Playing “catch up” is a common challenge for organisations of all sizes.  Whether you have enjoyed a period of rapid growth and prosperity, or encountered some unexpected obstacles or losses, with little warning, businesses can discover that their decision making and activity has become very reactive.  Too much time is spent putting out spot fires and reacting to situations, while too little time is spent on pro-active and strategic activities.

The very real and legitimate day to day business pressures result in many (if not most) decisions being made on an ad-hoc basis, with each one disconnected from the next.  The end result can be inefficiencies, unproductive sales teams, poor business performance or simply wide-spread frustration – leaders are reacting to the markets instead of acting with forethought and vision.  If left unchecked, this can become a way of life with disastrous consequences.

By contrast, high performing organisations (both small and large) anchor all tactical activity, decision making and effort to carefully considered and clearly understood strategic objectives which have been underpinned by the discipline of business planning, a capability necessary for all people at managerial level.  For clarity, the Encarta Dictionary defines planning as “a method of doing something that is worked out in advance”.  With this in mind, what business can afford not to?

With the move to a globalised business world, decisions once made with only the local market in mind now need to take in many more variables and more complex arrangements.  With this shift in market complexity we are seeing the need for Sales Managers of all levels to possess more strategic thinking and business planning capabilities if they are to lead and guide their sales teams to business success in the short and long term.

However the reality is that most Sales Managers, particularly at the state and regional level are not trained or equipped for strategic thinking and business planning.  From our observations in the field and, in particular, our work in Job Profiling, too many Sales Managers are leaning towards tactical skills and behaviours rather than the strategic.  They are often more comfortable working in the field sorting out products, deals and customer issues alongside their sales teams rather than stepping back and looking at the bigger picture.  This suggests that the Sales Managers are spending more time working in the business, rather than on the business.

The business world has fundamentally changed and with it has come the need for more sophisticated thinking and action, especially in sales.   Whether at a state, national or global level it makes perfect sense for our Sales Manager to be competent in these core capabilities for today and the future.

Dalrymple, Cron and DeCarlo, authors of ‘Sales Management’, state that the core competencies for the 21st Sales Manager are now:

1. Strategic Action: Understanding the industry; Understanding the organisation; Taking strategic actions
2. Coaching: Providing verbal feedback; Role modelling; Trust building
3. Team Building: Designing teams; Creating a supportive environment; Managing team dynamics
4. Self Management: Fostering integrity and ethical conduct; Managing and balancing personal drive ; Developing self awareness
5. Global Perspective: Cultural knowledge and sensitivity; Global selling program
6. Technology: Understanding new technology; Implementing sales force automation; Implementing customer relationship management (CRM)

How do your Sales Managers measure up?

What’s clear is that the 21st Century Sales Manager role at all levels requires an ability to plan, organise and monitor activity, projects and resources to deliver business outcomes and to support the business strategy.

With respect to the future training of all Sales Managers, we find we are encouraging the inclusion of business planning and strategic thinking as part of their training agenda, which will teach them how to plan for success both as a Business Manager and a Sales Manager.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

With information comes choice and without proper guidelines and filters in place, too much information and too many choices can lead to indecision.  Indecision can then lead to paralysis making us unhappy, unproductive, and at worst, ineffective.  In sales careers, or any role for that matter, too much information and the subsequent indecision is a real killer – in fact, making no decision is far worse than making the wrong decision.

Barry Schwartz, professor of social theory at Swarthmore College in the US and author of The Paradox of Choice states “too much choice is paralysing us and making us miserable”.   I can’t help but agree.  At times I feel I am drowning in a tsunami of information and feel increasingly confused as I try to work out what to focus on and what to discard.  I am not alone in these feelings; many people I speak to are also reporting feeling overwhelmed and anxious by all the ‘noise’.  Some are even checking out of mainstream information and news sources and choosing to dramatically reduce their diet of information.

In our haste to keep up, be on top of things, be seen as the one with all the answers, and be ahead of the pack, are we inadvertently creating a climate of confusion, indecision, and unnecessary distress by exposing ourselves and our teams to too much information?  I suggest the answer is ‘Yes’.

For instance, there is a learned behavioural syndrome called ‘Overpreparer’ which can account for 40%+ drop in sales productivity for sales people with Overpreparer tendencies.  It is often caused by  organisations placing undue importance on the need to be overly prepared and knowledgeable. Being prepared takes precedence over getting out and selling.  For instance, in banking and finance where compliance is important, Overpreparing is often systemic creating a culture of indecision and paralysis by analysis where sales people use it as an excuse to not prospect and sell.

Despite feeling out of control we can regain control over how we process, use and manage information.  Having a clear head and removing clutter from our lives is critical if we want to be productive and effective.  As promised in Noise Reduction part 1, here we will explore some strategies that may help us reduce the ‘noise’ and recalibrate our signal-to-ratio (SNR).  So in the spirit of less is more, here are some simple principles we can follow as a guide to effective noise reduction and decision making:

Step 1: Set clear goals

• Clear goals help you determine what to focus on and what information you need to have at hand to help you achieve your goals.
• Clear goals help you prioritise your thinking and actions, assisting you in planning each step of the way.

Step 2: Determine what you need to know

• Put in place filters that will help you determine what information you want to focus on: Does this information help you get closer to the goals that are important to you?
• Work out what is ‘essential’, ‘desirable’ and ‘nice-to-have’, and prioritise in that order.
• Cultivate a scientific mindset – scientists begin by defining a hypothesis then look specifically for data or information that either corroborates or refutes that hypothesis.
• Determine what information and networks your business and your sales people need to be aware of in order to make good decisions (i.e. market trends, competitors, product innovations, changes in legislation, etc.)
• Find out what your clients are interested in reading and hearing.
• Find sites and networks that keep you up to date with the latest trends and are quick and easy to read.
• Make sure your CRM is collecting useful client and market information that is aligned to your goals and can be applied in a meaningful manner (i.e. creating client buying patterns report, etc.), then ignore the rest.

Step 3: Determine effectiveness

• What information (blogs/references/forums/publications/social media sites/networks, etc.) are proving to be useful to you (your customers, your business and your communities)? Why?
• Check why you originally chose this information or network sources and ask if they are still relevant.
• Determine how often you use these information sources.
• Check how you apply these information sources in your job or in your communication with each other and clients/suppliers (tangible outcomes, practical solutions, etc.)
• Verify what is ‘fact’ and what is not.  Is it evidenced based?  Is it supplied by a reputable source that can be validated and checked?
• Check how quickly it takes you to gain a quick and concise understanding of the content.

Step 4: Prioritise and don’t be afraid to limit your options

• Count how many subscriptions you currently have or networks you belong to; check for duplications (i.e. similar blogs, sites or networks offering the same information) and irrelevant sites or networks (not aligned to your goals) then cull.
• Reduce your ‘daily’ alerts to ‘weekly’ alerts.
• Don’t check your emails every time they arrive, make time to check every 15-30 minutes or so.
• Create a new email address exclusively for your subscriptions so your working email is not cluttered up with low priority data.
• Synchronise your bookmarks.
• Create a filing system that allows you to reference your information quickly and easily.
• Link new information to what you already know.  Drawing concept maps is one such way that helps you to build knowledge over time and draw links between ideas and knowledge sources.
• Allocate specific time twice or three times per week to review your subscription information sources rather than being constantly interrupted by incoming alerts.
• If you need to surf the web, make time to do so when it doesn’t interfere with your work priorities.

Step 5: Find some quiet time

• Allow your mind and your senses to rest and switch off.  Being overly anxious narrows your focus and limits your ability to sort through and process information effectively.
• As strange and boring as this may sound, find time to do mundane tasks that do not require you to process complex information.
• Do some regular exercise like yoga or go for a run to get in touch with your body, breath, heart and nature.
• Meditation requires effort to achieve single pointed focus, however the daily practice of meditation quiets the busy mind and gives you the space you need to recharge and recover from information overload.

As you can see, even discussing reducing noise creates noise, and the signal-to-ratio spiral continues… Without running away to live in a cave, my best suggestion is to take on board a couple of things; stop reading about reducing noise and get out there and sell.  By staying focused on a few keys things and taking action we might just find that the noise fades into a faint, background murmur and we are happier and more productive as a result.

Remember, everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

How much do you actually sell? How profitable are your sales? How accurately can you forecast your sales results? How many ‘returns’ do you receive? How often do you need to discount? How often are you left with old stock? What are your sales cycles? Are your sales people rewarded on volume only or on margin, account growth, account retention, and customer satisfaction?

The answers to these and other key questions will tell you just how effective a sales force is functioning, how they measure their effectiveness, how they think about their business, their customers, their careers, and how likely they are to deliver profitable, sustainable sales results.

Through our observations quite a few companies still only measure their sales results by revenue not what they get back by way of product returns, faulty product recalls, lost business, margins,  length of sales cycle, etc.  This singular measurement approach doesn’t take into account the real cost of sale or the true sales results that the business is experiencing.  This is a common mistake often made by start-ups and new businesses and if left unchecked can lead to unprofitable and unproductive behaviours and compromised relationships with business who take advantage of your situation.

When it really becomes really problematic is when it becomes Channel Stuffing. The following excerpt I found on Wikipedia under Ethically Disputed Business Practices gives a very good explanation of this issue:

“Channel stuffing” is the business practice where a company, or a sales within a company, inflates its sales figures by forcing more products through a distribution channel than the channel  is capable of selling to the world at large.  Also known as “trade loading”, this can be the result of a company attempting to inflate its sales figures. Alternatively, it can be a consequence of a poorly managed sales force attempting to meet short term objectives and quotas in a way that is detrimental to the company in the long term.

Channel stuffing has a number of long-term consequences for the company. Firstly, distributors will often return any unsold goods to the company, incurring a carrying cost and also developing a backlog of product inventory. Wildly fluctuating demand, combined with this excess inventory, leads to costly overtimes and factory shutdowns. Even mild channel stuffing can spiral out of control as sales works to make up for prior over-selling. Discounts used to drive trade loading can greatly affect profits, and even help establish gray market channels as salesmen no longer adequately qualify their prospects.

Occasionally, distribution channels such as large retailers have been known to identify the practice of channel stuffing in their suppliers, and use the phenomenon to their advantage. This is done by holding back on orders until the end of the suppliers’ quota period. The supplier’s sales force then panics, and sells a large amount of the product under more favorable terms than they would under ordinary circumstances. At the beginning of the next period, no new orders are placed, and, barring any action, the cycle is then repeated. This has an impact on customers, with gluts and shortages as buyers turn to competing products.

Corporations have been known to engage in channel stuffing and hide such activities from their investors. In the United States, the U.S. Securities and Exchange Commission has in some cases litigated against such corporations.”

Although not illegal, the challenges this business practice sets up can have catastrophic effects on business performance.   How a business measures its sales results and how sales people are rewarded can have a dramatic impact on channel stuffing behaviours.  For instance, if sales people are only rewarded on the volume of sales they send into the market, are tied to unrealistic sales quotas that do not match market expectations combined with no accountability for margins, returns, accurate forecasting, account maintenance and retention, then the ideal conditions for a channel stuffing are in play and we are in real trouble.

To avoid falling into this trap, you may like to analyse the following amongst other things:

• True cost of sale
• Margins and volume discounting arrangements
• Returns policy
• Product recall conditions
• Trading terms and conditions
• Sales incentive schemes
• Sales performance expectations
• Customer service policy
• Length of sales cycle

With you and your sales people being very clear about what is expected and checking for any competing motivations which may create undesirable behaviors will help you from falling foul of the channel stuffing nightmare.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

Run a mental checklist over your client base right now.  Who fits into the ‘good’ client list and who falls into the ‘bad’ client list?

It all really depends on what you define as good and bad.

As we know not all clients are good for your business. Some clients are a wrong fit for your business but could be a good fit for someone else;  therefore in of themselves they are not necessarily ‘bad’.

However, others are just downright bad for your business.

It is important to consider how much your ‘bad’ clients are costing you in terms of time, money, frustration, people and product resources, lost productivity, bad press, angst, legal fees, and tarnished reputation?

If you have too many customers falling under the ‘bad’ column you need to ask yourself, “How did this happen?”

Have you set yourself up as a magnet for overly demanding, time consuming, nit picking, miserly clients who do not see value in what you do or offer and seem to want a slave rather than a legitimate business partner?

Have you set yourself up to be taken advantage of by unscrupulous and unethical people looking for victims?

It is difficult to focus on your best clients if you cannot shed your ‘bad’ ones.

For example, there has been recent media attention on the rise in Businesses Pheonixing; the act of Phoenixing is where a new company is formed to buy the assets, contracts, and goodwill of the failing business for a reasonable market rate. The legacy debt is left within the old business which is then liquidated thus allowing the new Phoenix business to trade on, debt free. Creditors and Suppliers to the old business are often left with unpaid debts which may in turn lead them to suffer their own financial difficulties.  I am sure no one wants to be put at the mercy of Businesses Pheonixing (‘bad’ clients) if they can help it.

Chasing the ‘easy’ or ‘quick’ sale may be more trouble than it is worth especially if the prospect or client is not properly investigated in relation to their legitimate needs or their intentions are clearly defined.

So, what constitutes a ‘bad’ client?

Besides the obvious impact of bad debts, there are other criteria which constitute ‘bad’ clients. Here are some examples:

• They are bad credit risks with a track record of always paying late or not at all – they can be checked out by using reputable credit agencies that keep track of people and companies’ credit ratings.
• They are a poor fit with what you offer and what they need thus leading to misunderstandings, poor relationships and confusion – this is usually due to a poor sales approach and not properly understanding your client and their needs in the first place.
• They are overly demanding on your QA or Customer Service departments – the ‘nothing is ever right’ syndrome and all they want to do is complain.
• They ask for expensive prototypes or very detailed proposals with little probability of a significant purchase – what is usually happening here is that they are siphoning you for your Intellectual Property at no cost to them so they can either do it in-house or get someone cheaper to implement your idea.
• They only want to deal with ‘you’ and expect levels of service that do not go with their purchasing level – they expect first class service when they are buying ‘no name’ or house brand products at very small volume.
• They complain loudly, often, and publically to anyone who will listen and usually only for ‘effect’ not fact.
• They do not keep their promises and break contract conditions regularly.
• They take your IP and claim it as their own.
• They say one thing and then another – you never know where you stand with them and they seem to play games, trick you or set traps.

Don’t be fooled by these types of clients they are not worth it, no matter how attractive they look on the surface and how desperate you might be to get a sale.  Unfortunately, when times are toughest we can fall prey to these types of prospects or clients which can lead to more stress and less return on investment.

An experienced business banker once told me a story about an entrepreneur and business owner who was looking for a new bank to work with. On the surface this individual and his business looked plausible, charming and sincere, but when the business banker did his investigation, he discovered a litany of evidence – failed businesses, bad debts, frequent changing of banks, poor staff retention and staff legal issues and a myriad of other things that did not bode well for this prospect becoming a valid business banking client.  As you could imagine the aforementioned business banker did not proceed with that prospect.

If these types of business people continue to behave in this manner they will eventually run out of legitimate business suppliers or partners to work with and sadly if they do, they will usually pull up stumps and go and find fresh victims to exploit.

Another tell tale sign is that they will not have a history of any longstanding, viable relationships of any value or substance.

Many people have slated the sales profession as being ‘shifty’ but in truth most sales people and their clients are out to do the right thing by each other.  So, it pays for the sales person to also be on the lookout for the potential ‘bad’ client and do proper investigations. So don’t believe everything you hear. Do your homework.

So why not have a conversation with your sales team and run your collective eye over your client base to see if you do have any of these types of ‘bad’ clients on board?  Then work out a strategy to let them go, learn from your mistakes and don’t get mixed up with these types again if you can help it.

Maybe it’s time for a client spring clean.   It might just free up your time to find and work with more productive clients

Remember everybody lives by selling something.

Sue Barrett is Managing Director of BARRETT.

It’s time to get back to basics.

I don’t know about you but recently I have found myself getting more and more distracted by the latest trend and fads, especially the social media phenomena. My reason for this is that I have been trying to get my head around social media and specifically, the impact on the sales profession.

As you may have gathered, I like to keep on top of what is current, what is emerging, and what is still an idea. This is why I make time each week to do research as it helps me navigate my way around the present and into the future. However, I am finding there is so much to read, so much to get my head around, and so much to integrate into my business that it can take up a lot of time… and it only seems to be increasing.

I read recently that 20 years ago information was doubling every 5 years, 10 years ago it was doubling every 18 months and today it is doubling every 9 minutes.  There is a plethora of information – the trick, however, is knowing the right information to access.

For example, getting your head around the social media space and how Facebook, Twitter, Linkedin, and other online groups impact on the sales profession is a big job. This is why I think it is timely to stop and review the information I have gathered so far, make sense of it (where possible), and determine whether it can be of value to me and my business moving forward.

This is why I want to get back to basics.

As I wade through all of the information on social media, I predominantly want to get answers to a few simple questions:

• How can it help make us more and better quality sales?
• How can it help forge better relationships with our clients?
• How can it help us be more effective and competitive in the market place?
• How can it help our competitive advantage?
• How can it support our business strategy and make our lives easier (work smarter not harder)?
• How can it support our brand and increase visibility?

From my observation, there seems to be a great deal more written about social media and the Business to Consumer (B2C) space (simpler, transactional sales) than has been covered in the Business to Business (B2B) space (more complex sales interactions). As is my nature, I am usually the first to want to incorporate new things into my business and learn how it can add value, however once all the hype and excitement boils down it is important that we weigh up energy expended and value added.

From our discussions with other businesses, I am finding that I am not alone in my enthusiasm for social media or alone in my reflection of the time spent. Now, I am not proclaiming that we should go back to the Dark Ages pre the internet and shut out social media rather that we take a moment and consider how we can integrate the regular sales activities such as prospecting, face-to-face meetings, building real long term relationships and social media

While there are fantastic benefits to social media, many of our B2B clients are reporting that their sales teams are getting distracted and ignoring the tried and true tasks required to grow sales.

Getting back to basics in the B2B sales space means:

• Defining what type of clients you want for your business
• Knowing: WHO you need to be in front of? HOW you need to make contact with them for? HOW OFTEN you need to do it?
• Use your networks (where appropriate) to research and target specific referral sources, prospects and industry contracts
• Prospect, prospect, prospect for new business opportunities– for most people that means picking up the phone and calling both new-to-business and existing clients directly to make an appointment and secure a meeting
• Meet the client or prospect– find out what they really need and how they want to work with you
• Deliver on what you say you will
• Follow up with a blend of purposeful phone calls, face-to-face meetings, emails and other valued add support that they can benefit from
• Don’t make assumptions– speak to people directly and regularly communicate in person
• Use resources such as Linkedin, social media and a CRM with purpose to help you forge meaningful connections and networks

Getting back to basics does not mean throwing the baby out with the bath water, it just means that while we integrate new methods into sales, we need to make sure we are still doing the necessary ‘basics’ to keep the sales momentum going. At this point, some of the main things we see social media adding great value in are building networks, getting a message out, getting access to information and opinions, getting your brand out there, and stimulus response activities.

But as yet (and quite possibly never), do I see social media as a replacement to purposeful prospecting, purposeful client meetings, and purposeful business relationships.

The key word here is purposeful. Social media is most effective in sales when it is applied with purpose and in context of a bigger picture and plan. So as we go back to basics, I think we need to question ourselves as to the purpose of our actions. For instance, with more people accessing Facebook and Linkedin are we building business networks that will lead to better business opportunities via qualified contacts or are we just building networks for the sake of showing off a large number of contacts i.e. I have the most number of ‘friends’ syndrome.

So, I ask you these questions:

• How purposeful are your social media activities to your business?

• How can we make social media work for us in business rather than becoming a slave to it?

• How can social media enhance or hinder the sales efforts of business, especially B2B?

The social media phenomenon reminds me somewhat of the early days of the dot.com boom and how businesses were jumping in and riding the wave only to come crashing down, some learning a great deal, others worse for the experience.

I am not suggesting this will happen with social media but perhaps we should hasten slowly and make sure we do not throw out good, sound business practices for the sake of the new.  I urge sales people to continue with the fundamental, basics that still give a real return and begin to integrate, where appropriate, these new tactics into sales push and pull strategies.

Does this mean ignore social media? No, not at all but it does mean that we need to put it into perspective. So, let’s get back to the basics that make us real sales, real money and real relationships with the clients we want to work with.

And remember, everybody lives by selling something.

Sue Barrett is Managing Director of BARRETT.