With the current level of economic turmoil, it is easy to find doom and gloom in the business community. In addition, the media requires news in order to sell advertising and bad news…is better than no news. So while corporate ethics and governance scandals, government policy gaffs and negligence dominate the headlines, why is it that management is sitting around wringing their hands and waiting, like Chicken Little, for the sky to fall?

Economic malaise is not a unique and recent phenomenon. We have had recessions in the past, bear markets and in the late 1990’s a complete restructuring of the business environment with the elimination of several layers of middle management. The corporate world did not come to an end. Recovery however, does not happen without strong leadership, vision, and in particular sales execution.

The typical corporate reaction to poor economic times is to cut. It is expected that when sales fall and profits vanish, that the prudent thing to do is to reduce overheads and align costs with revenues. This buys you time to weather the financial storm. However, in the current period of uncertainty, the length and depth of the economic downturn has been protracted. As a result, the law of diminishing returns is beginning to set in. When you cut… and cut… and cut, you reach a point where the financial impact of further cuts produces limited return. In fact, taking more resources out of the system reduces your ability to extricate yourself from the fiscal quagmire. Companies with outstanding products, great people and high debt are finding themselves in the Catch 22 position of needing to make short-term financial decisions to prop up their share price, in order to satisfy the financial analysts, at the expense of the future potential for substantial grow and shareholder value. So… where are we?

Finding the Window of Opportunity?

All of the economic indicators show evidence of increasing growth in manufacturing and consumer spending, which has tantalized investors looking for an opportunity to cash in on an expected recovery. Why then can we not shake the grizzly state of the market and get back to a “normal” commercial selling environment? Organizations are at a loss as to how to respond to the continuing poor market conditions for their products. They are looking for indicators that the bottom has been reached and that the prospects for growth are at hand. There is however, no one “holy grail” that can improve sales performance. Prior to the current economic downturn, CRM vendors would have you believe that putting in a software package was the difference between success and survival. Most of them are currently facing the latter. This is not to say that technology should not be part of the answer, it should, but it is not THE answer. The solution also requires good management and courageous decision-making. This means creating alignment between evolving sales strategies and the factors necessary to support execution of them. In addition, sales strategy, tactical execution, organization structure, accurate quotas and consistent performance measurement are all important factors necessary to achieve improved sales performance. Working harder is not the answer. Every senior sales executive will tell you that his or her staff is working harder and smarter than at any time in the past. A critical element of the window of opportunity that currently exists is however, to work… differently.

While there are some signs of growth, the results have not yet hit earnings and as a result, corporate budgets remain stagnant. This makes selling more difficult… but not impossible. It does however necessitate a very clear understanding of the market and a focused approach to selling. Remember, the “fat” has been trimmed to the proverbial “bone” at this point. To avoid wasting time and resources it is critical to ensure that any sales deployment will create much needed top-line growth with valuable customers. Taking any business, at any price, to “keep us going until the recovery happens”, only perpetuates the selling philosophy that “We can’t sell in this market”. Hogwash! The correct product or solution, properly serviced and supported, for the suitable customer… can still be sold for acceptable margins.

In their efforts to justify why the business is in the state that it is and to rationalize the lack of positive sales results, organizations are excusing unacceptable performance and poor execution and as a result, abdicating their ability to influence sales outcomes. While staffing levels and budgets have been slashed, there have been few if any changes to improve the quality of the selling effort. In good times, when the flow of orders and plant capacity are strained to meet the service ability of the company, nobody thinks about the soundness of the company’s sales practices. However, when times are bad the focus still has not been on improvement of sales quality but rather on cost cutting. In order to benefit from any economic recovery, companies are going to need to sell more effectively, as the competition is hungry for the same business. A window of opportunity exists presently, where “positioning” of the sales organization for top-line growth, will produce stunning results. So… what do we do?

Positioning the Sales Organization for Top-Line Growth

Since commercial spending is still not prevalent, one option is for the sales organization to wait until the recovery begins and there is strong demand for their products.  The problem with this approach is that economic recovery is a bit like the current in a river. While the waters are calm before you hit the rapids, you have room to navigate, and changing position in the boat is easier. Once the current starts to move faster and the water gets choppy, you have to react. Obstacles and changes in the flow of the river occur, the pace gets faster and the ability to change position becomes much more difficult. The current takes you along with it and instead of being able to control your destiny, you are swept down the river to wherever the current (or in business, where the market) takes you.

What does this mean to the sales organization?  The good news is that when the economic recovery comes (and it will, despite what you might be feeling at this moment), pretty much everyone will see sales increase and some of the financial pressure will come off. The bad news is that organizations that fail to position themselves for top line growth prior to the recovery, will find that they have missed the opportunity. These companies will react, they will hire, they will throw money at the situation and then accept whatever the resulting sales outcomes. They won’t even recognize the degree to which they have missed the opportunity. They are so focused on what they are doing now, they can’t even see alternative approaches. Some sales organizations have made the necessary changes to position themselves for growth, many others have not … some never will.

In order to position the sales organization for top-line growth, the following are areas that need to be addressed:

Segmentation and Focus
With reduced staffing levels and tighter budgets, the ability to provide effective account coverage has been stretched to its limits. With recovery will come additional demands to service accounts. Who gets the priority? How much of your resources do you devote to a particular account? The answer lies in the value of that account to the company. It is not however as simple as tallying the sales year-to-date and drawing a line above which you service and below you don’t. Rather, criteria need to be developed to assess all accounts relative to their potential for growth, opportunities for additional products and services and the maintenance and resources required to service them.

This does not mean a “cookie cutter” approach to sales. It means that certain consistent activities are part of a planned tactical approach to execution for a particular customer segment. The salesperson then customizes their approach to the individual customer based upon any unique needs. These criteria need to look at both short and longer-term potential and it needs to be tied into sales strategy. Without limiting the creativity of the salesperson, higher value or higher potential customers should get a greater share of their selling time. Lower value, low profit customers or accounts with less potential should be moved to inside sales or perhaps to a telemarketing solution associated with the expected outcome or sales results.

Segmenting allows the salesperson to focus on those accounts where the return-on-investment warrants the face-to-face selling effort. Establishing defined sales approaches allows companies to optimize resource allocation, ensure there is consistent treatment and guarantee that there is a common message to customers, all based upon the commitment the buyer makes to the selling company. This approach also facilitates the efficient training of new salespeople, which will be important as you add staff through the recovery period. The criteria used will need to clarify how and when accounts will change in terms of their treatment or servicing based upon their value to the company.

Volume with Margin
Depending upon the freedom that the salesperson has to discount or negotiate price, the balance between volume and margin becomes critical in each selling situation. The standard line from a salesperson looking for approval to discount is “If we give a little on price now, it will open the door for more volume and additional products later”. The only difficulty is that once the benchmark has been set, the expectations for price discounting are in place… and they won’t change. Recovery in the selling environment will not mean that price will stop being a factor. Rather, it means that you establish selling limits within which acceptable margins can be achieved. Incentive programs should be structured to reinforce selling toward the manufactures suggested retail price (M.S.R.P.), with reduced rewards for discounted sales, to align the salespersons objectives with those of the company.

While many customers have benefited from better pricing as a result of the tough economic conditions and the need to keep the business, when the time comes for rate or price increases, it is important to be consistent in the way that you implement the increases. Consistency is important since the credibility of the company is at stake if one good customer finds out that another is getting differential pricing. Clear rationale and a Minimum Acceptable Price (MAP) needs to be established that takes into account fixed and variable costs, selling expense etc. and establishes a floor below which the salesperson will not be allowed to sell.

The same principles regarding pricing and discounts that apply to the direct salespeople; need also to be established for those in the indirect sales channel. Clarity around pricing, discounts, rebates and incentives is imperative to ensure that the organization gets effective sell-through from channel partners to the end user. Dealers, distributors, VAR’s and third parties (agents, contract sales etc.) all need to understand and be aligned with your pricing strategies so that they can represent the product effectively without a lot of time spent on approvals and requests for special pricing.

Process Improvement
Making changes to improve the processes used in the selling effort offers significant benefits to the sales organization, but it is not an easy sell. At first glance, salespeople and management recoil in horror at the idea that you are going to force them to sell in the same way. They fear that you are going to remove their creativity, which is the core of their success (“We all sell differently you know!”). If the goal is to improve the overall performance of the sales force, then this is probably the area of change that will provide immediate benefits.

Certain core sales processes are critical to the success of the organization’s selling tasks. New business development, account management and forecasting are all examples of core sales processes. While some of the competencies that differentiate average from outstanding salespeople are personal qualities that affect sales performance, many relate to the degree of attention that is paid to execution of these core sales processes. Unless there is some degree of consistency in the processes used, then each salesperson is left to interpret what is the “right” way to handle these activities. Some will do an outstanding job because they have developed good sales practices. Others will struggle or consistently under perform because they either do not understand what is required for outstanding execution, or they have developed or been taught poor habits. It is possible to be very busy and yet not very effective. Improved sales effectiveness will result in higher close ratios as well as increased capacity to sell. To achieve improvements in sales process requires research, analysis and evaluation to identify the impact of changes on customer service and the return to the company. Many sales process initiatives make changes that improve cycle time or company productivity, but they negatively impact customer relations. The watchword here is “Do the job right the first time”. Spend the proper amount of time now to make the necessary changes and implement and communicate them well. It is time and money well spent.

To improve the efficiency of sales execution there will need to be smooth integration of interdisciplinary (e.g.: inside and outside sales) or interdepartmental (e.g.: sales and marketing) processes. This is an area where technology can play a role. In addition, the use of selling templates such as product PowerPoint presentations, letters, knowledge bases etc. will reduce the time spent creating and focus the salesperson on selling.

Infrastructure Alignment
The human element is a critical component of positioning for recovery. All the changes to processes and segmentation of accounts won’t produce the desired results unless the salespeople are committed, motivated, capable and knowledgeable. The company infrastructure programs such as recruitment, compensation, training and communications need to be aligned with the top-line growth objective in order to initiate and reinforce desired behaviors.

Improving the sales recruitment process can include the use of such things as competency models that identify the attributes of outstanding sales performers. These models allow development of recruitment questionnaires that provide consistent and fair assessments of candidates on an equal basis against a set of integral performance criteria.

Sales compensation can also be a critical factor in delivering the behavior necessary to compete effectively in a recovering market. Creating focus on selling “key” products and services, setting reasonable and achievable targets, and rewarding both the qualitative as well as the quantitative results provide support for good sales execution. The sales compensation plan design should emphasize these sales requirements. Couple this with targeted training to ensure that individuals in a given sales situation have the skills, knowledge and abilities to execute properly provides a potent combination for competitive selling.

A final and critical piece of the performance equation is communication. It is absurd to see the amount of time, effort and resources that are applied to repositioning and change initiatives that once designed, fail miserably because the communications effort is impotent. Well-conceived, designed and aligned programs are only effective when there is a common understanding and buy-in from those who need to execute them.

While the scope of the areas requiring attention outlined above might seem like a daunting task, it is manageable. The solution should be viewed as a transition plan to reposition the organization so that as the economy evolves and becomes more robust, the sales organization evolves through a planned approach to better take advantage of market opportunities and grow the top-line. So…what’s in it for me?

The Benefits of Positioning for Top-Line Growth

While each organization will benefit differently from this approach based upon their markets, product offerings and degree of commitment to change, the benefits of repositioning for top-line growth are substantial. Productivity gains include better utilization of resources and account coverage as well as reduced cycle time and as mentioned earlier, higher close ratios. From a financial perspective, providing pricing, margins and discounting are managed effectively, both top-line revenue and improved profitability will result. Finally, positioning to sell more effectively to customers will make the interactions with customers more efficient and with good execution, more successful. This not only means better service for the customer, but it will also result in improved customer relationships. So… what are you waiting for? The recovery is almost upon us.

Comments (2)

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about myself
written by rajeev, November 27, 2010

what kind of sales tips are these... i am training manager of a reputed call center in Nepal. Though my English is very poor while i was a sales agent i used to collect more than $25000 revenue only by myself while dialing in USA process. and i consider myself far more better than any authors or people who write these articles over here because i use some thing far more better than the tips out here.

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Sales & Marketing Director
written by Bruno Pierre Gebarski, December 22, 2010

Very well written and yes indeed beside all the CRM, PRM, ERP, HRM and SCM the intangible human factor is becoming more and more of crucial importance. Communication with customer is more than vital in order to identify needs for product development and new products / services. Questions do identify customer's needs and double checking with them if needs have been properly understood is one of the key factor towards coming back to them with the appropriate and custom made solution! Added Value! Showing that "we have done our homework" and "want to bring solutions on the table". This will make selling much easier knowing that "inside" service / product backup will be there if the changes must be implemented or new products developed. Long term client / Provider relationship will then cement at a much higher degree of trust and confidence. Follow me on Twitter: http://twitter.com/BrunoGebarski

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