In business, nothing happens until someone sells something. But as the environment gets tougher, businesses need to be pressing their sales teams more effectively to drive growth.
Maintaining sales in an economic downturn is the Holy Grail for businesses regardless of size or sector. Maxine Benson, founder of a resource and support service for business, calls sales “the lifeblood of business” and says that, for smaller businesses especially, cash flow is all-important because overheads are fixed. “You are running a tight book, and sales – getting them in and on time – is the only thing that is going to cover those costs. When times get tougher there are some simple things managers can do to ensure their sales departments can develop and grind out growth in sales regardless of the market conditions.”
Graeme Hall is the founder of Sales Blueprint, a sales improvement consultancy that works with private equity firms both before and after a deal to assess investment targets. He is in no doubt that concentrating on sales is key to business success in tough times. “We have a saying that in a strong wind even a turkey can fly – it is when the wind stops blowing that the problems start.”
Hall’s company makes sure the sales operation that drives a particular product into the market is fit for purpose, and this involves getting the sales team and their practices in shape. “We go into companies before an investment is made and the output is that there is usually room for improvement in sales,” he explains.
In Hall’s experience, many companies make the same mistakes when it comes to sales. “Most businesses and most salespeople will admit that sales is a numbers game,” he says. “What we argue is that few businesses and few salespeople know what their numbers are. Of course, if you don’t know what your numbers are then you don’t know what you need to do to hit them.”
It sounds an obvious concept, but according to Hall few management teams act quickly enough to transform their sales teams, even when they might know what the issues are. The pre-deal due diligence undertaken by Hall’s company takes about two to three days, and usually results in a list of areas where sales practices can improve. If done post-deal, which usually takes longer, the diagnostic work accesses additional scope for improvements and/or the reasons behind sales underperformance.
“We do the assessment against our best practice model and look at the gaps,” says Hall. “We look at which ones matter – and what the management team needs to do about plugging those gaps. That takes about a week.”
Hall believes there are three fundamentals for sales success: (1) quantity, (2) direction and (3) quality.
(1) Quantity is about knowing how much of which sales activity you need to complete in order to reach your objectives. In good times, market conditions will mask any inefficiencies, but they become glaringly obvious when times get harder.
(2) Hall’s definition of direction is about identifying what ideal prospects looks like and where you might find them.
(3) Quality is about the propositions the salespeople have to work with or what makes them stand out, as well as their skills and behaviours.
“In most companies, you draw in business through marketing (a “pull” strategy) and the company’s sales team pursue business (a “push” strategy). Most businesses rely too much on pull and don’t know how hard to push,” says Hall. “In a downturn the pull is less, so you need to know how much to push and the resources you might need.”
Crucially, business owners fail to understand that even in a falling market there may be a compelling case for increasing the sales force rather than downsizing.
A fundamental problem with sales – especially in smaller firms – is that there are some common misconceptions about what ‘good’ looks like in salespeople. “There is not a qualification in sales that is rigorous and recognised and that you can benchmark,” says Hall. “So when recruiting what do you benchmark them against?”
Getting the people right – and ensuring they have the appropriate skills – is a lesson that management teams in mid-market companies can learn from larger firms. Hall points out that what larger companies tend to do better than small ones is have a realistic idea of the talent required in the salespeople, although even they regularly make the same mistakes.
Hall finds this is a common issue when growing companies are recruiting a sales team. For instance, they recruit a salesperson with an apparently good track record. However, it is important that new salespeople can effectively sell for their new employer. They need to understand the products or services from their customer’s perspective and have the appropriate skills to demonstrate that in a way that shows customers the full offering and advantages of it.
“You continually look to make sure every part of the business is being done correctly. Why not do that with the sales team?” asks Hall. “There needs to be a focus on managing the activity that drives the result not a focus on the result. Big businesses have a better understanding of this. It is about employing the best practices that enable you to be in control of the revenues.”
According to Hall, the point of employing best practices is because you don’t know what you don’t know – which can lead to huge problems.
If you employ good practices in your sales team when times are good, they will see you through harder times. But even if you don’t employ them early, you can still recover if you do have a problem or you find out your numbers are not where you want them to be, by adopting best practices immediately.
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