The Real Reason for Sales Stagnation
(Hint: It's not just the recession)
by Bill Blades
I'm about to reveal to you a well-kept secret, one that's as clear as day but often ignored as the dark of night. My experience of consulting for twenty-plus years has provided me the opportunity to reveal the number one reason for declining revenues during a recession – and it's not the government. Any corporation suffering loss of sales has already been stagnant for too long a time, and the hole was dug all the more deeper in tough times because most in the organization thought, acted and did just as they always had. Not smart.
If you're not already great in the following areas, let me share a few ideas you should immediately act upon in order to get out of that hole and into a realm which few are able to enjoy. I'd suggest you read with an open mind and believe that change is inevitable . . . except from a vending machine.
First, and perhaps most important, always remember there is a 180 degree difference in sales management versus sales leadership. While I've had trusted clients with billions in revenues, most have been in the range of $15 million to $250 million. Fewer than 2% of their sales managers had been beneficiaries of adequate training and education prior to being appointed to one of the most important jobs in the company. And most of these individuals had been "stuck" in the position for five to 15 years, admitting they were still pretty much clueless about their real role. Consequently, they performed mundane tasks such as "ride-alongs" with their salespeople. Even worse, they frequently rode with those they liked or considered buddies. After all, this made their job all the more enjoyable. However, keep in mind, this doesn't create an atmosphere where business will grow, much less tread water; only a feel-good activity which is artificial and unwarranted.
If you see a bit of yourself in the above scenario, I suggest you make some immediate changes and determine who you should invest your time with. Don't lose time by thinking you're going to make superstars out of run-of-the-mill salespeople. If you've already done your job, you've challenged them with new skills and ideas. Did you document and monitor their efforts and results? Slacking, on your part, makes you just as guilty as the salesperson; consequently you are negligent in your responsibility to your company's shareholders.
If you've repeatedly made suggestions to the individual and they didn't act, you're tolerating mediocrity and compensating a dedicated under-performer. Don't waste your time with these people; just remember the only thing worse than turnover is when there is none and there should be. It's like the church bulletin I read: "Ladies, don't forget the rummage sale. It's a chance to get rid of those things not worth keeping around the house. Bring your husbands."
How many times have you hired someone, then after the first month, had the inkling you made a mistake? Did you author a 60-day action plan with the individual or let him slide for months, then years? Most managers tolerate them. Leaders do not. Many sales managers believe their title is a noun. It isn't; rather it's a verb calling for targeted action by the sales hero. Always be thinking major time on major things. Major things for you are major salespeople and major clients (targeted accounts).
So, invest your own time wisely. Traveling with a person who is content being just okay means not one, but two of you, just wasted a day. Some create happiness wherever they go – others whenever they go. Message: Help them be happier somewhere else.
Target accounts are significantly-sized organizations that you 1) want to land, 2) want to gain a larger share of the business, and 3) never want to lose. These are accounts that almost always require your best salespeople. You don't send up a .220 hitter to face Cliff Lee when you've got the tying run on third and winning run on second; just as you shouldn't assign a target account to a mediocre salesperson. This is especially true when your competitor's salesperson, the stud with a .350 batting average, already has the business and is a major player.
My last corporate position was V.P. of sales and marketing, and I inherited a team of 21 substandard players. Two target accounts were based in Nashville and Houston, territories of two very weak salespeople. On my first visit to both target accounts, I had the salespeople pick me up at the airport and drive me to the clients' offices. I told the salespeople to go visit their regular customers and come back to pick me up in two hours. Why, you ask? A client's first impression is formed prior to the first word ever being spoken. Neither salesperson looked nor spoke like the image I'd personally projected by mail and telephone. In addition, neither one of them was going to learn much. With 40 years of social visits (versus professional sales calls) under their belts, I didn't want my company or myself to be lumped together with two short-timers. Within the first 10 minutes, I knew more about these clients than both former salespeople as well as the competition. Hence two potential clients were landed and accompanying revenues exceeded our entire corporate revenues. Two mediocre salespeople found happiness in another profession and a chief competitor was quickly eliminated. I assigned our excellent customer service supervisor and a terrific R & D technician to assist me as I became the salesperson. A target team for target accounts.
So, Now What?
Understand that so goes the sales manager, so goes the sales team, therefore the manager needs sales and management education first. Too often, they just don't know what they don't know yet. The American Society of Training and Development (ASTD) reports that 87% of all managers received no training and education prior to being appointed as a manager. Basically it's "there's your desk – go hit it."
CEO Magazine notes the percentage of corporate directors who rank CEO succession critical as 89.2%, yet the percentage who rate themselves as "highly effective" in this area is 15.7%. This is why I always prefer to start my consulting process with the CEO. They need someone who is "highly effective" with both mentoring and insight about specific areas to improve upon, and they need to hear the unbiased truth about their people.
Half of all sales managers took the position for self-centered reasons, such as power and money, and haven't a clue as to what they need to do. A much smaller number accepted the position because they believed they could make a difference in people's livelihoods and for the corporation, wanting help but not knowing where to turn. So when I'm called in to work with the sales department, in almost all cases the CEO can't tell me what the real challenges are. Are you beginning to see how the blind end up leading the lost?
So how does the sales manager get the help he needs? For starters, admit that help is needed. Quite often a CEO arranges to bring me in and the sales manager will view me as a threat, rather than a gift. I'm used to it, but it doesn't speak well for my first impression of the important person I'm about to mentor. Message: accept the gift so you can better improve and better serve your team and clients. Tell the CEO you need help. Everyone needs help. Only twice in my 25 years of consulting has a CEO said no. To be blunt, the sales managers were working for a CEO who was holding the corporation hostage from excelling.
What does the sales manager do if they don't get help? Message: Check your career options. Chances are your CEO is too cheap. Many CEOs love to espouse phrases such as, "People are our greatest asset," but don't invest their money where their mouth is. If the sales manager is not a "10," the smartest investment that could be made is one which elevates the individual to a "10." Message: Since sales manager is a verb, be smart and demand the help.
A $50 million wholesaler invested about $250,000 in me (nice client!) They had been stuck at $50 million for many years, but we hit $87 million 18 months later. Was I an investment or a cost? Multiply the $37 million gain x 10 years, and they realized an additional $370 million in revenues over 10 years for only $250, 000. Message: think investment – not cost.
Most important of all, check your ego at the door. After speaking for a multi-billion dollar firm, the V.P. of international sales pulled me aside and asked of my availability to consult. He noted how many attendees had taken notes throughout my seminar and then stuck around with requests for me to sign my books. Meanwhile, the V.P. of sales went up to another well-known celebrity who had done his "gig" just before me. He was the only one who approached the comedian while others wanted my signature and asked questions. He let his ego get in the way. Meanwhile, the marketing manager said, "He'll never hire you to consult now." I asked, "Why not?" to which she replied, "You're too good and he won't allow it." About a year later, I read that they reduced their workforce by 25%. Message: Choose a mentor who knows more about sales leadership than you do. It's hard. It's scary. But it's worth it.
In conclusion, are you the absolute best sales manager in your market? If not, be smart in designing your life and your plan of attack. Dolphins are known to be highly intelligent, proving it during their first days of captivity. They train people to stand on the edge of the pool and throw fish their way. Are you that good? Shouldn't you be?