Thursday, September 3, 2015

Sales Strategy - driven by data or opinion?

In order to be successful in sales, the generally accepted wisdom is that you have to you have to build strong relationships with your potential customers. This becomes even more pronounced in the services world,  where 'people buy from people' (or so the saying goes.) Which is true, but unfortunately, not many companies have the patience to wait for their sales folks to build strong relationships - this takes time, and meanwhile payroll has to be met.

What to do? Fire the sales guy who has not produced anything in the last 3 months? While the pace of relationship building can only be accelerated so much, I think there are some steps that business managers can take in order to ensure that their sales people get the full support of the company. Many of these points are common sense, but it is surprising how many companies do not always get it right.

1. Get some basic analytics in place - What questions should we answer that will help you sell more, and sell faster? There are plenty, and a few are listed below.

Answers to these questions should ideally (in my opinion) define your sales strategy. Staying within the realm of data is hard, particularly when it comes to decisions around sales strategy, but allowing the data to guide your decision making will pay dividends in the long run.
  • Do you know how much you want to grow by, quarter over quarter, or YoY? Why?
  • Do you know where you are growing today - geographically/product wise? 
  • Likewise, do you know where you are losing sales? Do you know why?
  • How big is the market opportunity/ potential customer base in these territories?
  • Does the data show that you have concentration in a few accounts?
  • Does the data show that your sales resources are spread too thin or vice-versa?
  • And really, have you defined benchmarks for the last two questions? If not, can you expect to answer them correctly?
Drill even deeper..answer these questions for each territory if possible
  • Look for the 80/20 rule - is it true that 80% of your business comes from 20% of your customers in these territories?
  • Can you identify how much share of wallet you have with these customers? How much are you not getting?
  • How many customers fit the profile of your existing customers, but you are not going after them?
  • How many people do you have there to sell to these potential customers?
  • What is the ratio of opportunity to sales-people? Does it pass the sanity test?
  • How many sales people are selling to multiple accounts? Are they all locally situated?
  • Which business unit/ product line is growing the most? How are the profit margins here? Are you/Should you be focusing on this?

2. Structure - I am a strong believer that even the greatest strategy without a supporting organizational structure and associated incentives will not work.

To answer the structure problem, ask some of the following questions:
  • Is it just your sales force that is tasked with selling? Or do you have your product managers and team leaders selling and evangelizing as well? 
  • Do you have a solid pre-sales organization that is both technical and sales oriented?
  • How well is your engineering sales force working for you? Are they trained to have the right conversations when needed? 

3. Go to market as one company
 - Too many times, I have seen that there are multiple sales people from the same company contacting the same potential customer, pitching different products. This obviously results from a lack of coordination and information-sharing across the company.  The sad part is that the customer does not care whether you are from business unit A or business unit B. They see the company as one entity, and this lack of internal coordination amongst the sales folks can cost the company dearly. This is more difficult to solve than it seems, and I think deserves a separate post.


Please let me know if there are other points that you have seen that work well. Best of luck selling!