Does Your Sales Strategy Stink?

One of my favorite blogs, Sales Benchmark Index, recently made a bold statement: 78 percent of sales strategies are hopeless. It’s not a comforting statement for any member of a sales organization to read, but do read on, because the reasons why might surprise you.

sales strategy

Lack of Communication

In my experience, in most cases companies do have a strategy but it’s not communicated to those in the customer-facing frontlines like sales and customer service in a way that they can consistently translate into clear actions.

Unfortunately, that is a tough thing to do because it requires strong sales management and tools that help sales people identify and uncover the needs of their customers. These tools act like a super human sales analyst digging through the data available to identify what customers need and presenting those needs at the right time to sales people in a way that is aligned with the corporate strategy. In other words, predictive tools and strong coaching can translate a sales strategy into specific actions that drive relevant customer interactions that will bring overall growth.

Coaching is Key

The strategy must also make it easier for managers to coach in an objective manner. Much of a sales manager’s day is likely spent on administrative and reporting tasks, rather than customer- and market-facing activities, despite best efforts. This leaves too little time to coach sales reps to help them keep, grow and win more business, resulting in inefficient time allocation and often, team underperformance.

As efficiency wanes, many companies implement more sales processes, increase the number of reports and look to technology solutions, like CRM. The underlying assumption is that more visibility into sales team activities will help identify areas for improvement and ultimately drive better performance. However, these solutions often exacerbate the problem, creating even more administrative and reporting tasks for reps and managers alike.

This vicious cycle is well-described in a recent Gartner1 report, “Most technology investments were spent on salesforce automation, with sales performance management and sales effectiveness considered back-office functions and out of the purview of sales management. This resulted in sales organizations underspending on sales coaching, content management, and other tools to help support and manage sales teams. Those very decisions are beginning to manifest themselves in less-than-stellar sales performance.”

In order to effectively coach to better performance, sales managers and reps need visibility into the specific opportunities most likely to win business. That information provides an objective and systematic framework to measure performance across territories and coach reps to improve.

Executive Strategy: Leverage Customer Relationships to Boost Sales

Many companies are now espousing the mantra of becoming customer-centric as a strategy to profitably boost sales via better customer relationships. It’s a great strategy, and when done well, better-aligning with customers can reap huge benefits. Often times, the difficulty is not deciding that a company will become more customer-centric, the difficulty is executing on that strategy in a meaningful way.

executive strategy

Recently Larry Myler, Forbes Magazine contributor, took this concept out of the abstract and gave his readers four distinct areas where better customer alignment can boost sales. In his article, “From the C-Suite: Increase Sales Through Customer Alignment,” Myler provides an actionable framework to identify areas for improvement.

I found two of the areas particularly relevant to the industrial B2B companies I commonly work with. First, offering buyers what they want now, not what they wanted in the past, and second, customer retention and account penetration. In Myler’s words:

The belief that current sales numbers are proof of an on-target strategy is an insidious impediment to greater success that could come from better alignment. The market is always changing — dramatically, quickly, and too often with leaders failing to adjust until it’s too late.

Before truly becoming customer-centric, you need to start with a clear strategy that puts customer needs first, but more importantly, that strategy must be directly actionable for employees. If that foundational step is done correctly, customer retention and penetration are achievable.

In my experience, you need tools that can take a great strategy and translate it into clear actions on a daily basis for the people in customer-facing roles (sales, customer service, etc.). These tools can help identify the true needs of each and every one of your customers and provide the sales people with specific actions to take. The actionable insights would specifically show sales people which customers represent penetration opportunities, which products you should sell to each customer, etc. These predictive tools make strategy actionable and scalable across a company.

Speak Your Mind: What’s your strategy for becoming more customer-centric?

Image courtesy of pakron / freedigitalphotos.net

Teach Customers to Get Lower Prices…on Purpose

Tuesday, our friends at PricingBrew shared a thought-provoking piece on “how companies willingly (or unwittingly) train their customers on what they need to do to get a lower price.”

lower price on purpose

Yes, this does happen quite a bit. Companies send signals to customers as to when they can expect prices to drop – and savvy buyers listen. Yet in some cases, teaching customers how to get a lower price can actually benefit both parties without the seller losing profits.

It may sound counterintuitive, but don’t you want to reward customers for loyalty and for doing business with you in a more profitable way for you? Take, for example, a customer that opts to buy through your ecommerce channel rather than through a dedicated sales rep. Shouldn’t that customer, who has a lower cost to serve, get a better price?

For many companies, large order sizes are cheaper to fulfill than small order sizes. For customers that make larger purchases, their cost per unit should be lower. By that same definition, customers that spend more money with you annually should get better price breaks than customers that cherry-pick from your product line and buy infrequently. Incentivizing customers to spend more with you and buy in larger quantities is beneficial to both you and them.

This also holds true in the equipment rental industry. Companies typically charge higher rates for shorter rental durations, i.e. a three-week rental is likely more expensive than renting a piece of equipment for a month. For the equipment rental company, longer average duration is more profitable. Why? Each time the piece of equipment is returned, it has to be cleaned and serviced, then rented again. This process is costly and the less the company has to do it, the more profit it stands to gain over the lifetime of the piece of equipment.

To the point made by the author: “You can bet that savvy B2B buyers will have figured those tricks out if you’re sending the signals.” We at Zilliant would argue that you want to send those signals. In fact, we think you should make your pricing as transparent as possible.

What if the customer had known that by renting a lift for four weeks rather than three that they would get a better rate? Would they have rented for a longer amount of time? Absolutely! You’ve taught them how to get the best rate possible (and choose the duration that optimizes profitability). When sales reps and customers alike understand which levers in a transaction will result in a better deal for the customer, they can have a more productive and collaborative conversation about price, not a contentious one. Best of all, the customer will trust you to give them the best price in the future, further deepening the customer-vendor relationship.