items could benefit by a very clear and rigid (to the point of being automatic, even) process.  The floor of the NYSE being one example.

Products being sold to customers with varying depths of knowledge or with wide ranging customer specific variations and infrequent purchase patterns require a more broadly defined “guiding hand” type of sales process, where listening, asking situation specific questions and conversation become more important than blindly following a rote process.

A well defined sales process should be malleable enough to bend to the needs of the product being sold and potentially the personalities selling it, as the product moves through its life cycle, anything else adds unnecessary friction.

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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Q&A’s are excerpts of questions I have answered as part of Sales Laundry or other forums that I am apart of.  If there is a relevant sales message for the masses I post it here to share, gather feedback and discuss.

Q:  Does sales training really work?  Why don’t more companies engage in training programs?

 A:  Does sales training work? Yes.

 In fact there is not a more cost effective way to convey massive amounts of information to a sales team over a short period of time.

 So, why all of the problems getting companies to sign up?

 Sales training works, but…

 If the person trained does not use the knowledge, the knowledge will simply leak out of their head.

 Which requires Sales Managers be trained and to reinforce the new behaviors with field sales coaching.

 Sales Managers do not typically do field coaching because it is almost never something they are held accountable for, so sales coaching gets bumped to next week  as call reports, expense reports, forecasts, etc. that they are held accountable for each week, get done.

 Changing the Sales Manager role requires Executive management to make reinforcing their sales training a priority and making sure Sales Managers have the time they need to work one on one out in the field, even if that means cutting some reporting requirements.   

 Frankly, most companies do not realize the extent of the changes that need to be made to their organizations to properly support their sales training efforts.  Many are not willing to put forth the effort in the long term to make lasting changes in their sales organizations and sometimes the required changes in their sales/management infrastructure are more painful than just absorbing the cost of the training and writing it off as a failed experiment and promising never to make the “mistake” of signing up for training again.

The companies that do build sales training into their culture do find measurable long term improvements in their sales organizations.