How to Boost Your Sales Power in a Downturn

Word/Diana. Ledingham The more the economy slumps, the more businesses need to do their best to capitalize on every opportunity to make money, and unfortunately, competitors think the same way. If a business is not willing to discount for business, and at the same time is not willing to cede market share to an eyeing competitor, it needs to find ways to win market share without giving away too much. A powerful way to increase sales revenue and profits in difficult times is to improve the performance of the sales team. A more focused sales operating model can create hope for securing revenue and profits while improving under heavy pressure.　　So, how should this be done? The key is a numbers-driven approach to improving the effectiveness of the sales organization, which we have summarized in a framework known as TOPSales (Top Sales Approach), which encompasses getting to the heart of the customer's needs, optimizing tools and processes, performance management and sales resourcing. This approach provides executives with a practical set of tool levers that, if applied systematically, will enable them to realize both increased sales and increased profits. The following are four sales strategies based on the Top Sell approach: 1. Targeting customer needs: Draw a "hot map" and pay special attention to the "hot spots" Each company has its own best customers, who generate the greatest profitability for the company and are the most loyal customers. Every company has its best customers, those who generate the most profit for the company and who are also the most loyal. They are the most loyal customers. Everything they offer - products, services, brand, customer experience - is exactly what they want. The sales generated by such customers are called "good revenue," which is predictable and profitable, and creates the potential for future expansion. The opposite is "bad revenue," which comes from customers who don't care about the company's core business proposition. They want overly personalized and complex products, or generous discounts, so the sales team loses its strategic focus. Distressed revenue can be tempting, but the truth is that no company can afford all the explicit and implicit costs involved.　　Companies generally identify their best customers by analyzing the odds of winning, revenue, relative market share, and segment yields. A downturn requires a more in-depth measurement of these metrics: which customers maintain consistently strong purchasing power through the downturn? Which customers have large cash positions or easy access to credit, or both? More importantly, find out which companies should be the company's best customers, even if they have not done business with the company in the past. In a downturn, while many companies are reevaluating their suppliers, you have the opportunity to take market share away from burnt-out competitors. Economic downturns affect industries, regions, and companies differently, and it's important for companies to know not only who their best customers were, are, and will be in the future, respectively, but also how such new perspectives will affect the potential size of their own customer segments.　　In a downturn, high-potential customers are the "hot spots". Knowing who these potential customers are allows a company to create a "hot map" of the market that can be used to guide sales actions. The sales team can identify the needs of these customers during a downturn and sell them the combination of products or services that best suits their needs. For example, promotions should be centered around goals that increase productivity, provide a quick return on investment, or have costs that can be covered by the customer's operating budget rather than being constrained by capital budgets. Everyone who has contact with customers should focus on these "hot spots" with the goal of retaining these high-margin customers and stimulating new demand. For example, a few months ago, a broadcaster refocused its ad sales team on a few core customer segments, including healthcare providers, which were less affected by the economic downturn, and specialty retailers, which desperately needed to use advertising to address the decline in consumer spending. After just two months, the broadcaster's sales in these two businesses had increased by 90 percent and 450 percent, respectively.　　As long as the company's sales representatives stuck to the pricing guidelines, this targeted sales strategy was bound to be profitable. During economic downturns, sales managers need to be especially mindful of the potential loss of profits that can result from loopholes in pricing. Well-planned strategic promotions to maintain share in key market segments may make some sense, but discounts or other forms of business spending can get out of hand without close management attention. One appliance manufacturer found that dealer discounts, product demonstrations, price promotions, and rebates were inadvertently sharply reducing the actual average price to 57 percent of the market price. After analyzing the situation, the company reduced total discounts and injected a portion into high-growth customers, resulting in a 20% increase in earnings before interest and taxes (EBIT). Defining a customer's value proposition in terms of need enables these quick-adjustment initiatives to focus resources and efforts on managing the customers that will make the most difference when sales are down and earnings are under pressure.　　Optimizing Tools and Processes: Enhancing Channel Management During economic downturns, sales cycles can lengthen, sometimes quite dramatically. Potential customers express interest but do not commit to buying, and existing customers verbally commit to buying but do not place orders. Cash is tight everywhere, and purchasing specialists act rather cautiously as a result. Sales reps may think they have well-established sales channels, yet to the sales manager, these channels, while seemingly full of honey, don't actually harbor many business opportunities.　　Tight channel management coordinated with hotspot mapping can help a company improve the success rate of its in-progress business. The sales team has three important tasks in this area: screening each sales opportunity; ensuring that prioritized projects are supported by appropriate marketing, sales, and executive support; and tracking the progress of the projects against their goals.　　-Screening: A hotspot map has some obvious benefits for account planning, but it also allows you to analyze existing channels in detail. Managers can remove sales opportunities that don't fit the hotspot map, allowing sales reps to focus their efforts on those that are more profitable. With longer sales cycles, sales resources are spread over more customers, so companies need to make sure that such allocations are for the right target customers. Managers also need to make sure that sales reps are giving an honest assessment of how well sales assignments are being accomplished. The key point here is to anticipate, track and discuss major opportunities carefully. Even if the time consumed increases, the company should have internal benchmarks for conversion rates from one stage to another, as well as historical success rates relative to key competitors, and apply these metrics rigorously.　　-Support: Many companies have realized that the economic downturn is a good time to move to consultative selling, thereby identifying and stating sales opportunities that are harder for less astute competitors to respond to. The marketing and sales materials used in consultative selling can be tailored to the needs of the client. For example, the sales representatives of the broadcasting company mentioned earlier won customers by using market research and messages designed for each target group. In the consultative selling process, sales reps describe ads to clients that are customized for them, down to length, frequency, time slots, and cross-platform (web) advertising opportunities-all in order to maximize the impact of those ads on consumers.　　-Tracking: Every company tracks potential sales opportunities and closed deals. But very few companies take sales tracking deep into the operational rhythms of their sales organizations. Companies such as GM, IBM, and Cisco have designed programs such as "digital cockpits" to fast-track routine channel reviews and analysis. The need for current information is especially acute during economic downturns, when sales organizations need to react quickly to changes in the marketplace. An executive in the computer industry said, "Around 2000, we implemented a full suite of sales steps and channel management systems that helped us during the 2001 economic fluctuations and became a savior in our ability to maintain our original performance."　　There are a number of automated tools on the market for conducting business tracking. the growing popularity of SASS (software as a service) means that companies can buy automated tools on a buy-it-now basis, which can be a tempting option when cash is scarce, but nonetheless, it's not so much the technology or tools a company chooses that are critical, but rather the management processes and rules and regulations that enable the technology to make a real difference, including a systematic approach that includes a systematic approach to management and compliance, from leaders to sales reps. Systematic communication channels from leaders to sales reps, routine and detailed customer and channel feedback, rigorous tracking of customers' willingness to buy, and tracking of their current cash flow and credit status. When severe economic shocks hit their industries, some companies created "deal rooms" to ensure consistency in the implementation of such systems, clearly defining the roles of each function in the pursuit of revenue.　　3. Performance Management: Scope and Targets in Downturns Generally speaking, sales managers define a clear scope and set targets based on a combination of historical performance, empirical intuition, and headquarters' requirements. If headquarters wants 10% revenue growth, then each rep's task metrics will be set 10% higher than last year. The original approach no longer works, even if the timing is perfect. Forward-thinking companies take a more scientific approach to managing sales.　　At Aggreko, the North American arm of the U.K.-based equipment rental company, executives gather key regional business data, calculate the company's share of each market, and set growth targets. These factors affecting each of the company's markets include oil refining, home construction and more. Armed with this data, the regional sales manager had a clear picture of each rep's marketing reach, customers, and task metrics by multiplying the size of the potential market with each target market share. Iterative negotiations between local sales reps and senior managers ensured that the target assignments for each rep were both realistic and aligned with the company's overall goals. This goal-oriented approach resulted in a 90% increase in Aggreko's sales capacity within a year.　　The need for this type of data is even more pressing in times of economic downturn. Does the marketing scope align with the hotspot map? Are high-performing sales reps being left out in the cold? Are mission metrics still realistic in the new landscape? A networking equipment vendor that had successfully turned around declining revenues in 15 different industry segments but, based on a hotspot map that showed that the vast majority of revenues and profits came from five of those segments, redesigned the scope of its marketing and reset its metrics accordingly.　　Companies can develop scorecards for sales reps and managers to help them track their performance. A sales rep's scorecard could include measures such as: how much profit the company can make from the customer in the current situation; how well the sales rep is progressing toward achieving the mission metrics; the soundness of the pipeline at each stage; and the quality of account planning for strategic accounts handpicked from a hotspot map. The sales manager's scorecard, on the other hand, can include total profit and reps' turnover, as well as performance measures for each sales rep under their management.　　Sales Resource Allocation: Aligning Resources to Today's Landscape When consumers are wary of buying, sales managers are faced with two serious challenges: maximizing the amount of time reps can spend presenting the benefits of their products to customers in person, and tightly controlling the total cost of goods sold. Effective allocation of sales resources will help achieve both of these goals.　　To maximize the time spent face-to-face with customers, look at the hotspot map: the hotspots show exactly where consumers are most likely to buy, and where the best sales reps are needed - to sell the product, not to travel or talk about it. It is important to calculate the amount of time a sales rep spends face-to-face with a customer out of the total time spent selling, and if it is less than the time managers expect it should take, or less than the benchmark time in the industry, then consider transferring some of the sales rep's administrative duties to support staff, rearranging the marketing scope to reduce transit time, or streamlining the systems used by the sales reps. A few years ago, Cisco's sales executives set a goal of reducing sales reps' non-selling time by a few hours per week, which was accomplished by the IT department. The ensuing improvements in Cisco's sales support systems have yielded millions of dollars in additional revenue just by streamlining the administrative work of sales reps.　　The economic downturn may also require companies to streamline and rationalize their sales resource allocation. If done correctly, it can be a powerful lever for refocusing sales efforts and increasing productivity. Most companies utilize diverse sales channels-corporate or other direct sales, telemarketing, distributors or value-added resellers, and Internet sales. In many industries, mergers and acquisitions, as well as ongoing product extensions, have created a need for specialists to fill the generalist's void in this area. Hotspot maps with detailed information on behavioral patterns and profitability of customer segments and micro-segments, as well as data on the effectiveness of current sales behaviors, allow sales executives to decide how to allocate different resources to achieve the best results. To keep costs low, a company can increase its telemarketing pipeline to replace underperforming in-store sales reps. For example, Aggreko now answers consumer inquiries about daily product rentals through Web or telemarketing, while inquiries about large, consultative programs are handled by professional sales representatives.　　This may also be a good opportunity to strengthen partnerships. Network Equipment, as mentioned earlier, has been able to realize increased revenues in part because it has worked with a number of carefully selected business partners to focus its efforts on business development and marketing activities. For example, it had bundled a computer networking solution with personal computers and servers from the same original equipment manufacturer (OEM), whose target market segment coincided with that of the network equipment company. Their partnership was not a simple affair: both parties carefully orchestrated **** the same marketing strategy, events, training, fine incentives for each organization, and **** the same channel plan. This carefully planned collaboration ultimately paid off handsomely: the network equipment company's sales tripled within nine months of working with its partner.　　Preparing for the Recovery The economic downturn doesn't last forever. When the economy starts to recover, the company's sales team should be prepared to capitalize on the pent-up demand. Companies that succeed in the midst of or in the wake of economic turmoil usually poach great sales talent from competitors, or perhaps even acquire companies and integrate the best sales reps from the acquired company with their own.　　In either case, the Top Sales Approach can help sales teams achieve high performance. It focuses on enabling sales teams to systematically collect data and then use that data to set goals and quotas, manage marketing reach and channels, and safeguard the execution of prioritized projects and consistency of process. It helps companies identify the right mix of sales professionals and generalists to prepare sales reps to sell customized products and services to companies in economic downturns.