Trouble with Sales? It Might be You.
This is article is part of a series of monthly articles produced by Harbour Results for PMA’s MetalForming Business Edge e-newsletter. Click here to view the full collection of articles.
“I need to fire all my salespeople.”
“I need to fire all of my salespeople!” is the plan I’ve heard from more than one entrepreneurial business owner who was frustrated over a lack of profitable growth. If that thought has crossed your mind, then this article is written for you. Before you clean house by throwing out your salespeople, only to be frustrated again with the next batch hired, you may wish to consider that maybe it’s not them but instead something else within your business. Below are four common symptoms that can lead to poor sales performance, even with stellar salespeople.
The Symptom of Galaxy-size Targets
All too often the sales staff is given extremely broad and vague directions, such as “Go get agricultural business.” The word “agricultural” may be replaced with any other broad market name. With that as the only direction or definition, the diligent salesperson then brings back anything and everything associated with that word in a hope that something will be won. The salesperson tries to figure out what the target is through “The Spaghetti Test:” throw everything against the wall and see what sticks. As a result, the quoting activities are wasting time working on things that cannot be won, the organization doesn’t gain customer or product knowledge, and the salespeople do not learn a particular customer’s buying sensitivities against which to demonstrate their employer’s differentiated value.
The Symptom of Perpendicular Perspective
This is a case when the salespeople bring in profitable opportunities based on WHAT THE CUSTOMERS WANT TO BUY, only for an estimator or manager to “no quote” the opportunity because it isn’t WHAT THE COMPANY WANTS TO SELL. Instead, the estimators or production only want to make what they already know how to make, so they expect the salespeople should go get more of that. However, most often those are mature opportunities that require a price war to gain share, which dilutes profitability if not accompanied by cost-reducing innovation. In contrast, customers asking for a particular product or service signals an under-served challenge with greater profit potential. These perspectives that are figuratively 90-degrees apart result in frustration for both sales and engineering.
The Symptom of Misaligned Model
“I want to be in a growth market,” is another common instruction company management gives to their sales organization. However, frustration is the only result without realignment of processes and practices to that goal. Growth markets begin as markets smaller than their mature counterparts. For organizations like contract manufacturing, which are most often constructed around high volume and resulting economies of scale, their business model is a poor fit for winning opportunities with high-growth potential but initially low demand. Those low-volume opportunities may be penalized in costing and quoting models for the inherent inefficiencies such as material purchases below minimums, set-ups and interruptions to the high-volume production, and amortization of tooling or fixtures. Instead, those high-volume producers enter the “growth” market when it has already reached its peak and the price-reducing competition has begun.
The Symptom of Hunting Unicorns
The expectation of finding a high-volume yet unmet market need that perfectly fits your existing capabilities and know-how is analogous to expecting to catch a wild unicorn. If the need was truly unmet, it wouldn’t yet be high-volume; If the opportunity is high-volume, someone is already meeting the need. If your existing capabilities and know-how were perfect for this unmet need, likely the ones in need would have already found you. Expecting the sales organization to find this perfect-fit opportunity is unrealistic. However, what is realistic is finding a high-volume niche and investing in the innovation to displace the incumbent. Or, investing in an unmet need in its infancy and growing it into a high-volume business. Both can - and are frequently - accomplished successfully, unlike catching live unicorns.
The Cause and Cure
These are all symptoms of a lack of a clear strategy – free of mythical paradigms, and sales processes aligned with that strategy. Building a strategic plan based on core competencies is not an uncommon activity for most organizations, yet these symptoms persist. A strategic plan without real intelligence about the markets could be little more than a fantasy told to stakeholders, but never realized. nd even with good market intelligence to back up the development of a realistic strategy, overlooking aligning the sales processes is like having a dieting strategy to lose weight but continuing to buy the same foods to put in the pantry.
So, before you fire all your salespeople, first ask - is it them or is it me and our organization’s business processes and paradigms?
About the author:
Jason C. Brewer, a director at Harbour Results, helps clients develop competitive business strategies based on sound studies of their existing and potential markets, aligning their go-to-market activities and driving their operations to meet or exceed benchmark performance. In addition to over a decade of experience consulting manufacturers to drive profitable growth, Jason has held management and executive positions in business development and strategy. He is a certified Strategic Management Professional (SMP) by the Association for Strategic Planning.
