What will it take to manage sales well in 2008? Certainly,
the industry will need to adapt to the new market environment
created by the events of 2007. This article focuses on the ways in
which seven critical areas of sales management interrelate –
enabling companies to map today and plan tomorrow.
The first step is to acquire good market information. How well
do you understand your marketplace? Many organisations still rely
on their sales force to keep them in touch with the mood of the
market – but how often do their senior managers get feedback first
hand from clients and prospects?
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Good market information is key to the next step – effective
sales strategy and policy. Have you defined the right sales
strategy for 2008? Have you communicated it to your sales team?
What is your customer story? In times of change it is usually
wisest to refine your strategy for key accounts – the strong
relationships that can see us through turbulent times. However,
those accounts are also usually the prime targets for your
competitors.
Review your resource allocation and customer segmentation. One
bank-owned lessor is redefining its clients to identify those who
are likely to be making strategy-based decisions over the coming
year (as opposed to those who will be making more ad hoc
decisions).
Review your product mix. Which are the products that will allow
you to hold margin, differentiate your offer – and focus the client
on value rather than price?
Ensure that you are communicating your sales strategies and
policies clearly. A recent sales management survey for
Leasing Life highlighted the widely varying extent to which the
best and weakest salespeople understood their companies’ sales
policies – and revealed the risk of sales people creating their own
policy, best expressed as: “I will sell the products I know best
and that pay me best to the people I know best, ensuring that I
make the maximum amount of money for the minimum effort”.
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By GlobalDataThe next step is annual budget- and target-setting. This may
prove a challenge, as many management teams and shareholders are
now used to demanding and getting double digit growth. In October
2007 analysts at Credit Suisse were expressing the view that UK
banks could suffer a 15 per cent drop in income*. This may or
may not prove to be true – but it certainly indicates that sales
managers should be thinking long and hard as they set and
communicate targets. ‘Past performance is not a guarantee of
future performance’.
With market assessed, policies communicated and targets in place
the core job of the sales manager begins: to manage the quantity,
direction and quality of sales activity. Let’s look at these
in order.
Quantity of sales activity is not the sole driver of sales
success, but it is key. The Leasing Life sales
management survey showed that top leasing salespeople spend on
average 2.4 times more time with customers and prospects than the
weakest sales performers. This is not a coincidence. Your
sales people are an expensive asset. Ask yourself what you
can be doing to ensure that they are spending the optimum time
engaged in active selling rather than on the ‘displacement
activity’ it is so easy for a salesperson to fall into. Use
technology and/or lower paid staff for more mundane, lower value
activities. Help your sales people with their time planning
and activity management.
The direction of activity is the point where sales policies are
converted into practical planning and execution. Those sales
organisation who, in 2008 focus their resources on communicating
the right solutions to the right individuals in the right
organisations will have a far easier time than those who choose (or
try) to sell randomly. Be selective. Be focused.
If you do not already use one, introduce a product density
matrix. Simply position all your products along the top of a
grid and all the potential buying points of a customer down the
side. At each intersection ask yourself: “Could this product
be relevant here? Are we actively selling? Have we tried and
failed? Are we already successful?” If there is no sales
activity where, potentially, there could be, the matrix will help
to reveal the opportunity.
The third aspect of activity management that should be on sales
managers’ radar in 2008 is quality of activity. This includes
measures such as time lag, conversion ratios, and cost of
sale. Monitor these and watch for changes. For example,
when budgets are tighter, buyers often demand more proofs and may
make more comparisons. Expect these challenges. Prepare your
proofs and analyse your pipeline more critically.
Look for ways now to differentiate your offer. It is important
to prevent your solution being viewed as a commodity (or ‘more of
the same’). Differentiation refocuses the customer on value
over price. Consider strengthening your sales arguments, and equip
your people for more assertive selling. Emphasise the quality as
well as the quantity and direction of your sales activity.
The final piece of the jigsaw is competence. Many leasing
industry sales people will be required to work differently in 2008
– and should be equipped to do so. This may mean fine-tuning or
refreshing, or perhaps a radical restructuring of the sales process
and its supporting skills.
Effectively selling in 2008 is likely to demand a skills
overhaul. Action must be taken to ensure leasing industry sales
teams are in the best shape to meet the new challenges and
opportunities they face.
*Source: Financial Times 22/10/07
Richard Higham is international sector head for financial and
professional services at sales improvement consulting specialist
Mercuri International.
Contact him at: Richard-higham@mercuri.co.uk;
telephone +44 (0)7712 588757
