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Increase Sales Revenue Growth by Avoiding These 5 Sales Mistakes March 1, 2012

Posted by dennissommer in Sales, Strategic Planning.
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Improving sales revenue growth should be a top priority in your company. Unfortunately, improving sales revenue growth is easier said than done.  It takes more than great leadership or top of the line products and services.  Avoiding these 5 sales mistakes in this article will help you achieve your sales revenue growth goals.

Integrating Your Sales Force by Paul DiModica

Every day, account managers are dealing with new emerging competitors, downsizing prospects, and enlarged sales quotas. Success requires special sales training methods and a company-wide process where all departments are responsible for company
revenue.

The key to success is premeditated, outbound business development.

In traditional firms (start-ups and Fortune 1000 firms included), vice presidents of sales live or die by the success of monthly revenue plans that were forecasted twelve months earlier. They are the hero or the goat depending on how the revenue numbers hit that month. This evaluation process is an immature method used to determine revenue success (or failure). Often used by nvestors, it ignores the fact that corporate revenue (or lack of it) can be a symptom of a greater problem with the firm’s business strategy.

To succeed today, firms need to focus on the integration of all of their revenue elements of business development. When one singular department fails to contribute, it directly affects all corporate sales opportunities. At that point, it is not the sales department’s failure to generate revenue, it is the company’s failure.

The four current business development elements are:

1. Sales
2. Marketing
3. Strategy and Product/Service Development
4. Financial Management

To succeed, we need all of these departments to be positioned equally in responsibility as partners in revenue generation. In this economy, there can be no silos.

That means senior managers of marketing, strategy, and finance need to be assigned a line position with the appropriate responsibilities and compensation.

The result is that sales, strategy and marketing all have a sales quota. Working in concert, being paid as a team, their decisions and responsibilities will be centered on helping account managers sell more.

If your firm has not aligned these elements with equal compensation based on total revenue, assigned milestones based on a group performance, or implemented weekly goals for each manager based on revenue producing expectations, then it is time to change.

Today, companies can no longer afford high-priced sales executives or support departments who don’t carry revenue goals. Instead, line managers are needed to represent all departments working in concert to generate revenue.

Remember, it is not the sales department’s responsibility for revenue; it is the company’s responsibility.

5 Common Mistakes in Sales

Mistake No. 1
Most salespeople shoot from the hip. Let’s be honest. Sales is a premeditated sport. To be successful, you need to prepare every step of sales cycle. Amateur salespeople wing it. When meeting clients for the first time, presenting to CEOs, or negotiating contracts, always sit down and plan your actions, talking points, and methodology in order to win business. Many salespeople become lazy and interact with customers based on the salesperson’s previous experience with a particular kind of client. Professional salespeople know that every client is different and in this competitive economy, preparation wins business.

Mistake No. 2
Salespeople do not cold call. No, it’s not the favorite playtime of salespeople, but if you wait for your marketing department or your inside sales force to find qualified leads, your competition may already be locking down a big deal in your territory and you will be too late to join the game. To increase your quota success, add cold calling to your schedule every day.

Mistake No. 3
Salespeople underestimate the importance of the client presentation. Fifty percent of all sales are won through the presentation. It is the only time when most of the decision makers are in the room and can be educated as a team about the unique characteristics of your product or service. To increase closing ratios, focus on the content and process of your presentation. Prepare to present.

Mistake No. 4
Salespeople do not stay in touch with their prospects. Selling is also a contact sport. You need to interact with your prospect on a timely basis. You should touch the client every week with some communication device (email, letter, brochure) prodding them to move their buy cycle closer to your sales cycle. Prospects have short memories. Don’t let a more ambitious competitor steal your prospect because they are more visible in their communication.

Mistake No. 5
Salespeople underestimate the competition. In sales, it is kill or be killed. When selling a client, always assume that there is competition until you see a signed contract or purchase order. Several years ago, a study revealed that Fortune 1000 companies were negotiating with an average of four companies on the last step of a purchase. Simultaneously, only half of the time did the buying companies tell the vendors how many players had made the short list. Never assume you got the deal, until it is signed.

Avoid these 5 sales mistakes to increase your sales revenue growth.

Until next time  . . .

Think Big and Take Action !

Dennis Sommer

Dennis Sommer is the CEO of Executive Business Advisers . Dennis is a highly sought after business growth expert with over 25 years experience.  His specialty is helping companies quickly improve business performance and sales revenue growth.

If improving business performance and sales revenue growth is a priority of yours this year, contact us today to see how Executive Business Advisers can help.  Call 330-676-1876 or email us at sales@ebaac.com

Copyright © 2012 Dennis Sommer All rights reserved.

Sales Scorecard a Strategy to Increase Sales Revenue Growth March 1, 2012

Posted by dennissommer in Sales, Strategic Planning.
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Improving sales revenue growth in today’s business climate is critical to your success. Implementing a sales scorecard strategy is a proven tactic used by top performers to improve sales revenue growth.  This simple strategy described in this article will help you achieve your sales revenue growth goals, increase profits and improve your business performance.

Understanding the Sales Scorecard Concept by Paul Dimodica.

In a world where increased revenue has become an executive mantra, turning business plan strategy into actionable steps that create revenue has become, for some, an albatross.

The key to success is to continually increase internal funding capabilities and help reduce dependence on third-party funding resources. For companies to continually grow, business units must quickly produce tangible sales results. One methodology to accomplish this is through a Sales Scorecard

Like other scorecard concepts, the success of the Sales Scorecard is driving fundamental business changes. By creating identifiable tactical measures for each of your sales team members and contributing departments, you can transform silo performance into group performance and create a pattern for integrated sales team performance.

Sales Scorecards are sub-segments of the original scorecard concept currently used by approximately 60% of Fortune 1000 companies. The original premise of the scorecard is based on linking, intersecting, and managing four distinct business  perspectives. The scorecard process is presently used as a centralized business implementation and strategy tool. The success  behind the scorecard methodology is based on its ability to transcend executive philosophies and help departments become more productive as a team from the boardroom to the mailroom.

Unlike other management philosophies, the sales scorecard is not a static business concept. Instead, it is a continuously changing management tool that allows companies to adapt to market conditions as they develop. Unlike Management By Objective (MBO) theorems where corporations are focused on changing behavior by studying yesterday’s performance to bring about modification for today, the scorecard model focuses on today and tomorrow and those elements that can turn present strategy into future action.

Through the utilization of the Sales Scorecard, businesses can manage sales team’s performance based on today’s information and
react to tomorrow’s market changes and sales success needs.

The scorecard is not just a static list of metrics or isolated Key Performance Indicators (KPIs). Instead, it is a graphical framework for implementing and aligning sales tactics and managing strategy for companies seeking to become successful.

Businesses must manage their capital capabilities to succeed.

Today, most companies can break down their corporate assets into three specific areas, which include:

1. Human capital (employees)

2. Operational capital (product and service development and delivery)

3. Financial capital (business funding, revenue, monthly burn rate, valuation, corporate revenue, A/R, line of credit)

With these capital elements always at risk for companies, it becomes crucial for management to develop a strategic blueprint for all employees to work together. The Sales Scorecard is such a program, but it integrates five areas rather than four. Through its implementation, line and staff associates interact weekly as a packaged team to help drive performance and create revenue as a group instead of traditional department silos.

Five sales management pillars to track are:

1. Sales

2. Marketing

3. Strategy

4. Product Development/Operations

5. Strategic Partners/Alliances

It is important to understand that revenue generation in companies is a cause-and-effect process. Revenue will be short without a market-driven product, services to sell, or appropriate positioning support. Success will be minimized if the focus is placed on the sales department as the primary driver for revenue shortfall rather than identifying and fixing the primary problem. The Sales Scorecard is a visual measurement device used to view the integrated variables of revenue generation from all salespeople.

Additionally, by identifying all sales tactics needed to sell and/or non-contributions as they happen, you can make adjustments to your sales team’s current behavior before it is too late and identify help from other departments that may be needed.

Until next time  . . .

Think Big and Take Action !

Dennis Sommer

Dennis Sommer is the CEO of Executive Business Advisers . Dennis is a highly sought after business growth expert with over 25 years experience.  His specialty is helping companies quickly improve business performance and sales revenue growth.

If improving business performance and sales revenue growth is a priority of yours this year, contact us today to see how Executive Business Advisers can help.  Call 330-676-1876 or email us at sales@ebaac.com

Copyright © 2012 Dennis Sommer All rights reserved.

How to Analyze Lost Sales to Increase Sales Revenue Growth March 1, 2012

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Improving sales revenue growth in today’s business climate is not always easy. However, analyzing lost sales is a simple and proven tactic used by top performers to improve sales revenue growth.  This simple strategy described in this article will help you achieve your sales revenue growth goals.

Lost Sales Analysis For Greater Sales Management Success
by Paul DiModica

One of the best sales tools available to CEO’s, VP’s of Sales and sales managers when evaluating salespeople and sales performance is the use of a lost sales analysis metrics program. The lost sales analysis is more effective than percent of quota attainment as a measurement tool, because it measures not just the sales success of an account manager against some predetermined sales quota, but it also measures their success against competitors based on lost sales.

By calculating the total dollar value of lost deals and measuring that against the value of business opportunity inside the geography region, you can more accurately evaluate a salesperson’s performance.

When a sale is lost, it also means that the potential client’s recurring revenue stream is lost for three to five years (i.e., service contracts, training contracts, maintenance, repairs).

So, if a salesperson loses a deal in their territory, it is not just the immediate revenue that is lost, but generally all of the recurring revenue as well.

To focus on sales sold as a percentage of quota as the only measurement of success underestimates the firm’s potential revenue within a territory and overstates a salesperson’s success.

From an integrated business development approach, we do not want to focus only on individual sales successes, but instead look at revenue from a territory potential as a measurement for individuals and companies.

What has occurred is that executives have arbitrarily set up standards of measurement for salespeople that are based on elements that have nothing to do with sales potential.

Lost Sales Analysis Calculation

Here is how the model works:

  1. Determine the potential dollar size for one year of sales within the market segment or geography in which your salespeople are assigned.
  2. When this number is calculated in dollars, divide it by the actual sales quota in dollars to determine the territory efficiencies as a percentage.
  3. Then take the total percentage of the person’s closing ratio for proposals submitted and add it to your territory
    effectiveness percentage.

Example:

Let’s say our territory potential for the first year is $10,000,000 and a rep’s quota for the first year is $1,500,000. By dividing his quota by his territory potential, you will see that his market effectiveness is 15%.

$1,500,000 divided by $10,000,000 = 15% market effectiveness

Next, let’s say our rep has a closing ratio of 25% from proposals submitted. If the rep hits his quota of $1,500,000, that means he has submitted $6,000,000 in proposals and has generated $1,500,000 in sales, leaving 40% of the market available.

25% + 15% = 40% territory effectiveness

So, is the rep that hits 100% of his quota successful?

By this equation, they are only 40% effective and in fact they may have sold $1,500,000 but they LOST $8,500,000 that year in their territory.

If the lost clients had a cumulative effect of recurring lifetime value of 35% per year through additional sales, support, add-ons and upgrades, then that 100% of quota salesperson has actually cost your firm $20,000,000 or more in lost revenue over three years.

Yet, under most sales quota systems, the rep would be deemed successful and the senior management would just try to improve their sales closing ratio as the only mechanism to increase corporate revenue.

This method of back door analysis helps management understand the relationships between sales, quota, salesmanship, territories, and lost sales opportunities. It allows executives to adjust compensation to better reflect those reps that
are “territory” productive and those reps who are “quota” productive.

Generally, shooting for a territory effectiveness of 60% or better is an optimal goal to seek. This way, sales reps must increase their closing ratio and their territory penetration simultaneously to meet their corporate sales goals.

The key to successful sales forecasting is understanding where the sales numbers are, where they need to be, and where they came from.

Until next time  . . .

Think Big and Take Action !

Dennis Sommer

Dennis Sommer is the CEO of Executive Business Advisers . Dennis is a highly sought after business growth expert with over 25 years experience.  His specialty is helping companies quickly improve business performance and sales revenue growth.

If improving business performance and sales revenue growth is a priority of yours this year, contact us today to see how Executive Business Advisers can help.  Call 330-676-1876 or email us at sales@ebaac.com

Copyright © 2012 Dennis Sommer All rights reserved.

Do You Walk Away from New Business and Sales Revenue ? May 27, 2011

Posted by dennissommer in Sales, Strategic Planning.
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Should you walk away from new business and sales revenue in this economy? Absolutely! If you have not walked away from new business a handful of times over the last 12 months, you may have internal issues limiting your sales revenue growth and profitability.

When times are tough, it’s very easy to say yes to all new business so you can achieve sales revenue numbers. However, not all business is good business.

We have found in our research that many sales teams (including the sales VP) will knowingly close sales at all costs to meet their sales quota, even when there is a known negative financial impact to the company.

Even when sales quotas were met, the negative financial impact to the organization ranged from lower margins and profits, higher cost of sales and operations, and uncontrollable staffing issues.

The most common reasons why they take on bad business (at a loss) were:

1.  To reach their individual or team sales goal.

2.  To sign up a new client or customer.

3.  To get in the door, with a promise of future sales.

In reality, when you monitor these situations over the long term relationship, the only winner is the customer.  They receive a high value product or service at a very low price.

These deals have a negative financial impact on your business, a negative impact on your reputation and makes it very difficult for you to get the same customer to pay top dollar for your product or service in the future.

Walking away from business is a simple and proven tactic used by top performers to improve sales revenue growth and profitability.

You should walk away from new business when:

* The sale does not meet your documented minimum profit and margin expectations.

* The customer demands concessions that are not reasonable.

* You need to discount your product or service more than 10%.

* You are required to complete an RFP from a new prospect you have not met before.

* The staff hourly costs required to complete the sale exceed your maximum expectations.

* You are asked to provide free services or products before the sale is done.

The above list contains a few reason to think about when deciding to walk away from business.  As the CEO or executive team member, you need to make sure you have policies in place for your sales team to help them be successful, while at the same time help you grow your sales revenue and profitability.

Remember, not all business is good business.

Until next time  . . .

Think Big and Take Action !

Dennis Sommer

Dennis Sommer is the CEO of Executive Business Advisers . Dennis is a highly sought after business growth expert with over 25 years experience.  His specialty is helping companies quickly improve business performance and sales revenue growth.

If improving business performance and sales revenue growth is a priority of yours this year, contact us today to see how Executive Business Advisers can help.  Call 330-676-1876 or email us at sales@ebaac.com

Copyright © 2012 Dennis Sommer All rights reserved.

8 Strategies to Increase Sales Revenue Growth August 23, 2010

Posted by dennissommer in Sales, Strategic Planning.
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Increasing sales revenue growth in today’s challenging economy is not easy.  These 8 sales growth strategies are simple and proven tactics used by sales top performers to improve their business performance.

These simple sales growth strategies have been proven to help companies improve sales revenue growth in as little as 30 days.

1. Bigger revenue comes from bigger offerings. Offer super sizes, volume discounts, extended contracts, offering bundles, etc.

2. Try small “Early Buy” incentives to increase volume, but keep them small with a time limit. You want to attract customers quickly without diluting the offering pricing structure.

3. Stand strong on the value your offering provides and stick with the original price. Do not discount pricing on your offerings if they truly provide the value described.

4. Increase sales revenues by providing three options or price points. Customers are more likely not to choice the lowest price. Use a set of three options to move customers from the lowest to the middle price range. Make sure each range is well defined and the differences stand out.

5. Successful selling to an “Dynamic, Entrepreneurial” company. The buyer in this organization is inclined to make independent decisions. Focus on building trust with the customer, your offering, and your company. Make the information and process simple and straightforward.

6. Successful selling to a “Long Term Visionary” company. Concentrate on the technical features and benefits of your offering. Leverage team selling by matching up your management and technical experts with theirs. Focus on the complete solution that matches or exceeds their long term business needs.

7. Successful selling to a “Bureaucratic” company. Decisions are usually based on past preferences, policies, and regulations. These are the toughest organizations to get your foot in the door. Make them aware of your offerings, be competitive on pricing, and stay in touch by providing customer success stories. These companies love to follow others.

8. After a customer has made a purchase, offer a special deal on the higher grade model.

As you can see, these are simple and straight forward strategies to increase your sale revenue growth.  One or more of these strategies should be a part of every companies sales growth strategy.

To really benefit from these sales growth strategies, you must also differentiate yourself from your competition.  If you can successfully do both quickly, you will become a top performer in your industry.

Until next time  . . .

Think Big and Take Action !

Dennis Sommer

Dennis Sommer is the CEO of Executive Business Advisers . Dennis is a highly sought after business growth expert with over 25 years experience.  His specialty is helping companies improve their business performance and sales revenue growth in 30 days.

If improving business performance and sales revenue growth is a priority of yours this year, contact us today to see how Executive Business Advisers can help.  Call 330-676-1876 or email us at sales@ebaac.com

Copyright © 2012 Dennis Sommer All rights reserved.

 

Sell Proprietary Products to Improve Sales Growth June 6, 2010

Posted by dennissommer in Sales, Strategic Planning.
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Is sales growth improvement a goal of yours this year? Selling proprietary products and services is one proven method to improve your sales growth in today’s challenging economy.

Offering generally available products and services places your business in the commodity zone. The commodity zone is highly competitive with a large number of vendors providing the same offerings. Pricing is usually the primary and only concern of the customer. Price discounting and lower profits is the norm for most businesses in the commodity zone.

To increase your sales revenues and profits, you should incorporate proprietary products into your business offering mix.

Offerings with a unique design, functionality and technology can make your products proprietary. This will increase the desirability of your products and services. Customers will be willing to pay a higher price for this unique offering. Proprietary products also offer protection from the competition.

Instead of focusing on being a low cost provider to win business, selling proprietary products enables you to sell your products at a higher price and profit.

I look forward to hearing from you.

Dennis Sommer
CEO, Executive Business Advisers

My specialty is helping companies improve their business growth, sales and marketing performance.

Business improvement specialties include: business startup  , business growth , sales , marketing , business coaching , strategic planning and customer retention

Call me today to schedule a free consultation:   800-627-6512