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Seven
Early Warning Signals of
Ineffective
Sales
Stop losing business by taking heed to these
signals
No one is perfect, and no
business is either. So it stands to reason that
individual components of a business may not be
perfect either. Specifically, this could mean your
sales department and sales processes could use
some tuning as well. Consider these seven early
warning signals and see if you can make some
improvements in some areas of your business.
1. Can’t duplicate the model of successful
sales people. This is typically a sign of not
having an established sales process. A sales
process describes the flow in which a customer
goes through your sales cycle; such as what
happens next and who hands off what to whom. It
also includes selling skills and what is needed to
perform each step in the process in the most
effective way; from cold calling to closing. Early
warning signals that you might be deficient in
this area include:
• Some sales reps are very successful while others
are struggling, yet they are selling the same
products or services to the same type customers
• Sales reps are calling on non-decision makers
• You are spending time writing proposals for
RFP’s from prospects that haven’t been properly
qualified
• Forecasts are inaccurate and incomplete
• Quotas are your only sales plan (i.e., no
territory or account management strategies are in
place for each sales rep)
• Sales reps are confused as to what to do next to
close a sale
To correct this problem, develop a sales process
that reflects the best practices of your sales
team. Provide sales training to help your sales
reps improve upon their weaknesses. Train your
people, and provide continual reinforcement, on
the sales process and how it works. Make sure all
departments in your company understand the process
and potentially are part of it.
2. No Lead Flow. When marketing spends time
and money acquiring new leads and your sales
people don’t find those leads to be useful, you
have a severe problem. Conversely, when your sales
people close sales but your Marketing department
doesn’t know what kind of leads were closed nor
where they came from, then that is equally a
problem. The first thing you need to do is
understand who your customers are, why they buy
from you, what they buy, when they buy, and other
purchase-related information. You should also
understand things about their business (location,
size, revenue, SIC code, etc.) or about them as
individuals (age, sex, interests, etc.). With this
information, Marketing can then target similar
businesses or individuals with their campaigns.
These leads will, by definition, be qualified
since they will match the profile of others who
already purchased from you. Your next step is to
track these leads. Know where they came from and
find out if they ended up purchasing from you or
not, and why. When you create a lead flow system,
you not only track how the lead went from
Marketing to Sales, but the disposition of that
lead and how it flows back from Sales to
Marketing. If it was successful (a sales was
made), then Marketing knows to find more of those
types of leads and to look for them from the same,
or similar, source.
3. No cost justification or ROI from marketing
programs. This is an extension of #2 above. If
Marketing is asking for more money for a new
campaign or to repeat an existing campaign, but
are not able to tell you how much revenue was
generated from the previous campaigns, then this
is an early warning signal. Simply telling you how
many leads were generated is virtually useless.
Spending money on campaigns that are not
researched properly or sent to prospects who don’t
match your existing customer profiles can be an
enormous waste of time and money. Marketing needs
to track the lead flow to make sure they are
acquiring qualified and quality leads. As a
result, they will be able to measure the success
of their campaigns and determine if there was a
positive return-on-investment.
4. Lost customer data due to employee turnover.
If one of your sales people leaves your company
and takes his customer data with him, this is
another early warning signal of ineffective sales.
Two major effects of this are; one, you lose track
of what’s been happening with prospects and
customers and following up is impossible thus
endangering your customer relationships, and two,
the new replacement sales rep has to start from
scratch finding out what’s already been done,
what’s been promised, and what has to happen next,
resulting in lost productivity and sales. There
are two ways employees can take customer
information with them when they leave. One is if
that information is in their head. In other words,
you don’t have a centralized CRM (Customer
Relationship Management) system for everyone to
enter their client information and update it with
recent activities and status. If you don’t, shame
on you, since you are allowing your sales people
to virtually own this valuable data and not share
it with others. As a result, when they leave your
employ, they take this data with them. The other
way for them to take this information when they
leave is to actually steal it. I call this the
five o’clock CD. One day at five o’clock, they
copy all your customer data from your CRM system
onto a CD, slip it in their pocket or purse, walk
into your office and say, “I quit.” You promptly
escort them out the door thinking you protected
your valuable information, but it’s already too
late. The remedy for this is to limit what your
users can and cannot do in your CRM system. At a
minimum, preventing them from copying or exporting
any data is crucial to protecting your valuable
customer information.
5. Over or Under product manufacturing due to
inaccurate forecasts. Forecasting is hard
enough, but when it is inaccurate or incomplete,
then your problems worsen and this becomes another
early warning signal. The result of inaccurate
forecasts can be that you predict the wrong amount
of upcoming business and thus produce too many or
too few products to accommodate a false demand.
When you have a sales process that clearly defines
each step in the sales cycle, and when you have
properly trained sales reps who have the selling
skills to effectively move a prospect through your
sales process, then the forecasting process
becomes much more reliable. Sometimes a sales
person will rate the probability of a sale as
being very high because he had a very positive
meeting with the prospect. In reality, however,
this account may not even be qualified. This type
of forecast is an emotional one since the rep
based it on how he “felt” the deal was going
instead of it being based on some analytical
metrics, such as what step was accomplished. For
instance, if the sales rep performed a product
demo and that is defined as step three in your
sales process, and step three is defined as having
a 60% probability of closing, then this
opportunity has a 60% probability of closing, by
definition. By creating a sales process such as
this, you have removed any emotional feelings the
rep may have had about the deal and enforced an
accurate measurement system based on actions and
activities. This method will yield a much more
accurate forecasting system for you and your
business.
6. Poor customer service. If you lose
customers for no apparent reason, or you have to
handle an unnecessarily high amount of customer
complaints, then this is an early warning signal
that needs to be addressed. What often happens is
that since there is a lack of cohesive information
about the customer within your organization, the
client is given inconsistent information, or
people assume someone else took care of something
that they should have, or there is no follow up.
Your goal should be to have on-going contacts with
your existing customers that are positive, not
negative. These contacts can be through phone
calls, emails, newsletters, in-person, or
whatever. And, they should be prompted by your
actions, not as a result of a customer complaint.
By staying in touch with your existing customers,
you will proactively reduce the number of
problems. By using a CRM system that keeps track
of everyone’s contacts with a customer, you will
reduce confusion, embarrassment, and poor customer
service. Obviously, you’ll also need a corporate
culture that views excellent customer service as a
high priority and an objective for your
organization.
7. Unproductive sales people. If your sales
people aren’t spending the majority of their time
on selling activities, then you are suffering from
another early warning signal of ineffective sales.
Unfortunately, too many businesses throw up
barriers for their sales people by making them do
more than they should be doing. For instance,
detailed status or activity reports can be a huge
waste of time for sales people. By scheduling
their activities in a CRM system that is shared
with everyone on a network, you can generate an
activity report without wasting precious selling
time. Having sales people chase down orders or
shipping problems or do contract negotiations can
also be time stealers that take away from selling
time. Provide sales people with resources for them
to delegate these non-selling tasks to. Territory
management is another area that can waste time. If
their territory is too large to efficiently
manage, consider dividing it up amongst several
sales reps. If a sales rep is traveling all the
time to visit accounts, perhaps he isn’t managing
his travel plans properly. Make sure he is
organizing his visits by geography so he isn’t
driving to one side of town in the morning and
then to the other side of town in the afternoon.
Instead, schedule several calls in the same area
of town in the same day. Also, by using technology
many in-person sales visits can be easily replaced
by using web-based meeting services such as WebEx,
Microsoft Live Meeting, GoToMeeting, and other
services which are a lot more affordable than
travel expenses. Look at where your sales people
spend their time in the course of any given week.
Then find ways to off-load some of their work and
make them more efficient. You could even consider
training them on effective time management skills.
If you suffer from any of these early warning
signals, I hope this information will get you on
the road to improving them. Sales effectiveness is
a priority that every company needs to address.
Hopefully, yours already does.
Good
luck and good selling!
Russ
Lombardo
PEAK
Sales Consulting
russ@peaksalesconsulting.com
(702)
655-5652
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