Sales Strategies for Challenging Times11th March 2019
It’s clear that selling today is different from the past! It looks like it will never be the same again. What sales strategies will be most effective in these challenging times?
There are those politicians and economists who say “there is no road map, it’s all guesswork”. This may be true in macro-economics and geo-politics but I don’t believe it’s true for the strategies that underpin our selling. The questions are hard.The answers are not easy either, but they are there.
In this article, I am going to offer 10 practical things you can do today to drive your sales strategy and generate results.
1. Talk about the right things
2. Check your product mix
3. Generate cash
4. Get close to your customers
5. Be active
6. Be selective
7. Go for market share
8. Manage your pipeline
9. Manage you pricing
10. Upgrade your sales people and your sales processes
Talk about the right things
Identify what really matters to your customers. What are the burning Strategic issues that they are facing. Usually there are five +/- two Strategic issues. Few companies can handle more than seven strategic priorities and few responsible leadership teams have fewer than three on their agenda.
Position your organisation appropriately for changing times. Emphasise resilience, innovation, risk management.
Focus on “white space” – the areas that your customers need to be considering and reshaping. Demonstrate how you can work with them to secure a changing future.
Check your product mix
Rethink the Boston Box. The thinking that helped you last year may not help you this year!
Option 1: Sell what you’ve got
Look at your Cash Cows. Maybe they seemed dull and boring last year. Maybe there’s cash lurking there that would be very attractive today. I was returning from a pitch. Five us were in our partner’s new people carrier. He explained that he had been sold on the state-of-the-art model by a salesman who had explained that yes he could have the basic model but it was a special build that would take 10 weeks or he could have this one from stock now. Instant gratification and a higher spec! He went for the superior model now.
The sales-person had not only generated higher revenue but he had achieved quicker cash flow, sold existing stock without having to invest in further production, avoided the risk of the sale slipping away during the delay and made sure the customer was happy! Do you have the opportunity to sell the products and services that already exist rather than those that take extra time, resource and money to create?
Option 2: Innovate Selectively
Look again at your Question Marks Perhaps now is not the time to keep pushing on those high potential opportunities that are still a long way off. Be tough on yourself and analyse the resources needed to to open up that market or launch that product.
Is it wiser to park the products on the far right of your Boston Box and work harder on driving real money from the more mature question marks? But you know your customers. It could just be the time to outflank your competitors with your new offering. Instead of going on and on about the “same old same old” do you have an innovation you can accelerate? An innovation that will save your clients money, manage their risk, enable them to achieve their goals?
Option 3: Are your Dogs ready to bark again?
One thing’s for sure. Markets are changing. Do you have products in your portfolio that you have written off as dogs: low share of a declining market? It could be time to review and renew. A few years ago wood burning stoves would have been seen as traditional products for a declining market – but they are now dynamic products with high tech innovation and intriguing design addressing an exciting market. Maybe you can teach an old dog new tricks!
If you want to make yourself popular in your business then bring in the cash. Cash is power in changing times. So look for ways to shorten the sales cycle. Look for ways to structure payment schedules. Identify your less cash-strapped customers and focus on them. Be willing to trade variables that may be valuable to the customer but which cost you less in return for cash. Focus on solutions that will create ongoing cash generation whether from consumables, spares or service. Cash is what it’s about.
Get close to your customers
A friend of mine is a business academic specialised on strategies in the insurance industry. Over a drink Robert was telling me about a session he had run with a group of sales directors from a major European insurer. Over the years the company has built up a highly successful network of distributors. This had driven high levels of income over a long period. But now a combination of factors was seeing premiums drop off: baby boomers coming up to retirement, performance of equity markets, fear of redundancy, changing buying behaviour.
The group agreed with Robert that they had probably lost something vital during the good times: “customer intimacy”. They had delegated real customer understanding to their agents, their brokers, their sales-force. The company’s customer information had become sketchy, second-hand and stale.
Once they recognised this they spent the rest of the session working on ways in which they could regain that “customer intimacy”; understand their customers’ changing needs and preferences and communicate the company’s commitment to their customers. I then explained to Robert how I spent 3 days away with board of a North European insurer who had identified that while they could not always compete with the global players on “operational excellence” they could win dramatically through their customer intimacy.
Our three day session was entitled “Leading Extreme Customer Intimacy”. How’s your “Extreme Customer Intimacy”?
This is not a particularly sophisticated point but it is an important one! When times are tough many salespeople respond by reducing their call rate, retreating into more analysis and more preparation. Yet more activity is critical to success in difficult times.
Not every customer is in a position to do business with you so salespeople need to see more customers. Decisions are delayed and taken to a higher level so salespeople need to make more calls to win business. More sales will fade away in the pipeline so they need to be pouring more opportunities into the pipeline.
Sales success will not come only from driving activity (“drive faster, sleep less!”) but the correlation between quantity of sales activity and strong sales results can not be ignored. In a survey of active selling time in 102 companies, the average % of time spent actively selling was 28% for top performing salespeople but only 14% for under-performing salespeople.
What can you be doing to get your people out there selling more?
Be more selective
This point may seem contradictory. You can’t afford a shotgun approach. So it’s about increasing the quantity of activity but stressing the direction of activity. Selling is expensive and it uses up cash before the sales income flows in. The average cost of a sales visit in UK is currently £120. You need to refocus on the opportunities that offer you the best chance of success.
Your selection criteria may well need to change. Financial strength and a sound cash position may become a top criterion. Certain sectors may suddenly be less or more attractive in changing times. Speed and simplicity of decision making may be of critical importance. Revisit your selection criteria. Consider analysing your customers on a matrix that includes both attractiveness and ease of sale.
Make sure your salespeople are focusing on those places where you have the best chance of winning.
Go for market share
If you can afford it, now is the time to build market share. The argument is that when the economy turns you will have gained massive competitive advantage. We read daily of companies (some very big ones) retreating from markets. “We will seek to sell businesses in countries where we do not believe we can achieve market leadership or at least gain critical mass.” – so read one strategic review.
As competitors withdraw you may have the opportunity to move in or move from secondary to primary provider. If you have financial strength you may be able to win share of wallet and demonstrate commitment by improving your terms of trading just as your competitors are making it more difficult to do business with them.
Now may be the time to move in on prospects who are considering managing their risks by broadening their supplier base. Other companies may well seek to a manage risk by consolidating their supplier base, removing expensive-to-service smaller suppliers and concentrate on optimising terms from a few secure suppliers. You may have the opportunity to significantly increase share of wallet. Do you have the potential to grow market share with the type of customers that will give you future competitive advantage?
Manage your pipeline
Sales are taking longer to convert and there is uncertainty up to the last moment (and even beyond). A partner in an international professional services firm was bemoaning the fact that phase 2 of a project which was a “done deal” 5 months ago is still not signed and a dictate from the CFO about cost-cutting may put the whole thing at risk. Now is the time to be actively managing your company’s pipeline.
Ask harder questions of sales people and ask them more often. The classic salesperson’s response “Trust me boss: it’s massive, it’s for sure and it will close any day now” was never acceptable. Now it demands to be challenged even more! Maybe you should instigate the active involvement of sales management or a second relationship manager on any opportunities in your pipeline above value x or which have been stuck for more than x days/weeks.
Be rigorous in identifying whether there is a “compelling event” which will increase the speed and likelihood of conversion.
Manage your pricing
Now may be the time to revisit your pricing strategy. You may choose to sacrifice volume for profit and go for a premium pricing strategy that makes you more money out of less activity. Or you could recognise that volume is the lifeblood of your business, that the key thing is to maintain throughput to maintain investment in production capacity or to retain a skilled workforce.
The pricing strategy that has worked for you in the past may not be the right pricing strategy for today and tomorrow. Critically you may need to re-equip your people with price-handling or negotiating skills.
Upgrade your selling
Paradoxically this may be the time to invest in your sales force. This could take 2 forms. Some really good people who you could not have lured away from your competitors in the past may be available now. Equally you may need to be investing in equipping your existing sales force.
Changing markets require changing competences and what got them to where they are won’t keep them there or get them ahead. Look for ways of working that give payback quickly; at worst within the year, but ideally covering costs within one or two quarters.
When things are easy, random selling may be less of a problem. But when resources are tight and business is hard to find and win then sales processes are essential. If you have a sales process in place, ask yourself if it is fit for purpose. Challenge the underlying assumptions about time-lags and conversion ratios that underpin your sales process. Ask yourself if your process still matches your customers’ buying cycles, and if not, change it. Consider whether your process plays to your competitive strengths.
For example your competitors may have reduced the number of specialists out in the market place. Maybe by adapting your sales process to involve your specialists earlier, you gain significant credibility and position yourself to win more opportunities. Or maybe you need a process that involves senior managers in a disciplined and effective way at critical points. A hard look at your sales processes may be one of the most cost effective ways of improving your sales effectiveness.
Selling in changing times presents significant challenges and significant opportunities. Not all these ideas will work for every business. Indeed some bought as you seek to sell more and better in a changing world.of them are quite contradictory! But we hope this piece will give you food for thought.
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