Nothing surpasses the beauty and elegance of a bad idea. ~ Craig Bruce
When you’ve been in sales leadership for almost 20 years, you’ve seen it all. You’ve seen every different way that companies will try to improve sales.
There is one commonality in each company looking to jump-start lagging sales: they all start with well-intentioned people. Some plans are well thought out and well executed, which results in fantastic growth. Other yield little change and don’t move the needle at all. And still other plans have structural deficiencies and in some unfortunate situations lead to a further downward spiral.
The worst outcome is the third scenario where an intention to boost sales instead creates havoc and ultimately leads to a loss of revenue. Want to avoid these pitfalls? The following are the three sales strategies I consider “the bottom of the barrel.”
Cut the Price and Then Raise the Price
Price changes are inevitable in business and are necessary for a well-run organization. There should be, however, a pricing strategy that you build your business around which aligns with your company goals.
In times when revenues lag, there is often a waffling on how to approach pricing which turns into a desperate grab for new customers. I’ve seen companies move up pricing by 30% in one month to capitalize on high demand, just to lower it by 35% three months later when demand wains.
The result: customers become angry with the unpredictable fluctuations and leave to find a competitor to fill their orders.
The lesson: when setting price, look to balance market demand with the ability to generate enough revenue for projected revenue targets. When a price increase is necessary, do so in a manner that is perceived as reasonable and sustainable to your customers. Keep an eye on lead to deal conversion ratios to determine where that sweet spot is for your company.
More is Not Always Better
You’ve been there. Sales are slowing down and you’re looking for a way to attract new customers. Is it time to develop and introduce new products or services to grab back their attention?
At one point, I worked with a company struggling to regain their footing after expanding from three lines of business to now over 20. (Yes, you read that right. They increased their lines by 7-fold.)
The result: for this client I mention, the sales cycle went from three-four weeks to over ten weeks. The sales team lost its focus on their target audience and were trying to sell everything to everyone. The climate was one of utter frustration.
The lesson: it’s good to expand, just be careful at the rate you expand offerings or products. Take the time to understand your Ideal Customer Profile for the new offerings and how that will fit with current business. Limit new offerings and integrate slowly to maintain growth. Apple’s strategy of how they launched iPhone and iPad is an excellent example of how to build a long-term strategy. Although the technology is very similar, Apple staggered the launch (iPhone in 2007 and iPad in 2010). The result, a customer base that readily adapted to (and bought) both new products.
Don’t Give the “Why” Behind Big Changes
A critical component to a highly functioning salesperson is belief and trust in who they work for and what they sell. The fastest way to kill momentum is to adjust key components of your sales infrastructure (especially when it involves compensation) and not explain “The Why” behind the move. In one business, I saw a change in commission plan drop sales by 30% in just six months. That is startling by itself. It got even worse when the executive team decided to attempt another change in compensation mid-year, without a solid explanation to as way.
The result: anger set in among the sales team, and many of the top performers left the company. I don’t know of many companies who can afford that to happen.
The lesson: changes are inevitable in business. Sometimes it’s not good news, and it can be tough to hear. Make changes to sales plans, compensation, and other key components no more than once every 12 months (those changes don’t need to match your fiscal year). If you’re a business that is heavily weighted for Q1, don’t make changes at the end of Q4. Run your sales compensation to the end of a quarter that is slower if possible.
The Overall Takeaway: Avoid the “Bad Idea” Pitfalls
When you come to a crossroad in the growth of your company sales:
-Slow down and be deliberate with the process.
-Talk to your team members and get input from trusted influencers in your organization.
-Build a culture of continuous feedback, where the team feels comfortable giving and receiving feedback. You’ll find the blend of insight that can be so valuable.
It also may be worthwhile to engage a company that will bring experience and an outside perspective that you might not have within your own business. Empirical Consulting Solutions often gets involved for that very reason. We’ll look at your company with a fresh (and innovative) perspective, and give you both insight and a plan forward to help you achieve your goals.
Bill Morrow is a Managing Partner at Empirical Consulting Solutions. He is a seasoned sales leader with more than two decades of successfully driving growth in companies of all sizes.
Bill can chat further about any questions you have and would love to hear your sales stories – both the successful ones, as well as the ones that you wish you could change. He is also happy to learn more about your situation – and he and the ECS team might be the fresh set of eyes you need to look at your company in a new light.
Connect with Bill or any other member of the ECS team at firstname.lastname@example.org or (610) 994-1139.