Too often too many businesses procrastinate when faced with heavy pressure from competitors – global or regional, many of whom compete solely on price. Competing on price is often a desperate way out.
We know that many sales leaders are burdened by the ever-present pressure to achieve short to medium term value / volume quotas, often complaining that there isn’t enough time to develop a sales strategy.
The usual mantra from these groups is a cry for more productivity, more action, better selling techniques and less discounting. All admirable sentiments, but without a strategy, all a useless attempt to achieve a dream.
When challenged, some sales leaders readily admit that they need a sales strategy, but that the pressure to meet shorter-terms targets and their heavy involvement in day-to-day operational issues (even if these do relate to sales) means that sales strategy takes a back seat. This is a very dangerous attitude to take.
We understand that more and more, the high cost of selling, longer lead times, multiple choices, maturing markets, rampant competition and diminishing differentiation, is taking its toll on sales performance. We understand that salespeople are being squeezed to produce more sales revenue / volumes, at better margins, but corporate return on sales effort, isn’t what it used to be.
In response to the pressures of a decline in demand and pressure to reduce selling prices (on the buying side), and a push for greater volume at better margin, in the face of increasing competition (on the supply side), companies have sought to cut costs. Organisations have looked for ways to be more efficient, production, logistics and operations all looked for ways to be more streamlined, finance pulled back, cut credit lines and reined in spending.
All credible actions but the one area that really needed an overhaul –Sales– has allowed salespeople to continue to do the same things, with the same processes, in the same way as they always have. If anything, what sales did do was increase its resistance to change. Sales leadership seems to have forgotten that doing the same things, in the same way, even in the face of major disruptions is unlikely to get a different result.
The main reason for this lack of change on the sales front is a lack of exposure or understanding of sales strategy. This has resulted in many sales leaders floundering – uncertain of what approach to take.
As a result marketing and corporate strategists became involved, taking the lead and, even though they had little understanding of the very specific focus of sales strategy, started driving the initiative. One of the worst manifestations of this was the erroneous impression that sales training was the solution to all sales problems.
TRYING TO FIX A SALES STRATEGY PROBLEM WITH THE WRONG THINGS
What these sales leaders and salespeople soon learned is that sales training alone didn’t encourage the changes needed to improve sales performance. Nor did increasing, expanding or contracting territories, etc. Nor did changing sales incentive plans or reward schemes. Nor did reorganising the salesforce.
The four most common approaches –sales training, incentives, territory planning and sales force restructures– taken by sales leaders to try to improve sales are not working.
The reason for these failures was not that the initiatives were wrong, but rather that they were driven more by panic, than by strategy. They were motivated by a need to try and get some incremental improvement in sales, rather than looking for a way to improve customer satisfaction, define and deliver real value to customers, and deliver more sustainable results.
Many sales leaders have failed to look at the bigger picture and the complex world in which they work. It is more common practice (and perhaps more comforting) to push for more sales productivity or to cut prices, than to step back and re-examine the entire sales strategy and sales processes that underpin sales success.
The message is clear. If sales leaders fail to have a clear picture of what they want to achieve supported by a sound sales strategy and operations plan, plus the courage and conviction to make their strategy real through real world application, they are doomed to fail.
Which path will you choose?
Remember everybody lives by selling something.
