Sales: The real bottom line

A recent discussion prompted me to come back to a subject I hit every few years in these pages.

A few weeks ago while working with a new client in Nebraska, the VP of sales lamented to me over coffee, “I’ve got this gnawing feeling that my salespeople are spending too much time on sales opportunities that we’d win pretty much just by being there.”

She went on, “And they pour a boatload of resources into deals they have no chance of winning. Or, if we win them, we wish we hadn’t,” she added. “Meanwhile, our hit rate on deals within our control is only so-so. We don’t seem to leverage our customer base for growth, we’ve had three important customers defect ‘for no apparent reason’ in the last year and I’m forever dealing with their whining about our ‘high prices.'”

It was just too tempting… “Aside from that, Mrs. Lincoln, how did you enjoy the play,” I wisecracked.

She was on a roll and didn’t hear me.

“It’s not that my salespeople don’t work hard, we’ve got proposals up the wazoo,” she said. “They’re responsive, know the product, and they’re all great at relationship-building.”

Phew! Before our lattes were cooled enough to sip she had articulated everything that needs fixing in her – and many other – sales organizations. Indeed, she had – practically in one breath – articulated everything a sales force can do (but wasn’t in her team’s case) to bring value to their own companies.

She and I have our work cut out for us. But I believe we will get it done. Why the confidence? Because we know where we’re going and how to get there. 

Measuring the return on a sales force

I believe the starting point to any effort to elevate the performance of a sales force is to define just what the sales force’s role really is. How the sales force contributes value to the company.

One of my favorite ways to open a meeting with a group of salespeople is by asking them to complete the following sentence: “In any company, salespeople exist to…”  Some form of “get business” seems to be the most common response. Not far behind is something like “build relationships.” My favorite has something to do with their “special art.”

How would we like them to complete that sentence? Simply with, “…contribute profitable revenue to their own companies.”

So how do they do that? Is it by getting customers to give them a “last look?” Perhaps, but only if you define your company’s financial gain in terms of being the low bidder as often as possible. Do they do it by responding well to customer needs? Arguably, but we are talking about sales here, not customer service. If responsiveness is a key component of value, then the job is edging dangerously close to service. Don’t call it sales.

Is their value contribution in building rapport with customers? Many salespeople might have us think that it is. That is, until that deal that was “in the bag” goes south despite the “great relationship” between salesperson and customer.

We are in an era of results; an era of measurable value contribution. Could, say, an engineer, a shop floor manager, or an accountant claim that his or her value falls into the category of “special art?” Hardly! Why should salespeople be able to make such a claim?

As Liz and I work to improve her sales force we will be very clear about their jobs. They exist to contribute profitable revenue and they do so in four ways. Period!

Helping customers see beyond price and competition: Perhaps the hardest thing Liz has to communicate to her sales force is this: “If you see your role as telling us where our price needs to be to win the business, the company doesn’t need you!”

Creating revenue opportunities: Among the more universal laments of sales leaders has something to do with their people being too reactive, waiting for opportunities to come their way. The great untapped revenue creation potential for many companies exists in three areas: cultivating growth opportunities in existing accounts, engaging customers earlier in the buying cycle, and expanding the scope of the stated opportunity. 

Committing company resources according to potential return: Great salespeople assess opportunities with brutal objectivity and act on that objectivity. They deploy resources in such a way that the opportunities with the greatest potential and highest “win-ability” get the most attention.

Contributing to customer retention: It’s cheaper to keep a customer than it is to get a new one! This, of course, is one of the great truisms of selling.  Another truism is that most customer defections are a surprise to the salesperson, and usually have very little to do with poor service, product quality or outdated technology. Why then, do customers defect? In a word – change! Usually, it’s a change in the political environment. But it could be a change in lots of things: supply chain strategy or business environment to name just a few. Salespeople can miss these changes because they often limit their focus to meeting day-to-day needs of customers or looking for that next order.

Use these four value contributors next time you develop goals and measures for your sales force. 

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