Do you struggle with these barriers to revenue generation?
by Sharon Day,posted Aug 27 2012 9:01AM
Chances are you’re completely satisfied with your sales revenues and have no need to read any further. However, if you’re less than 100% happy with 2011’s finish and remain uncertain about 2012, it might be that one of these barriers is getting in your way of achieving the results you desire.
Turnover – Hiring the right people is job one. I once read a statistic that 40% of sellers don’t meet their quota, resulting in 30% annual turnover. What a drain and expense! I believe opportunity costs of 5x their prior annual earnings must be factored in to the expense of replacing a salesperson. Opportunity costs include business lost due to lack of contact/follow up; loss of momentum; undeveloped new business; cost of recruiting; manager’s time spent interviewing instead of developing; change and its added stress on the team. If you’ve experienced higher than 5% turnover, there’s a flaw in your hiring practices, manager/employee relationship, compensation structure and/or development efforts.
Unclear Strategy – Without a specific plan, the team will flounder, make errors in pricing and remain unclear about how they affect results. Sellers must understand your goals for each product, the absolute bottom-line prices and what their parameters are for leverage. They will either be part of your plan, or become part of someone else’s. We teach a strategic account management system that gets the team laser-focused and creates specific measurable goals and action plans for those accounts with the highest potential for growth. Be strategic and deliberate.
Taking Ownership – If your sellers tend to make excuses and your managers tolerate less-than-desirable behavior, your team lacks responsibility and accountability. The role of the salesperson is to diligently work to increase the company’s profits by generating the agreed upon revenues. When they are unable to do so, they should have specific reasons why based on their behaviors, need for help, etc. There should be a set guideline of expectations and metrics for each seller and they should earn the right to work their book of business. Managers should regularly monitor desired behaviors, administer rewards and consequences and ensure that the team has the tools and support needed to succeed.
Effort and the Will to do whatever it takes – Oftentimes we meet with business owners, managers and their teams who tell us they are quite comfortable. In those instances one thing is clear: these folks are not likely to make any behavioral changes or put forth extra effort to grow. When sellers get comfortable and lose the will and desire to continue to grow, business suffers. When effort doesn’t translate into results, negativity sets in which begets poor attitudes and behaviors resulting in poor performance, which reinforces the negative beliefs and typically leads to disengagement. This is another reason why expectation setting is critical. If you desire growth, your team must have a personal and professional growth mindset and be held accountable for demonstrating the same.
Need for Approval – As you read this article, someone on your team is likely offering something as added value or making a concession to close a deal. If this is part of your plan and accepted, know that the practice will need to continue. Sellers who have a high need for approval struggle with standing their ground and prefer to say what others want to hear. They have a strong need to be liked and accepted. However, although they may be well liked, when they concede the customer loses respect for them and no longer places the proper value on your product. If you suspect this could be hindering your success, we can discuss your options to turn this around.
Lack of Personal Development Plans – One of the best ways to keep employees motivated and engaged is to demonstrate that you care about them and are committed to helping them succeed. Providing individualized coaching and development plans is a powerful way to prove their importance. Yet, even though managers know that top performers require opportunities to achieve their personal goals, many times these individualized plans don’t exist. Commit to taking the time to develop each of your team members, you will be richly rewarded for doing so.
What’s Celebrated – Are you sending conflicting messages about what you value? Celebrating hitting budget with the team is okay, but only those who achieved or overachieved their goals should be singled out. Praise desired behaviors and reward expected accomplishments. Be clear about the difference. For example, if you celebrate new business, be sure your definition is clear, i.e., hasn’t purchased from any division in the past 13 months, or has never purchased. What you celebrate should relate to your stated goals and expectations.
While there are a myriad of reasons why companies don’t attain their revenue goals, after 25+ years of selling, managing and coaching, I’ve come to believe that these are the big issues plaguing sales organizations. If any of these apply to your team and you’d like some help, it would be my privilege to meet with you.