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8. February 2010 by Dan Trudell.
The word on the street, real or imagined, is that the economy is in trouble. How severe and for how long is anybody’s guess. So, what can you do to maintain and grow your business, regardless of external economic conditions? Superior sales teams produce superior results in good times and bad. By implementing a more effective selection process, you can improve the quality of your sales team which will produce more revenue year in and year out.
So, how does a company build a superior sales team? There are 4 factors that must be present for a superior sales team to come together. These four factors are:
If any of these factors is missing, it is impossible to build and sustain a high performing sales team. I will expand on each of these factors and then share some action steps that any company can take to begin building a more effective sales team.
First among equals is Successful Personality Characteristics of your sales people. Conventional wisdom has been that to improve sales performance, a company needs to train their people. Before you train them, however, the people you are investing in must have personality characteristics that, coupled with sales training, will drive performance. Examples of some of the key characteristics that have been correlated to superior sales performance are energy level, resilience, optimism and follow through. No amount of “sales training” will overcome missing success characteristics.
Second are sales process skills. With the right sales people that possess the necessary personality dimensions to be successful, training in how to sell can be worthwhile. A common sales process involves 6 steps:
Too often, sales training has been viewed as the “silver bullet” that can make anyone into a superstar. In my 20+ years of experience, 2/3 of the sales training time and money are wasted on people that do not have the “right stuff” to be successful in sales!
Third, is excellent sales management. Excellent sales management is much more than setting sales revenue targets and assigning accounts. Excellent sales managers understand what motivates each individual sales person and use that knowledge everyday in assigning accounts, developing incentives and contests and in how to relate to each sales person. As an example, some sales people are motivated by affiliation; they need to have time to interact with others on the team every day. Others like to be given their assignments and be left alone to complete them. Treating all sales people the same will guarantee that as a sales manager you will be MIS-managing a good portion of them. In addition, on going feedback is essential; coaching on account strategy is another key factor that excellent sales managers regularly practice. Research has shown that excellent, effective sales managers can have as much as a 50% positive impact on sales performance!
Finally, understanding your industry, the market and the pricing structure and competitive options is important. Often, however, an inordinate amount of time is spent on this one aspect of selling. The truth is that perfect understanding of the internal workings of your organization will not make a person that is deficient in one or more of the first 3 factors successful!
So, how do you get started on the road to a superior sales team? The first step is to understand who is “behind the mask” when you are selecting a new sales person. Screening and selection tools are available today that can provide an enormous amount of relevant information to help aid your selection of sales candidates. It is important to keep in mind that any tool you choose to utilize in the hiring process must be valid, meaning that it accurately measures what it purports to measure; reliable, meaning that the results will be consistent; and lastly that it be job related.
There are many tools available today and as is the case with most things, some are better than others. A tool our clients have had great success with is SalesMax. SalesMax measures sales personality factors, sales knowledge and sales motivations and generates a recommendation for the hiring authority. It also generates specific interview questions to aid in “unmasking” the real candidate. A recent validation study done with SalesMax for a large, multi line insurance company found that those salespeople who scored in the best range sold on average over $200,000.00 more than those who scored in the avoid range.
For more information on SalesMax, send an email to dant@peakperform.net and put SalesMax info in the subject line. I will send you an assessment survey to see if SalesMax is a “fit” for your sales process and a sample report .
Posted in Sales, Sales Management, Growth Strategies, Talent Management, Financal Acumen | No Comments »
6. January 2010 by Dan Trudell.
Are you happy there?
Every day, you can find a range of views on business and the economy. Some indicators e.g. stock market, point to an improving situation. Others, e.g. employment rates, point to a different reality.
Regardless of the source, ultimately, the bottom line is how your business is doing…is it thriving (growing) or just surviving (no growth). A recent research report (Aberdeen Group, Dec. 2009) based upon over 1200 respondents pointed out one key difference between the no growth companies and high growth companies. Those that reported High Growth are 1.5 times more likely to be creating new sales channels or expanding existing sales channels than their no growth counterparts.
Further, the no growth/slow growth group was almost 2 times more likely to be concentrating on cost cutting than the High Performing companies.
No matter which pundit is correct regarding economic recovery, the gap is widening between those companies that are aggressively pursuing new opportunities in the market and those that are treading water. Continuing to “drift and float” while waiting for economic recovery may put a business at serious competitive disadvantage. The gap between the market leader and followers may be difficult if not impossible to overcome.
What is a business to do? In uncertain times it can be difficult to know exactly what to do and as a result do nothing. The research shows several steps that are low risk and can position a business for greater growth in the short and long term.
Peak Performance Associates, Inc. is focused on helping companies understand where they are now, where they want to be in the future and implementing actions to drive the change in people and processes to move in that direction. Contact Dan at dant@peakperform.net or call 608-835-9288 to sign up for a FREE Growth Audit. There is no cost or obligation for this analysis. Based upon the outcome, you will have a clear understanding of your current state and possible alternatives to move forward.
Posted in Sales Management, Growth Strategies, Business Growh, Business Acumen | No Comments »
1. June 2009 by Dan Trudell.
President Obama has promised his union supporters that he will attempt to push some form of EFCA (Employee Free Choice Act) through Congress this year. As membership in unions has declined dramatically over the last 20 years, union bosses are desperate to make it easier to recruit and organize smaller and smaller companies and/or work units within larger companies.
According to author Larry W. Bridgesmith, “Unaddressed employee grievances are the most frequent cause of union organization…Union prevention is simply good management in action.” Often, senior leadership is unaware of poor management practices at the frontline level for many reasons. Businesses have remote locations that are infrequently visited, leaders have “more important issues” to deal with and often, because there is no “noise” being heard, an assumption is made that everything is good!
Several questions need to be considered to determine if your company is potentially “ripe” for a union organizing effort:
· Does your organization regularly survey employees and probe around the relationship with their direct manager? And do you do anything with the feedback?
· Is there a path for grievances to be registered above the person’s direct manager if there is no adequate response from the immediate manager
· Are employees oriented to the value of direct communication with management and how important it is for employees, customers and the company for that relationship to continue?
If you are not examining the management practices of your existing frontline leaders and developing positive practices in that population, you will almost certainly attract attention of organizers if and when some version of this bill becomes law. (Google EFCA or Employers Free Choice Act to learn details of that proposed bill.)
Peak Performance Associates, Inc. is experienced in helping clients gather employee data, aggregate the data to determine if there are problem managers, and recommend and/or deliver effective development actions to rapidly improve leadership skills. We can also help companies incorporate assessment tools into the selection process for managers to identify skill “gaps” before promotion to a leadership position. And, assist in incorporating proper communication tools into the orientation process to lay a firm foundation of communication and the importance to the ongoing success of the business.
Don’t wait and hope that nothing will happen. The cards have been dealt; experts say that it is not “if” this act will be considered but when and because President Obama “owes” the unions and has a majority in both houses, something will be passed.
Labor law prevents a company from undertaking a process like this once any organizing activity begins. Don’t wait until it’s too late. Take positive proactive action now to reduce the likelihood of your most valuable assets radically altering the conduct and competitiveness of your company.
Dan Trudell is President of Peak Performance Associates, Inc. Since 1990, Peak Performance Associates has aligned people strategy with the business strategy of client companies. For more information on employee surveys, leadership development and selection/orientation processes, contact Dan Trudell at dant@peakperform.net or call 608-835-9288.
Posted in Selection, Employee Onboarding, EFCA, Employee Surveys, Development, Leadership, Business Growh | No Comments »
18. May 2009 by Dan Trudell.
In my last post, I suggested several “price” related ideas to keep you and your business financially solid during these challenging times. These focused on the revenue side of the equation; raise prices, negotiate multiyear contracts and mine existing customers.
In part 2, I want to suggest three more methods you can easily implement to improve financial performance and cash flow. The old adage that “Cash is King” has never been truer!
Strategy 4- Accelerate receivables
If you currently offer open billing terms to your customers and client’s, implement a “pay on completion” discount. A 2% incentive for cash on completion can be beneficial for both you and the client. You don’t need to send invoices, make collection calls and most important, you have cash NOW! Your internal bookkeeping workload is reduced as well as costs. The client saves money and must ultimately pay anyway. Set your business up to accept credit card payments if you haven’t done so. This can also aid in accelerating the cash to cash cycle!
Strategy 5- Reduce ASSETS
Most businesses accumulate an excess of idle, infrequently used assets, whether it is parts, supplies or equipment. All of this may have been useful in the past. However, if it is parts and supplies that have not “turned” in the past 6-12 months, consider taking a deep discount to move it out. If it is capital equipment, can it be sold or scrapped? Auctions, Craigslist and other surplus outlets abound for disposal of these items. In my experience, these assets will just continue to devalue over time while taking up space and time to inventory. The “rainy day” when that item is needed often never arrives. Having a portion of the value back in cash reduces the need for borrowed funds and simplifies life in general.
Strategy 6- Improve and document work processes
Are your best people able to do more work and generate more billable revenue? If so, do you know what they are doing differently to get work performed more efficiently? The easiest way to increase profitability and cash flow is to document best practices. Train others on those best practices and insist that they implement them all the time. Create a checklist, either paper or electronic, of process steps for the most common jobs or projects and have it completed by for each job. This can also serve as a quality monitoring system to verify for the customer that the work contracted for was fully completed. Productivity of the rest of the group should improve close to the level of your best performers within several months of implementation.
Conclusion
Sustaining and growing your business in good times and bad is always a challenge. If you work on both enhancing revenue, improving productivity and increasing cash flow, you can thrive in the tough times and move out aggressively in the market when the economy recovers. Knowing what to do is the easy part. It takes leadership to sell these improvements to your people and your customers/clients. The question remains the same; do you want to stay in business? If so, be bold and take action. If not, well, the choice is yours!
Posted in Sales, Growth Strategies, Financal Acumen, Business Growh, Business Acumen | No Comments »
11. May 2009 by Dan Trudell.
If you listen to the media, one could conclude that the entire country has ceased to function and without Government coming to “rescue” us, we will all be paupers in short order.
I disagree and regardless of whether the government has any direct impact on you and your business, I want to share three growth strategies that every organization can consider to not only survive, but thrive during and after the current economic turmoil.
Strategy 1- Raise Prices
While the temptation in tough times is to succumb to the demands for lower prices to retain customers and business, DO NOT DO IT! Let’s do the math to see why it is a fast track to disaster if you cut prices!
The calculations in the tables below show what happens under 3 different sets of conditions, a price reduction while maintaining a fixed dollar amount of profit, a price increase while maintaining that same amount of dollar profit and a price increase while maintaining the same number of jobs per year. Note that in all scenarios, the cost per job remains constant.
Discount Your Price
|
Price Change |
Revenue/ Job | Total Cost/Job | NetProfit /Job | Total # of Jobs/ year to Achieve Goal | Total Revenue/Year | Total Cost/Year | Company Profit Goal(Dollars) |
| Base | 1000 | 900 | 100 | 100 | 100,000 | 90,000 | 10,000 |
| - 2% | 980 | 900 | 80 | 125 | 122,500 | 112,500 | 10,000 |
| - 5% | 950 | 900 | 50 | 200 | 190,000 | 180,000 | 10,000 |
| - 10% | 900 | 900 | 0 | ??? | ??? | ??? | 0 |
This scenario shows what happens when prices are discounted from 2% to 10%. At a 2 % discount, this company must do 25 additional jobs to achieve the same $10,000 profit. At a 5% discount, a company must DOUBLE its job count to achieve the same profit and at a 10% discount, all profit is gone!
Increase your Price
Now, look at what happens when we institute a small price increase. In a tough economy, we may have fewer jobs; people may delay or cancel work they would normally have undertaken. However, you need to maintain the same profit level to pay all your obligations and stay in business.
|
Price Change |
Revenue/ Job | Total Cost/Job | Net Profit /Job | Total # of Jobs/ year to Achieve Goal | Total Revenue/Year | Total Cost /Year | Company Profit Goal(Dollars) |
| Base | 1000 | 900 | 100 | 100 | 100,000 | 90,000 | 10,000 |
| + 2% | 1020 | 900 | 120 | 83 | 84,660 | 74,700 | 9,960 |
| + 5% | 1050 | 900 | 150 | 67 | 70,350 | 60,300 | 10,050 |
| + 10% | 1100 | 900 | 200 | 50 | 55,000 | 45,000 | 10,000 |
In the table above, we show what happens when we modestly increase our fees by between 2% and 10%. Notice that with only a 2% fee increase, we can make the same net dollar profit with 17 FEWER jobs! With a 5% increase, we can make the same net profit doing 33 less jobs! So, if we anticipate less volume of business, we can maintain our necessary level of profitability by slightly increasing our prices on the business we do have!
Increase Price & Maintain the same number of jobs
Finally, let’s see what can occur when we are able to maintain the volume of work AND increase our fees. This scenario indicates that when the number of jobs remains steady, revenue will go up slightly, but profitability is greatly improved.
|
Price Change |
Revenue/ Job | Total Cost/Job | Net Profit /Job | Total # of Jobs/ year to Achieve Goal | Total Revenue/Year | Total Cost/Year | Company Profit Goal(Dollars) |
| Base | 1000 | 900 | 100 | 100 | 100,000 | 90,000 | 10,000 |
| + 2% | 1020 | 900 | 120 | 100 | 102,000 | 90.000 | 12,000 |
| + 5% | 1050 | 900 | 150 | 100 | 105,000 | 90,000 | 15,000 |
| + 10% | 1100 | 900 | 200 | 100 | 110,000 | 90,000 | 20,000 |
The real question you have to ask yourself is “Do I want to be in business when the economy turns around?” If yes, implement a small price increase, DO NOT DISCOUNT!
Strategy 2- Offer Multi-Year Bundles
If your business is one where clients need your services periodically, whether it is monthly, quarterly or annually, offer an incentive to commit to a multiyear agreement. Craft a bundle of “extra value added” services that will be included at no cost in exchange for a 3 year agreement for example. Most of us have other things we can do that have very low cost but high perceived value to the customers and clients. What you gain is a customer for the term of the agreement. Further, that is a customer that is not subject to being enticed by offers from your competition.
Strategy 3- Mine Your Existing Customers
One of the often overlooked areas by many service businesses is making past and current customers aware of NEW Technologies that you may have that others can’t or don’t have available. Ask yourself, what new products or services do we now offer that could save money or time? You know (or should know) what is happening in your field or industry. That’s why your customers trust and rely on your company. Reaching out to them with new services and products that can impact their life, finances or productivity can lead to more business or at least retaining their business.
Further, when you reach out, it provides an opportunity to ask if there are others they know that should know you and the quality of service you provide. This is sometimes known as asking for referrals!
Conclusion
Often when times get tough, we are tempted to overreact without thinking about the possible unintended consequences of our actions. Discounting prices to drive revenue is a fool’s game and has put many a company in deep financial difficulty or out of business. Multi-year contracts are a great way to carry a base of revenue over from one year to the next and stabilize your revenue streams. It further hinders your competitors’ ability to grow. And finally, nurture those existing customers and ask them for referrals.
If you put into practice these three simple strategies, you will not only survive these tough times, but when the economy rebounds, you will be a much stronger company than before!
Dan Trudell is President of Peak Performance Associates, Inc. Since 1990, Peak Performance Associates has aligned people strategy with the business strategy of client companies. For more information on how Peak Performance Associates can help implement growth strategies in your business, please contact Dan Trudell at 608-835-9288 or dant@peakperform.net.
Posted in Sales, Sales Management, Growth Strategies, Business Growh | No Comments »