Finding opportunities in sales areas
Sales is not a difficult area to find opportunity but it’s a difficult area to capture it. Many sales executives are in their position because they were very good sales people, but the attributes that make somebody a good sales person do not always correlate well with some of the attributes you want in a good manager. Sales people tend to be outgoing, confident and expressive but they also tend to lack administrative discipline. Some of the more mundane, analytical aspects of selling that don’t always get the attention they deserve (e.g. account planning, time management, sales funnel analysis, follow up) are critical for success over time and they help an organization get through bad as well as good market cycles. This is perhaps particularly true with complex longer sales cycles where a predictable stream is created by managing the early stages of the sales funnel.
Notwithstanding the practical problems of trying to manage change in sales areas, the main focus for performance improvement is to improve sales effectiveness and efficiency. In essence, can you sell more higher margin things at a lower total cost? In financial terms the objective is to maximize the contribution margin sales generates at the lowest total selling cost. Below is a checklist of questions to help probe for opportunity in a sales department:
Improve selling effectiveness
- Can contribution be increased?
- Can prices be raised?
- Can discounting be reduced?
- Can the product/service offering be simplified?
- Are sales calls appropriately targeted, and call time appropriately distributed by the quality of the prospect?
- Are sales people actually promoting and selling the right products / services?
- Can the sales cycle be reduced?
- Are sales people moving sales along at the right rate?
- Can the product/service offering be improved in ways that matter to customers?
Improve selling efficiency
- Can you improve sales utilization?
- Can you increase time actively selling?
- Can you reduce travel time?
- Can you reduce admin time?
- Can you reduce time spent on service issues?
- Could you re-align and reduce the number of territories?
- Can you reduce support costs?
- How are support requirements determined?
- Have support costs grown disproportionately over time?
- Can some support tasks be simplified or eliminated?