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Sales are a funny thing

Good planning, not sales mojo, is the key to sales success

by Joan Adams

We treat everything else in business like science. We track, measure, search for inefficiencies, train and improve. But with sales, we get all superstitious and weird. We treat sales like it's magic. We attribute all things sales to the mystical powers of the sales guys – whom we all worship of course – right up until some of the sales mojo wears off.

In short, we tend to behave irrationally about sales guys and sales in general. We don't ever try to discipline or rationalize the beast, as we're afraid of angering the almighty sales gods and jinxing the company's future well being.

Of course all of this is nonsense. To be sure, some salespeople are better than others but no one has the magic black book or such a winning personality that people just can't help but buy heaps of stuff from him / her. Sales, like anything else, can be improved with training, focus, discipline and, most importantly, with measures. And a properly structured reward system can be very persuasive for getting people's attention.

Yes, the sales guys are going to hate this article (and me) but once they see their overall sales numbers improve, and improve steadily, they will get over it.

Let's start by asking yourself the following questions: What are your sales guys doing all day long? Do you know where they are? Who they are talking to? What industries, geographies do they target? How often do they visit existing clients? Where do they look for new clients? How successful are they in all of these pursuits?

In order to bring some structure and discipline to the sales process, you need a sales plan. Each salesperson needs an individual plan. The company sales plan should point toward a desired outcome. To be effective, plans need to have specific actions that must be achieved in order to reach the overall sales goal. An action item must have a clear and measurable end result. This is the only way you will ever know how well the plan is working.

Why you need an action plan
You would never just jump in the car and start to aimlessly drive around. If your objective was to drive from New York City to San Francisco, you would start with a little planning. You'd decide when to leave, which route to take, when and where to stop, what to bring, what you want to see, when you want to arrive. You might have the goal of reaching California in 10 days, so your plan would include the minimum number of miles you would need to drive each day in order to arrive on schedule.

In this sense, sales are no different from a car trip. The more clearly the sales folks write their plan – their road map – and describe what actions they will take in order to reach the company goals, the better focused they will be. Plus, you will know what they are doing and why. More importantly, those actions can be measured. If certain actions don't produce the desired results, then you know the plan was not so good, and it is time for a little course correction.

Wishes are not goals
Let's talk about goals for a moment. Goals must be real, achievable, specific and measurable.

"We want to increase sales" is not a goal. It's a wish. It is vague and squishy.

"We want to increase our sales by 10% over last year" is better.

"We want to increase our sales in industry X by 15% and our sales in geography Y by 10% over last year's sales" is much better.

Now you can develop action items. They can be as simple as:

"I will call on # potential new accounts in industry X each month – the goal is to land six new clients in a year – with sales of $ or greater."

This would mean that, on average, the salesperson should add one client every two months. If by month six there are no new clients, it is time to rethink the plan.

"Increase sales to existing clients by 15% over last year. I will call on Y existing accounts each month. The goal is to sell more product / service to them." This too can be measured. After a few months, you will be able to see if this salesperson is successfully getting increased sales from existing clients.

Measures shouldn't be used to punish underperforming salespeople. Instead, measures will help you (and them) figure out what part of the plan is working and what is not.

Say a salesperson visits an existing client once a week for three months and never generates a dime of sales. It is clear they are devoting far too much time on this client.
Creating the right goals and incentive programs to encourage sales to reach those goals can be very tricky. Too many sales incentives programs ask only for increased sales –
resulting in generating revenue – but not necessarily profit. And worse, because companies don't measure, they aren't even aware that some customers actually cost money instead of bolstering the bottom line.

When you reward increased revenue without considering profitability, sales could "sell" you right out of business. Ask (and reward) your salespeople for bringing in more new customers and that's exactly what they will do, even if the customers are not a real fit for your business, are geographically scattered and purchase small amounts. Devise plans and goals that reward improved margins and your company will thrive.

A company with a clear sales plan is much more likely to achieve its goals. Set a goal for growth, then ask and reward your salespeople for bringing in the right kind of customer, who buys lots of high-margin products, regularly.

Joan S. Adams has consulted for industrial clients for more than 20 years. She operates Pierian, a consultancy that brings sustained and measurable success through operational excellence, customer focus and competitive market strategy. She has engineering degrees from the UW-Madison and MIT. E-mail her at adams@pierian.net.

This article originally appeared in the May/June 2011 issue of Industrial Supply magazine. Copyright 2011, Direct Business Media.

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