“We need a new CRM system”, “we need a new sales team”, “we need a new sales strategy”, “let’s find a rain-maker” are all terms bandied around at management team meetings and networking events when the conversation turns to the topic of how to accelerate sales growth, or, even worse, how to arrest what looks like terminal decline.
The problem I find is two-fold:
- Firstly, most of us, with the best intentions, quickly jump to a solution rather than clearly establishing the problem by gathering data to understand the underlying root causes. We naturally want to solve the problem quickly and see results
- Secondly, the opposite is also true, undertaking a lengthy strategic and operational analysis of the current sales situation is not going to help on the grounds that the business (or we) may expire before we find the answer
So, based on my 20 years of buying, operating and selling businesses, and from talking to 100’s of fellow entrepreneurs over the years, here are my reflections for starting to change your approach to driving sales growth.
You wouldn’t go straight to hospital and ask a surgeon to amputate your leg just because you woke up and it hurts, so why would you immediately take a chain-saw to your business to fix sales? Step out of the day-day activity and take time (3-4 weeks) to understand what is really going on with a focus on data collection and analysis, then build a solution that addresses the underlying issues.
In practice, the analysis I have undertaken over many years has some common themes that you may find helpful:
- Financials – clearly, one of the key pieces of information you will need is the financial analysis. Work with your Finance team to understand the last 3 year sales trends by month, budget versus actual, sales by segment, sales by person, sales by account, % of new-new account sales versus on-selling, etc.
- Business planning – take out the annual business plan and make sure it links directly with the sales and marketing plan, i.e. do the sales people have a common understanding of what you are selling (core proposition); have you defined precisely who you are selling to (target segments and decision making units); do you agree on the core sales triggers (customer needs) and are there clear sales targets that are SMART.
- Pipeline analysis – as a good friend and business colleague, Paul Humphries, points out, check that you have a structured sales pipeline that everyone understands, i.e. 3-5 stages, clear criteria for moving between stages and weightings to moderate revenue forecasts by stage. Next, look at conversion rates through the pipeline stages, new leads per month, size of leads, pipeline shape, quality of forward pipeline by month by stage, time to move between stages and then why did you win and lose deals in the pipeline?
- Lead generation – do you really understand where your best sources of leads come from and are you investing the right proportion of your marketing spend in those areas. My experience is that there is a natural hierarchy of where to find the Glengarry Leads (if you haven’t seen the film Glengarry GlenRoss, I strongly suggest you watch it) starting with new sales to existing customers and ending with pure cold calling with lots of avenues (and dead ends) in between.
- Sales management – you need to look at who is accountable for sales pipeline management and check if you are using sales qualification checklists; have you agreed a few simple pipeline stage definitions and associated weightings, how do you challenge sales people on key opportunities, how are the targets set and managed, do your sales people have the right skills and training (or do you have the right sales people)?
- Systems and processes – assuming you have a CRM system, can you extract activity reports by user to see when they log in, how often they update records, who owns accounts, quality of the pipeline data; then look at how often do you run sales management meetings, what do you do in those meetings, how do you monitor progress?
- Culture – and lastly, do you have a strong sales team culture throughout the organisation, or are one or two people responsible for bringing home the deals.
Once you have all the data in a structured and organised framework (you may want to talk to an independent third party to do some of the data collection and analysis if you feel you are too close to the issues), I recommend doing one of two things:
- For the more purist analytical types out there, build a cause-and-effect diagram (like an Ishikawa diagram) and map all your findings. This will then show you where the material causes of your issues are and get you ready to start designing the solutions.
- For those that prefer a more organic approach to the analysis, lay out the headlines for each piece of data you collected on a big mind map (some people find it useful to stick paper on the wall) and then stand back and look for themes that are having the biggest impact on sales.
In a future article, I will take a look at some of the solutions adopted by successful sales growth programmes following the analysis phase.
By Mike Lander, business consultant and co-founder of Ensoul.