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Action Matters

Q&A: Implementing Sales Strategies to Drive Top-Line Improvements

"Sales are slumping because of the economy. The environment is making it much more difficult to generate new leads. We're being forced to give huge discounts and accept much lower margins, just to sell products. It's become almost impossible to close a deal quickly. Our customers are cutting budgets - they're just not buying like they used to."

Sound familiar?

While there's no question the recent recessionary environment has impacted businesses across the board, it has become tempting for many managers to simply embrace the "it's the economy, stupid" mantra, rather than dig in to unearth what's really ailing their sales force and take steps toward improvement.

Action Matters sat down with A&M Revenue Enhancement Group co-heads Jacques Roizen and Amy O'Brien-Bird, who have been working closely with private equity firms and corporate managers to implement sales strategies designed to drive top line performance - in good times and in bad.

AM: Have companies been putting too much blame on the economy to excuse poor sales performance?

JR: Has the environment been challenging? Of course, there's certainly been an impact. But the savviest companies are realizing that performance issues are not just at the whim of external factors. When it comes to sales force productivity, one silver lining of the recent recession has been that the environment has revealed whether individuals are "sellers" or more like "account managers." A seller knows how to prospect for business, close deals and succeed regardless of circumstances. An account manager, however, who has had the same book of business for several years, who has essentially farmed those same relationships for repeat orders and generally benefited by strong economic conditions is going to struggle if that small field of contacts dries up. To paraphrase Warren Buffet, it's only when the tide goes out that you can tell who's been swimming naked.

AOB: In addition to the strengths and weaknesses of individual people, the environment has also exposed the effectiveness of fundamental sales processes. Many companies haven't changed or updated their sales handbooks, techniques or approaches in decades. Performance was pretty good and it was easy to say, "if it ain't broke, don't fix it." Now, however, companies are realizing that those processes actually are broken - and have been so for some time.

AM: Revamping a sales force sounds like it could be a daunting task. Where does a company or PE firm start?

JR: Like any effective performance improvement exercise, it starts with probing questions that lead to a fact base - and an approach grounded in a sense of urgency. For private equity sponsors or corporate leaders, it often begins with the basics and a mindset to assume nothing. How is your sales force trained? Are they required to take a test before they are hired? How do you measure their performance? When was the last time the company's processes were updated? How are you using your marketing resources to support sales?

AOB: Once you have the big picture, then it's important to drill down and look at the department person by person, account by account. How are territories allocated - and do they make sense? What is the potential of each account? Is the account something that can be expanded and made more profitable, or is it one in which the sales person has had a long personal relationship, spends a lot of time and resources, but, at the end of the day, adds very little to the bottom line.

Perhaps most importantly, do the individual account forecasts match the company's overall forecast? While it seems obvious, time and again we find that when you add up the sales targets line by line, they don't match the company's plan.

AM: How do sales force members react to this type of analysis? It sounds like you could encounter a fair amount of defensiveness as you're challenging the way processes have always been done and exposing what have been the true results.

JR: The exercise is incredibly revealing on multiple levels. From a personnel standpoint, the strong sellers will almost always welcome it. They will want to show you the ways in which they've been successful and often offer up their own ideas for how the process can be made more efficient or effective. By contrast, weaker performers tend to be resistant to change. Their ability to actually sell in a more challenging environment is coming into question, which, not surprisingly makes them uncomfortable.

AM: So, how do you get sales force buy-in to make change a reality?

AOB: It's a process of tools and rewards - and figuring out what is going to be most effective on both fronts. In terms of tools, for example, training often needs to be more specific and tailored to individuals, not the full universe of sellers. By tracking activities and performance, we may discover that one salesperson is excellent at opening doors and generating leads, but is terrible at closing. He's getting on deck, but not getting on base - how can we help him change that?

Similarly, it's critical to look at what is being rewarded, and how. Many companies tend to reward revenue results. That's great for account managers who have been milking existing client relationships for years. But what about people who are aggressively cold calling and going after new leads? Even though they may not be producing immediate revenue, that pipeline is the company's future and it should be rewarded. The shift in compensation structure tends to be from one that is strictly revenue based to one that is activity based and tied to the ability to deliver on specific targets.

JR: If approached correctly, selling in a challenging economy should not be much different than selling in a robust economy. The skill remains the same. And, in fact, there's very little that's revolutionary about improving performance - it all comes down to doing the work, peeling back layer after layer with a real sense of urgency to figure out what's working and what's not and embracing the fact that just because something has always been done one way is not reason enough to keep doing it.