Thursday, 9 July 2009

Grow your business through Sales Leadership Part 2

Sales Leadership is about leading 4 key areas:
Part 1: Targets Management, Part 2: Leading Sales teams to achieve Profit Margins, Flexible Multiple Goals and Part 3: The Jewel in your crown that is your Customer.

In identifying what Sales Leadership is at the beginning, some might believe that's it - the end; but they'd be mistaken. Knowing what to say is nowhere near the same as knowing how, when and why you're doing it.

Part 2
Profit for Sanity
Do you recall the old fashioned saying, “Revenue for Vanity, Profit for Sanity” - it's worth remembering if you don't as businesses can go bust with large revenue, I've not heard any do the same with large profits.

In my mind and from experience, if profit margins on a product is not at least 3% above standard banking interest rates it's not worth the sale. The reasoning is quite simply the working capital used to process the product or service would have gained an equal return if left in the bank; therefore activities in the business would have been best spent else where. That is not to say I don't recognise there are situations where getting some money back is better than none, as at times its more costly to have a product line or service down than selling low; however each of these exceptions are results of poor sales & strategy.

Flexible Multiple Goals
Many businesses go to great lengths developing their budgets each year, which are segmented into 12 financial performances. The problem is little or no thought is given about what steps are needed to make the performance a reality. In budgeting for growth reviews in departments, processes and practices is a critical aspect as the requirements and expectations for a £1m business are completely different to a £9m business. To account for this I personally use a 100 day plan and multiple targets (I've got a Sales & Strategic Growth blog coming out shortly, in it I explain the 100 day plans). The principle of having multiple targets is to measure and reward performance not only on finances but projects I've tasked (personal objectives), performance targets (KPI's) and goals (the budget and financial aspect). From experience I've found sales teams respond better to these principles of sales leadership as it keeps them focused on each performance area. If for what ever reason individuals miss out or results are going to fall short in an area, such as budget error, budget adjustment and/or other general circumstances they don't get demotivated because they can still achieve something and get rewarded (the flexible part). Obviously if all areas are failing with a team member then that needs to be addressed.

The business success from sales leadership is simply the consistency in results it delivers apposed to what many businesses experience - see-saw sales results or yo-yo sales performance due to motivation or circumstance issues.

I'll have Part 3 available tomorrow but in the mean time I'd be very interested to hear your thoughts: was it thought provoking? is it what you expected? possibly I could help with a query, or a sales come sales teams issue you're facing or involved in?

If you want to get more on related blogs view “Increasing cashflow through your Sales Force”
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1 comment:

  1. Tim - quite intrigued, enjoyed all 3 blogs. Nice to read some straight talking on these topics. Steve Lewis- regional director Zurich