What Keeps You Awake at Night: Sales?

One of the more common business issues that weigh Awakeon owners and senior leaders, particularly at night when they should be sleeping, is the ability of their businesses to meet sales objectives. A business is committed to daily expenses that must be absorbed by incoming sales in the form of orders from customers that can be delivered within a time frame to absorb current period expenses and produce a profit.

The Simple Sales Process
The sales process is dynamic, complicated and the lifeblood of the business. A simple form of the sales process is demonstrated by a street vendor selling hot dogs from a cart on a busy city street corner where the owner/operator hopes to encounter enough hungry people walking by to be enticed to buy his product.

If sidewalk traffic is low, bad weather interferes or people just aren’t buying, the owner can make decisions to alter the approach to reaching customers. They can move to an alternate location, move under a canopy if foul weather is present or advertise a special offer to increase sales.

Reality
Unfortunately, the owners of many businesses may not be able to enjoy the close relationship with prospective and repeat customers like the street vendor and make immediate changes to the sales process. Typically customers of many businesses are anonymous, difficult to reach or identify, and protected by gatekeepers or voice mail. Consequently, techniques to maximize the sales potential of a company can be very complex and expensive.

Selling is not as simple as hiring a sales person who can sell any product including ice to Eskimos. Effective selling begins with understanding the customer in terms of what problem needs to be solved and on what terms will the customer invest in a product or service that will solve that problem. A product or service then needs to be designed that can either be manufactured consistently at a predictable cost and level of quality or a service performed by employees who can deliver the service to customers in a repeatable and consistent manner.

Additional development of the sales process would include establishing various channels – direct, distribution, and/or ecommerce – to enable the product to reach various market segments and customer types. To further stimulate sales and differentiate the product from competition involves using marketing practices to develop messaging and materials to educate and stimulate customers to select and buy the product.

So what is to worry about?
Too often worry occurs due to what is not known. The known is that sales are down and the unknown is what is not working. Worry is the result of wrestling over what to do and not knowing what will make the difference and solve the problem. This is often the outcome of a business that moves into a reactive mode. The market is strong; sales are good, what is to worry about?

Proactive Sales Management
The sales process any business adopts to generate repeat and new business needs to be managed. Critical steps in the process need to be identified, watched, and measured on a regular basis. In businesses with a long order gestation period critical steps involve the number of sales calls, early qualification of the business opportunity, timing of order placement and tracking through the various steps in the customers decision process.

Businesses that are ecommerce centric are focused on page search engine optimization, views, clicks and ultimately orders. This is a much faster paced cycle but by measuring the events that precede order decisions, forecasts can be made as to whether sales targets for the immediate period will be met.

In both instances, it is the critical events in the sales funnel that are managed. Disciplined businesses with a field sales force have systems (or weekly meetings) to report customer contacts and track activity, A drop in any one of these two parameters will indicate that corrective action is necessary. This early warning system will then trigger action to replace or make up for “lost activity” and fill the funnel with enough opportunities to ensure that the targeted number of orders will result.

Proactive sales management gives you a heads-up to dial back expenses if a slump in sales is on the horizon. You can then address changes in expense levels weeks (and possibly months) in advance of a slump in orders or while you rebuild the funnel and protect your profit objective.

Be careful of expense budgets in business with high product mix characteristics. My experience is that operating managers will budget to the most optimistic product mix conditions. Senior managers should take a conservative position and have the operating groups budget to a product mix that will have a lower gross margin. This gives you additional headroom if sales or product mix fluctuates.

Summary
If sales are keeping you awake at night, I suspect that you are challenged by what you do not know or what you can do about it. Reevaluate your sales process and ask your self if you are managing proactively or reactively. Proactive sales management provides:

  • Focus on critical sales processes and
  • Tracking sales productivity in terms of:
    • Customer calls
    • Opportunities
    • Outstanding issues requiring answers
    • Final decisions to be made

Get ahead of the game and maximize the potential of your sales model and sales channel resources. Do not let time and energy go to waste. Make each person responsible for critical sales processes carry responsibility to make their respective sales objective.

Investing in managing your sales process and distribute responsibility across capable people in your organization will allow you to think about something else at night.

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