Will 2016 be any better?
Dear Ken Keller,
We’ve started to do planning for next year. In reviewing our numbers we see that overall, sales are up, but almost all of the growth is a result of a price increase we passed on to our clients as raw material costs went up. Our alternative was to eat the higher costs and have reduced margins. In my mind, we have some serious problems to deal with and while I have my own thoughts I’d appreciate you sharing yours based on what I have shared with you. – Don S.
There are more than a few variables to consider as you analyze the lack of revenue growth this year.
As the owner are you just noticing the issue now at year end or did you see it coming and take corrective action when things weren’t developing as you wanted them to?
If you took steps to remedy the problem, how well did the corrective actions work?
Was there a revenue growth plan in place? If you had one, did you track it through the year?
Who was the owner of the plan? Which individual was responsible for implementation and for the results?
What were the goals? Were they measurable and realistic? Was it an annual goal, or one by quarter, month, and week?
These are questions to consider as you perform a post-mortem and create a plan that will yield the results you want next year.
Let me suggest some other considerations for you to bring into your thinking.
The first is that the length of the sales cycle has to be taken into account. Far too many companies think that sales will increase in January because the new budget says it will. But if the your sales cycle is 90 days, the jump in revenue won’t take place until April at the earliest unless your sales people have been out hustling in the last quarter of this year.
Second, there has to be some method of systematically tracking the flow of leads and prospects through the sales funnel. The key metric is what is happening at the top of the funnel; these are leading indicators.
As an example, you may set as an objective for your sales people to each call on ten new prospects a week. Assume that only one prospect does business with you starting in 90 days from the date of the first call.
The minute your sales people don’t make the required ten new business development calls, for whatever reason, you will miss your revenue objective starting in April. And the trend will worsen as the year goes on.
Third, you need to assess each of your sales people to find out where they need help to improve their numbers. Sales people are usually proud, competitive and don’t like to open up about their weaknesses.
The smart sales people, the best sales people, are always looking to improve, to sharpen their selling edge, to learn something that will help make them more money.
Your mission is to assist your sales people and provide them the tools and education they need to become constantly and consistently better.
As a starting point, you need to find out what your sales people need from you to start make the required number of new prospect calls. Is poor time management the issue? Is it the lack of lead generation? Are sales people supposed to generate their own leads? Are people tied to doing other, less important work that prevents them from being in front of prospects?
It’s easy to point fingers at those in sales for not hitting the numbers. It’s far better to see those in sales as the front line warriors that they are and giving them the sales tools they need to do the job you expect of them. That’s your responsibility.