A formula for building up sales

 

We haven’t had good experience turning things over to salespeople. We give them leads and they don’t turn that into business. Later on we find out that they didn’t do a good job on following up. Or they followed up but couldn’t turn the lead into a sale. Not sure how to better manage this.

Thoughts of the day: Your job includes managing both salespeople and sales activities. Make sure that you have the right people in place doing the right job. Save time and effort by knowing the profile of who you want to sell to. Get salespeople involved in the effort so that they place greater value on the leads. Check out the ROI on sales activities.

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Think like a detective when it comes to sales

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When it comes to selling, I’m figuring out that I have to think like a detective and not a typical salesperson. Do you have any suggestions on how to best do that?

THOUGHTS OF THE DAY: Decide on who is your best customer, then go get more of them. Work through a list of best customer suspects. Figure out where your targets hang out. Find out if you really are talking to qualified suspects. Have a way to circle back to the suspects who don’t seem to fit initially. Get prospects to turn themselves into clients.

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Don’t Hope for the Best, Plan for It

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Trying to figure out what we can really count on for sales this year. Struggling with optimistic estimates and timing. People get excited when they talk to new prospects, and we’ve lost our share of “sure winners” we were certain we’d get. If we do close on a project, saying it’s sold doesn’t mean we can invoice it right away. It can take months between invoicing and when we get paid, and we don’t even have the client signed yet, meaning we can’t bank on anything. How can we possibly plan for growth under these circumstances?

Thoughts of the Day: A robust sales function is essential to the growth and development of every company. Not everything you expect to sell will close, that’s where probabilities come into play. Figuring out how to focus on the likely closers, instead of wasting time on the sexy ones will help everyone feel more successful. It’s a matter of dividing the sales job into smaller buckets and then tackling each one separately. Having more than enough possibilities allows your company to choose the best.

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Take Sales Goals Seriously to See Results

We’re not going to get as much growth this year as we needed. The goal was a pretty conservative multiple of last year’s number. Our customers are mostly doing better this year than last, so I was pretty sure we’d be okay. And now it seems we’re not okay. Where did I go wrong?

Thoughts of the Day: Sales goals set at the beginning of the year – that’s only step one of a year-long campaign. Achieve your plan for the future by looking forward. Make sure everything lines up to support the plan. Stay ahead of the game by thinking strategically and implementing tactically. Constantly manage sales. Make adjustments throughout the year.

Some of business owners go through an annual planning process. Some owners take a stab in the dark, guessing at how things will go in the upcoming year. Some owners shy away from planning, assuming there’s no way to control the future. Some are too tied up solving immediate problems and can’t afford to take time out to plan.

If there is a plan, often a quarter goes by, sometimes a whole year, before the plan gets checked up on. Everyone gets busy. Things look good some months. Band-aides get applied to the slow ones. Maybe the target becomes reality, maybe not.

Instead, set the goal, inform everyone in the company of the mission, and their role in helping to achieve that mission. Make sure that every department has a way to report on how they’re doing relative to the overall company goal.

Start a dialog. For example, how many units does everyone in operations have to produce and deliver to hit the annual goal? Does the operations department need additional equipment, staff, training? How many new customers does sales have to find? How many existing customers need to expand, by how much, and who’s going to do that? Who is most likely to fall away as a customer, who is most likely to come on board? As the company’s revenue grows, how many additional employees will be needed? Who is responsible for tracking and analyzing numbers? What reports does everyone need throughout the organization, so they can know if they’re on track, or not.

The time for discussion about what it will take to hit the sales target is before the year kicks off. And every department needs to participate in that discussion. Get questions answered, take reservations off the table, so your company hits the ground running.

Start to plan by defining where you want to get to long term. Then work backwards. Want to double the business in 5 years? It’s easier than you think. Want to exit profitably with enough money to live well in retirement? Figure out know how much time you have, how much money you’ll need, and how many risks you can afford to take.

Decide how fast you want or need the company to grow. 10% – 15% year over year growth rate is healthy. Line up the resources to do that.

Stay ahead of the game by thinking strategically and implementing tactically. It’s not so much about getting more revenue every month. Maintain the peak volume in the peak months. Fill in the holes of the down months. Constant revenue leads to constant profits. Set aside time to plan out how to do that so no one has to react at the last minute.

Treat sales management as a daily game. Hit yesterday’s goal? Great. Now hit today’s. Missed today’s goal? Ask sales to make an extra call on the way home tonight to ask for an extra order. Quickly correct small misses.

Ask people in sales to plan their time, their accounts, their sales, to match the company’s overall goals. Ask marketing to provide more support if things get behind, and to stay on it until things get caught up. Make sure operations and sales are working as 1 team to sell and deliver what they both can live with.

A month can go by in the blink of an eye. Use weekly meetings or conference calls to share information. Doesn’t have to take an hour. 15 minutes can help everyone to maintain focus and plan out where to go when they need help.

Treat the company’s sales goal as absolute. Think about making a trip. You probably wouldn’t be satisfied if you set out to on a trip, but had to stop half way because things went wrong. You’d probably keep checking on progress and solving problems until you got where you wanted to go. Deal with your sales plan the same way.
Looking for a good book? Selling Against the Goal: How Corporate Sales Professionals Generate The Sales They Need, by Kendra Lee.

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Getting Prepared to Handle a Surge in Sales

Sales opportunities are opening up – more than we’ve seen in a long time. I want us to get as much new sales as we can while things are looking up. My big fear is we’re not prepared to handle all of what we’re getting an opportunity to bid on now. If too much hits at once we could be in trouble. How can I best manage the risk and keep my sales people focused?

Thoughts of the Day: It is sales’ responsibility to make the right sale, not just any sale, in order to boost margin, ease production stresses and insure timely cash flow. It’s always good to have more opportunity than you think you can handle. The big question is, what’s going to turn into business and what isn’t?

When markets are scaling up is when a company is likely to face its biggest sales risks. Cash flow is likely to dry up as the company boosts production in advance of collecting payments for new sales yet to be delivered. Switching emphasis from one product or service to another can be risky: the company has to have the right materials and workforce in place in order to deliver. Costly mistakes can result when switching production. Big volume customers may negotiate for discounts that the company can ill afford to hand out, while the sales force just looks at the bigger volume as a win.

The company needs to be fully prepared for a surge in sales. That includes getting the mix of business right and making best use of resources the company already has on hand. It means having a plan the company can afford to implement to get additional production resources in place. Reserve funds are needed to get through the upsurge as the company waits to receive payments for goods and services received – that demand often comes as the company recovers from a low income cycle that drained reserves.

One recent survey noted a gap when assessing confidence in the sales forecast. Sales, corporate management and marketing tended to believe in the sales forecast. Operations and finance tended to be skeptical. All agreed that a more accurate picture would increase revenue and profits.

It’s not enough to just forecast revenue. Sales has to become more accurate at forecasting what type of revenue. Sales also has to do a better job of predicting when risks to achieving a specific forecast are likely. Operations depends on accurate sales forecasts to buy the products it needs and hire the staff required to get the product out the door on time at the lowest possible cost. Last minute shifts from one type of sale to another can disrupt production and result in lower profit if parts are not used or skilled labor is in place for the wrong product or service. Finance needs time to line up reserve funds – it can take weeks or months to get an additional credit facility in place.

Sales has to develop discipline around the opportunities it’s going after. Most sales people understand they’re not going to close everything they bid on. What many sales people don’t get is that the company may do better by walking away from some opportunities, even if they seem easier to close.

Loads of opportunity in the sales pipeline is a gift, if it’s used properly. A good sales team will talk to hundreds of prospects, focus on those that want what the company can deliver, know what to walk away from because it will be problematic. To make those decisions, sales needs to be in constant communication with operations and finance regarding what will be easier and harder to handle.

The sales organization spends most of its time focused on the external. What do customers want? Who will buy? How to keep sales peoples’ attention on opening up relationships with more prospects and working on the best opportunities to close?

Sales also has to be focused internally. Sales, operations and finance have to work hand in hand to comb through the raw materials and finished good available for sale, and to understand the workforce skills most ready to deploy. Knowing which customers to prioritize because they pay well, and which to minimize because they are risky is essential. Knowing how to price an offer to a customer taking those variables into account is even more critical.

Sales management is the conduit between internal resources and external opportunity. The sales team can increase the company’s profits by knowing what the company is best able to produce and adjusting proposal pricing to account for risks and costs related to shifts in production and customers.

BOOK RECOMMENDATION:
Looking for a good book? Setting Profitable Prices: A Step-by-Step Guide to Pricing Strategy – Without Hiring a Consultant. by Marlene Jensen

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