Managing Sales in Tough Times (Part 1)

As a sales manager, I was always amazed at the number of salespeople who sprinkled their performance reviews with all kinds of factors, with the aim at drawing me away from the subject at hand&#x2014;i.e., their sales results versus their goals. For example, as a defense against less-than-expected results, I would often hear phrases like "we are just too expensive," "I lost the sale due to politics," and "marketing hasn't created enough leads for me." And this was during good times!<br clear="none" /> <br clear="none" /> So when the economy really does decline (as is undeniably the case these days), it was easy for those same salespeople to add a few more points: "Customers just aren't buying enough." "The stock market just went into the dumper." "Buying decisions are taking much longer."<br clear="none" /> <br clear="none" /> Obviously, when times go tough, your customers are also affected and a number of very predictable things happen:<br clear="none" /> <br clear="none" /> &#x2022; Existing budgets get cut.<br clear="none" /> <br clear="none" /> &#x2022; Existing orders and contracts are reduced, or if possible, even cancelled.<br clear="none" /> <br clear="none" /> &#x2022; Signing authority tends to go higher in your customer's organizations.<br clear="none" /> <br clear="none" /> &#x2022; Only projects that show rapid cost reduction or very fast returns are authorized.<br clear="none" /> <br clear="none" /> &#x2022; Obtaining new business is even more difficult than usual, as everyone is "heads down" trying to cope with their own tough issues (downsizing, etc.).<br clear="none" /> <br clear="none" /> &#x2022; Phone-in leads reduce dramatically, or stop altogether. <br clear="none" /> <br clear="none" /> All of the above is unquestionably bad news, but many times new opportunities do emerge for the nimble to seize. For instance, after the tragedy of September 11th, when airlines, travel, and telecommunication segments were down, guess what? Security firms, defense, and teleconferencing and Web conferencing companies all expanded like crazy. <br clear="none" /> <br clear="none" /> So what can you do when times go tough? It may sound trite, but the whole thing really does become a leadership test of focus, accountability, and disciplined process&#2014;admittedly, not exactly what most salespeople dream of when they get out of bed in the morning.<br clear="none" /> <br clear="none" /> So let me share with you my thoughts about the leadership needed, plus the other techniques and tools necessary for weathering the storm.<br clear="none" /> <br clear="none" /> <b>Leadership </b><br clear="none" /> <br clear="none" /> This has to be the most overworked word in the English language. Here's how I define it for the purpose at hand:<br clear="none" /> <br clear="none" /> 1. Getting everyone back to a very simple mission&#x2014;exceeding sales goals by selling and implementing the company’s products and services.<br clear="none" /> <br clear="none" /> 2. Translating the sales goals into individual accountabilities for both sales and support staff.<br clear="none" /> <br clear="none" /> 3. Ensuring each person has a valid plan of how to achieve his or her accountabilities.<br clear="none" /> <br clear="none" /> 4. Removing people who either do not like their accountability, or who cannot see how to achieve it.<br clear="none" /> <br clear="none" /> 5. Constantly holding people to your mission, their plan, and to their accountability.<br clear="none" /> <br clear="none" /> 6. Removing any silly obstacles that company HQ raises (many times, this means ignoring ridiculous edicts and messages from HQ altogether).<br clear="none" /> <br clear="none" /> 7. Constantly recognizing and praising successes.<br clear="none" /> <br clear="none" /> <b>Focus and Accountability</b><br clear="none" /> <br clear="none" /> The foundation stone for everything I've been able to achieve in sales has been based upon adjusting attitudes and cementing these two items above.<br clear="none" /> <br clear="none" /> Although not the only way of doing this, my favorite way of adjusting attitudes is via a workshop that I created called "Focus on your Key Controllables." The premise of this workshop is that successful people&#x2014;i.e., ones who consistently exceed their goals&#x2014;do the following:<br clear="none" /> <br clear="none" /> a. Have simple, clear main goals (two maximum).<br clear="none" /> b. Focus on the things contributing to their goals that lie within their control.<br clear="none" /> c. Ignore almost everything else.<br clear="none" /> <br clear="none" /> The outcome of this workshop is to prove to sales professionals their job only exists to bring in their assigned dollar goals. Among their key controllables are: 1. having a valid and documented strategy and plan that clearly describes how to achieve the dollar goals (territory plans, as some call them); and b. performing selling activities often and well.<br clear="none" /> <br clear="none" /> Insofar as sales managers are concerned, their job also only exists to bring in their assigned dollar goals. Among their key controllables are: 1. again, having a valid and documented strategy and plan that clearly describes how to achieve the dollar goals; and b. managing the selling activities of their sales team, their partners, and themselves. <br clear="none" /> <br clear="none" /> Note that the key controllables do not include the economy, the weather, product pricing, the marketing department, or 101 other items that may influence the ability of sales to sell, but which are not within the control of sales.<br clear="none" /> <br clear="none" /> Behind these processes is a simple overriding philosophy: ensuring each person in the sales organization is able to see the answers to a simple set of questions on a regular basis (minimum monthly). Specifically:<br clear="none" /> <br clear="none" /> 1. How am I going to achieve&#x2014;or even exceed&#x2014;my dollar goals (plan)?<br clear="none" /> <br clear="none" /> 2. How am I doing on a year-to-date basis versus my dollar goals (YTD results)?<br clear="none" /> <br clear="none" /> 3. What is my realistic dollar outlook, both for the next 30 days and looking ahead to year end, compared to my goals (dollar forecast)?<br clear="none" /> <br clear="none" /> 4. What must I do, or change, to exceed my dollar goals?<br clear="none" /> <br clear="none" /> 5. Where must I improve myself to exceed my dollar goals?<br clear="none" /> <br clear="none" /> By arming everyone in sales with the answers to these questions every month, you’ll have the majority of the organization worrying about the right things.<br clear="none" /> <br clear="none" /> <b>Goals and Planning</b><br clear="none" /> <br clear="none" /> The first thing to ensure is that you, as the sales leader, have clear dollar goals for yourself (e.g., your annual sales revenue goal with a specific average margin), plus a realistic, documented plan of how to achieve these goals. If your traditional markets have dried up and new ones taken off, this is the chance to refocus your organization on the new opportunities, versus carrying on doing the "same old, same old."<br clear="none" /> <br clear="none" /> Next, ensure that everyone in your organization also has clear individual goals for clearly defined sales territories. The first basic test for these goals has to be that, if each of your people attain theirs, then you will have achieved yours. The second is that you have deployed your sales resources against the segments where there is good opportunity for your products and services, which may have changed dramatically in the new economy.<br clear="none" /> <br clear="none" /> The output of your plan should be your personal action and sales funnel-needed plan by quarter, as well as by month.<br clear="none" /> <br clear="none" /> We also need a way of ensuring each member of the sales team have enough of the right sales opportunities to be able to make their dollar goals. Most will not have enough because of the reasons previously stated&#x2014;i.e., existing budgets being cut, and existing orders and contracts being reduced or cancelled.<br clear="none" /> <br clear="none" /> This analysis should be reflected in their plans, where each person should be able to estimate how much new business they will need, and based on their average win ratio, how much raw unqualified opportunity they will need find via prospecting.<br clear="none" /> <br clear="none" /> <b>Editor's Note:</b> Be on the lookout for Part 2 of "Managing Sales in Tough Times" in May.<br clear="none" /> <br clear="none" /> <i>Peter Michie is the founder of PERFORMAX. Contact him at 561-202-8163.</i>