How To Improve Next Year's Profits This Year

To improve next year's profits you will need to change what you did this year.

The success of the industrial economy was based on identifying what worked and then organizing the tasks as a process that could be repeated over and over again.  Our respect for and slavish adherence to this approach was ultimately summarized as: “if it ain’t broke, don’t fix it.”

My first morning in Sales was spent defining what I needed to do to achieve success.  That process relied on the experience of those who had come before me and went something like this:

90 telephone calls = 60 cold calls = 6 substantive sales discussions = 2 presentations = I sale = $2,500 in commission

Perfect! If I wanted to earn $75,000 a year, all I had to do was learn about my product, acquire sales skills and make 2,700 telephone calls.  So, that is what I did.  In fact, that is essentially what everyone in sales did because experience had proven it was all about the activity.  That was then.

When companies replaced receptionists and personal assistants with voice mail we found ourselves making more calls and connecting with fewer potential customers.  When the rules of civility changed and people neither answered their phone nor returned voice mail messages, it became necessary to make even more telephone calls.     As call activity increased to unsustainable levels and compensation declined, even those most committed to the established process were forced to recognize the need for change.  What is amazing is that it took so long for so many intelligent people to recognize the obvious … but it always does because those of us who are products of the industrial age are reluctant to change any enshrined process.

If worried about next year’s sales volumes, take a hard look at the ratios behind each task currently comprising your go-to-market/sales process.  When you identify worsening year-over-year ratios resist the temptation to ascribe the decline to temporary circumstances … you know, the ones outlined in Chapter 7 of the sales handbook: “no one is buying this year”, “we need new products”, “we sell quality products and no one wants quality any more” and, my all time favourite “we lost our major bid, but they said they’ll give us a shot next time”.  Instead of making excuses, look for what needs to be changed.

For the past few years we have been hearing that a significant portion of the sales process is completed through on-line research before a potential buyer will become involved with any sales person.  Those of us in the B2B space have been comfortable dismissing these data points, arguing the research is not relevant to our businesses because what we offer can’t be sold on-line; i.e. “ if we just make more telephone calls, we’ll be okay, right?”  Sound familiar?

If per person sales are declining chances are that tinkering with your established sales processes isn’t going to achieve the improvement you want.  Changing the commission program or, hiring new people might or might not bring temporary improvement, but real sustainable growth will only result when you commit to changing your established processes.

Despite all of the literature regarding disintermediation, the reality is that capable sales people are and will remain critical to your success.  But, they and you can’t be successful unless you’re willing to support them with better marketing, an enhanced on-line presence and overall greater visibility to the on-line community that is looking for your product/service even as you are reading these thoughts.  Your declining sales may well be a marketing problem rather than a deficiency on the part of your sales team.

When I was making those 2,700 telephone calls conventional wisdom suggested that “if we continue doing what we’re doing, we’ll get what we’ve had.” As we continue to transition from the industrial to the digital age that maxim should be rewritten as:  “if we continue doing what we’ve done, we’ll get less and less until we have nothing.”   For greater success next year, commit to critically challenging and changing what you did last year.

 Guest contributor Herb Saunders, President, American Appraisal is the national managing director responsible for all aspects of the Canadian operations.  American Appraisal combines creative thinking, innovative techniques and professional passion to provide clients with accurate, reliable and insightful valuation and valuation-related guidance.



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