What makes a business a powerhouse in sales? Absolutely essential are attractive products offered at a reasonable price to customers who need those products.
Sounds simple? It’s not… but let’s assume you’ve got this right. We also need the underlying sales processes to work because even with great, in-demand products, sales will not reach potential with weak sales processes.
Existing customers are generally a good source of new revenue.
Example: A restaurant offers cooking classes. Many diners at the restaurant are interested in learning how to cook. Providing information on the cooking classes when handing over the bill has generated a lot of business.
Example: A pet store offers a dog wash service. Animal lovers visiting the dog wash often buy other pet grooming products which are promoted during their visits.
Develop processes so your team habitually asks your customers whether they need additional products. This can be done in a subtle and sensitive way so as to preserve your important customer relationships.
Your target customers are those customers you REALLY want to sell to. Perhaps they have more cash to spend, will become loyal purchasers over many years or be a good source of referrals.
Example: A bank opens accounts for new clients each day. The age of the new client is important. Banks want to form long-term relations with customers so a younger customer may be more attractive because of all the future business opportunities (home loans, business loans, estate planning, etc.)
Your processes should alert your team to these opportunities so they can act on them; maybe not immediately, but when the time is right. Clarity on your target customer is critical in sales.
This sounds obvious… but many businesses do not discuss sales opportunities frequently enough or there is insufficient discipline in sales meetings.
Example: A mid-size law firm has a weekly meeting of partners where new opportunities are shared and the top priority opportunities are discussed. Partners responsible for each opportunity declare what they will do next to close the business and report on progress at the next meeting. This creates accountability.
Discipline is important in sales as is celebrating the successes! Frequent interaction enables this and hones sales effectiveness.
Your business may have the luxury of a large sales team. That’s great… but the rest of the team may conclude they have no role in sales.
It’s better to create a culture where everyone recognises they can (and should) contribute to sales.
Example: The bellhops in a large luxury hotel chain are encouraged to interact with guests. They are trained to identify “triggers” which suggest a guest will spend money on other service offerings: banqueting, the spa, catering, weddings and so on. The bellhops are rewarded if they provide leads to their sales team.
How do we know we are succeeding in sales? This depends on having clear goals on revenue, the number of sales opportunities, the number of transactions and so on. Perhaps the revenue will come from existing clients or new clients? Which products will drive the revenue growth? What time frames apply in our sales goals? Clarity is critical.
Then we track our progress towards these goals and celebrate the successes. If we are not achieving the goals, we revise our approach.
Example: A bakery established just two years ago has enjoyed significant growth with its healthy range of baked goods. The expectation was to grow at 25% in 2020. But then COVID hit… sales targets were not being met and, when it became clear that things would not improve soon, management decided to offer a home delivery service. New targets were set and new processes were put in place.
At any point in time, the business should know exactly how it’s performing relative to targets.
The truth is that many sales efforts will end up in failure. Depending on your business, you may need to speak to ten prospects before you close one deal. But those ‘unsuccessful’ sales are not failures if you don’t waste too much time on them. They are learning opportunities and a way to create new relationships.
Example: A provider of civil engineering services sells to construction companies and deals can take up to a year to close. A senior manager is charged with evaluating WHEN deals are likely to close. In this way, she guides the team to stay focused on the opportunities with the best chances of closing soon.
Generating proposals, invoices and contracts can be time-consuming and slow down sales momentum. Some sales are lost because of delays due to sales administration. This can be avoided by using templates, automation tools and training.
Example: A seller of automotive insurance built templates and uses software to finalise sales contracts and secure payment in a few simple steps. This saves time chasing customers and takes the guesswork out of the equation. Sales conversion rates have greatly improved because of these administrative processes.
As accountants, we have access to a whole lot of data related to sales. Your sales effectiveness can be partly explained by numbers such as leads generated, marketing costs, costs per lead, sales conversion rates, revenue per customer, revenue retention rates, customer segmentation and so on. Proper analysis of this data can provide guidance to business owners on how to optimise their sales function.
Do you need a deeper understanding of your sales performance? If so, please get in touch!