Winning sales processes are not created by happenstance. They are the direct result of a solid commitment by company leadership to develop and support a sales culture that has common goals and practices. The following eight steps offer an easy-to-follow guide to help sales managers change the sales process and improve results.
1. Set Goals
Everybody needs a goal. Print shop owners often lament that their sales personnel know what they are supposed to sell, but they get stressed out if they are given a goal. The reality, though, is that people need goals. Without goals, there is no sense of urgency. The sales cycle will meander, deals will be lost and, ultimately, customers will be lost. If you do nothing else in the coming year, take a look at what your sales staff did last year and then tell them they have to do that, plus a little bit more this year. The important thing is that you give them a number.
2. Grow or Die!
If you aren't growing, you're dying. Companies must assign sales goals that accommodate growth objectives. Start out by determining how much you want your company to grow, then divide that amount among your reps. You might have to rob Peter to pay Paul in this step because all goals must be realistic. New reps won't be able to sell the same amount as more tenured reps, but it is critical that even those who are just starting out are successful in year one. Reps that are paid more because of their experience must sell more. Take a little away from the reps who may be learning and give it to the more tenured reps, but make sure that everyone is responsible for a piece of your growth goals and that you have apportioned your company's overall goals across the sales force.
3. Plan for Attrition
Some businesses close their doors, others merge with other companies, and applications are dying out. Plan on losing at least 10 percent of your business every year, and realize that you might need to plan for even more based on your industry. The sales goals that you give to your reps need to include making up the 10 percent that is going to be lost. Increase your sales reps' goals so your company can still hit its growth goals even with some losses.
4. All Sales Are Not the Same
It’s OK for reps to sell more to existing customers, but selling more to existing accounts without adding new customers ultimately increases a company's risk. Losing a big account can be disastrous, and having a bigger number of good customers mitigates that risk. Make selling new business a part of your sales commission plans. If you've never done this before, a good formula is to lower the sales commission percentage that you pay for selling to current customers. Take that money and turn it into a quarterly payment that is reliant on having a certain percentage of sales from new accounts. You will likely lose roughly 10 percent to natural attrition, so make the new business goal 10 percent.
Make sure that you define what constitutes a new account upfront to minimize confusion later in the year. And since you don't want people throwing in the towel on earning this extra bonus if they miss it in Q1, roll it forward to Q2. If a representative can sell the equivalent of 10 percent new business for both Q1 and Q2, he or she should be rewarded a bonus. Let this continue all the way to the end of the year so there is always an incentive to keep working on developing those new accounts. If your representatives bring in new business that was missed during previous quarters in Q4, give them a bonus. They've done what you wanted.
5. Eliminate Underachievers
Underperforming reps are bad for a business, regardless of how little they are being paid. If I had a nickel for every time a business owner told me that his underperforming reps weren't costing anything because they were on 100 percent commission, I'd be writing this article from a second home in St. Maarten. Ultimately, it's important to remember that underperforming reps are not going to achieve the growth you apportion to them. Creating a sales culture is about consistency and accountability, and neither of these goals can be achieved if a company accepts underperformance as a matter of course. Rid your company of chronic underachievers — you aren't helping them and they aren’t helping you.
6. Be Realistic
Let's say you missed your growth goal for the past two years — or worse yet, maybe you've never had a growth goal. If this is the case, your chances of achieving a 20 percent growth rate in 2016 are probably not very good. If you start out your plan with an unreachable goal, you'll end up achieving the exact opposite of what you intended. Rome wasn't built in a day, so set realistic sales goals. If you give your reps a decent chance of accomplishing what you want them to do, you can start to build a culture of consistency. You can be more aggressive in later years once the realistic goals have been achieved.
7. Ask for Commitments
No sales rep closes 100 percent of the opportunities they work on. If you want your reps to sell $500,000 next year, they'll need to be working on selling three times that amount. Institute a monthly pipeline review meeting and have your sales reps list the things they are working on, the estimated amount of the sale and when they think it will close. If you have a CRM system such as Salesforce.com, reps are just generating a report rather than reinventing the wheel. Keep your reporting process as streamlined as possible to avoid redundancy, but demand reports all the same. Don't accept excuses for not getting it done. This is part of your foundation. Reviews can help reps fill the sales pipeline with enough strong opportunities to achieve their sales goals. If they don’t have enough, they’ll know it early enough to do something about it — not in December when it's too late. These sessions will probably take about an hour a month for each rep, and possibly a little longer in January and July.
Sales reps are typically optimistic, but it is management's job to play devil's advocate. If a sales rep forecasts something to close routinely each month, and it doesn't close, he or she is likely hiding behind a false opportunity. If this is the case, the opportunity can still be worked, but it shouldn't be included in the forecast anymore. If the deal eventually closes, it's gravy. This strategy will force your sales reps to keep filling the pipeline with viable opportunities rather than kidding themselves into thinking that an opportunity exists when it doesn't.
8. Accountability Applies to the Company, Too!
For this strategy to work, reps need to know where they are on a monthly basis. The company must be able to give the sales team a documented compensation plan on Jan. 1 and then provide monthly reports to show them exactly where they stand. The monthly pipeline review meeting gives management the opportunity to hear firsthand what is going on in the field. It also gives reps a chance to ask for the support they need to be successful. Support usually takes the form of marketing, sales training and sales management.
Supporting your sales team also requires maintaining a solid and efficient production environment. Your sales team must be confident that what they sell is going to be produced correctly and on time. Many sales reps believe it is their responsibility to shepherd what they sell through the rest of the process. This activity distracts reps from selling, so it must be removed. Establishing processes and best practices that achieve operational excellence will improve production efficiency and sales efforts. Sales reps who are confident in the underlying manufacturing process can stay focused on selling. Keep your promises by providing the right selling environment, and you can build a foundation for future success.
It’s true that Rome wasn't built in a day, but at some point, you have to start to build something. Follow these eight steps to get a jump on your sales plan, guide your efforts and reach your goals in 2016 and beyond.