Background
Finding the catalysts needed to help firms achieve significant sales growth took place when I was employed in a Regional Staffing Company that specialized in light industrial work. This company was located within the Midwestern United States. Between 2001 and 2008, the Staffing Firm achieved on average 30.5 percent growth each year. Then, I, as well as our management team, reviewed our sales procedure to find out what we could have done differently than our competition. Light Industrial Staffing during that time period was an industry with an average growth rate of 3. This isn’t exactly a booming industry. We came up with our theory and began to interview 30 CEOs to check our assumptions. We analyzed businesses from every sector and also an executive from Major League Baseball. As we neared the end of the day, we started to notice very consistent patterns. Firms with a strong sales force alignment across the nine categories saw excellent sales results. In every case that a company was aligned in at least seven categories, the increase in sales year-over-year was over 25 percent. Then we’d become proficient enough to correctly estimate what the rate of growth is for the business within a couple of percentage points just based on our discussion with the CEO about the company’s sales process.
We have evidence to prove that we were right.
We had an unforgettable interview that confirmed our convictions that we were on the right track to something. A company was bought by the “Venture Capital Turned Around Company” located in the Cincinnati region appointed the new CEO. The CEO was a turnaround specialist who put eight of the nine catalysts into place and has achieved an increase of 37% a year for a 4-year period. It was the Venture Capital Group then sold the business to a commercial firm in the same industry. The new company appointed its sales manager in charge of the sales force of the two companies. The sales manager took away the triggers that were causing the growth. The result was a total catastrophe. The rate of growth for the acquired company was reduced from over 30% in the previous year to just 7 percent annually. We did take into consideration economic factors that contributed to the decrease in the firm’s performance. Other firms in the sector were not affected, and since the company created cost savings for its customers, the service made money from the savings. It was logical that in a down economy, a company should see an increase in growth, as cost reduction is more important to potential clients of the firm. The turnaround CEO resigned the sales manager from the company acquiring it. Reinstated the processes that led to increased sales, and a more rapid growth rate was observed.
What are the nine key sales drivers?
1. Strategic Hiring
2. Presentation and Training
3. Consultative Selling
4. Tracking and Evaluation
5. Compensation Alignment
6. Return on the investment
7. Resizing SalesForce
8. Drive Management
9. Negotiation
Strategic Hiring
The first question we’d ask the CEO of a company was regarding the hiring process of the company. Every time we would hear the CEO say with a smile, “I am sure of a good salesperson when I see them.” The next question was, of the five recent sales recruits, how many of them remain with the company? The CEO is likely to blush and say one, but other times say two, and more often, say zero. Companies with a clearly established hiring process generally did significantly better when it came to low turnover and, consequently, were less likely to employ additional sales personnel. This is because, as a result of a flawed hiring process and a company needs to hire other sales personnel to expand; however, every salesperson employed by the company will be a “dud.” Out of the 30 companies that were surveyed, the majority of firms with over 10% growth in sales in the last three years had a clearly defined hiring procedure. One firm was using the policy of hiring, not stealing top sales staff. This company achieved an increase of 10% in every one of the three years. We do see some merits to this strategy, but in the event that a hiring process doesn’t need to be explained in complete detail. This could be the most efficient method we have encountered.
Training and presentation
The majority of companies have a thorough training plan that covers a variety of jobs within their organization. But when it came down to the training of sales employees, they were “trial by firing.” Sales representatives would enter the market with inadequate knowledge of the product, a lack of ability to answer or ask questions, and had no formal sales pitch at all. Companies that did not have at least two weeks of formal training as well as a traditional sales and marketing presentation, “one that tells an engaging story,” experienced low growth in sales rates. Sometimes we ran into businesses that had hired a consultant to conduct one week of costly training. The company did not perform better than those who were not equipped with any. The company must have a formalized process for training and a set of questions that need to be asked to each prospective customer to identify the issues they’re facing, and it must be followed by a compelling tale that addresses these needs. Businesses who understood this had shorter the learning curve of their sales team and also had a rapid rate of growth. The ones that didn’t have formalized training and presentations increased at a slower pace.
Consultative Selling
Presentation and Consultative Selling both go hand in hand. Companies with significant growth rates have their employees resolve issues. It is not a good idea to promote a product that is not required by the company. The salesperson would accomplish this by asking questions to ensure they could customize the products they sell to their clients’ wants. Selling features and benefits can be described as “dead.” Effective salespeople are problem solvers throughout the day. The process of problem-solving starts from a deep understanding of the needs of every client, rather than expressing knowledge about products.
Tracking and Evaluation
All companies track some type of data on a regular basis during weekly calls, according to what most sales managers suggest. The next thing we’d be asking would be, “what is the best way to use this information?” The answer, in more than 90% of the cases, was “well what?” Monitoring sales activity is vital in enhancing the efficiency of any company that sells. If sales activity isn’t being monitored and compared with what is happening with the salesperson at your business, it is doubtful that your sales department, even at its best times, will ever see double-digit growth. Companies that analyzed the data from weekly meetings, such as the number of dials or sessions that a salesperson had every week, and then compared their outcomes over the long term to the performance of their salespeople were able to identify flaws in their salespeople and identify the most important question “Why did their top performers the top ones? What could they be doing differently?” In our interviews, it was found that this was the primary focus of the process of learning.
Compensation Alignment
Sales personnel with correctly set up compensation systems were better than those that did not have. One company that struggled with other areas of sales made the time to change all salespeople to a completely commission-based payment following one year. The company, despite the fact that all other aspects of sales management faced significant issues, was able to expand at a rate of 11% over a period of five years. The highest-performing company had base salaries for sales staff with a salary of $200,000 per. Salespeople earned an additional $200,000 annually in commissions. The CEO’s reason was, “I am looking to evaluate each of the top candidates in the market, and I would like all candidates in the market ready to move to join my firm.” This kind of structure works best when the CEO is sure that the other procedures are in place, like the strategic hiring process and training. When you pay for the best, you better have the highest quality. The results can be excellent when all the pieces are in place.
Return on Investment
The top sales management evaluated salespeople based on the new business the salesperson delivered to the company that year. Accounts were assessed based on their harvest time and then discounted to net value. Salespeople who depended on the repeat business of previous years were reduced to commission only, and Base salary was removed. We asked a top-performing CEO how base salary should be considered? His answer is, “Base Salary is the amount a salesperson earns for bringing new customers to the table. Commissions are the amount salespeople receive to keep customers.”
Resizing SalesForce
Companies that study or devise methods to monitor their territory are typically capable of generating additional revenues by correctly distributing their employees, resulting in more significant revenue. Only the top-performing company was able to establish a system to resize its sales territory annually. The rest of the 29 companies didn’t have a program for resizing and appeared confused when the question was put to them.
Drive Management
The drive to Manage is the method of management to keep their sales team in high spirits. People who have optimistic views are proven more successful in selling than people who have a negative outlook on life. So, the top sales companies coached employees and assisted them in setting their individual targets as well as “dreams.” The organizations that help employees reach their goals better than those who employ an approach of a “carrot or stick” method of managing their sales teams.
Negotiation
Three of the top sales companies were able to spend a significant amount of time giving guidance on negotiation and setting up guidelines for how the salesperson could engage with customers. They appeared to have a more excellent knowledge of their cost structure and have also created a way to share this information with their sales team. The sales manager could offer incentives in conjunction with commission structures to increase the value of contracts made by sales representatives. Teaching people to negotiate and giving them the proper guidelines for doing so ultimately adds value. “We earn money when our salespeople earn money.” One CEO has said that “this can be the sole way to align our goals and increase profits.”
Call to Take Action
In the case of a CEO or a Sales Manager, and you have read this article, you should try the implementation of these nine catalysts, one at a. When all nine components work together, growth will be a process that is controlled scientifically, not a voodoo man who everyone prays for the longevity of the business. Growth in sales is achieved through superior management and strategy. We believe that this is our research findings.
