Jumpstart continuous improvement in sales

By Andrea Hill

I would like to propose an industry-wide change. It is a change that could be implemented for less than $250 in most companies (the cost of a new batch of business cards), could be fully in place in less than a week, would be unlikely to meet with much resistance, and, if implemented, could stimulate a mental shift that would drive more sales.

Interested?

Well, it’s simple: I propose that each company change the name of its “Sales Department” to “Cash Flow Department.”

Who doesn’t respect cash flow? When given a choice of career path, how many young people would choose the cash flow career path over, say, the marketing career path? The psychological boost of considering oneself a “cash flow agent” is like putting on a $1,000 suit.

Do we really need a name change to elevate the sales role status? I think we might.

Though it is common for companies to rebrand, launch new marketing strategies, change product strategy, reorganize operations, outsource manufacturing, and upgrade systems and software, relatively few organizations devote time or attention to redesigning their sales approache. In most companies, evolving business dynamics and rapidly improving technology swirl change up and down the corridors, while the function of sales remains largely untouched.

Where is the motivation to analyze current sales processes and identify opportunities for improvement? To transform the sales organization into a faster, more profitable, more dynamic version of itself, you have to start looking at it as the Cash Flow Department.

Analyze the Sales Role

To start changing the way your company looks at the sales role, analyze how your current sales function performs relative to your strategy. Take the example of Company Sellit, a small designer/manufacturer that sells “organic” finished jewelry designs made of sustainable materials to the natural foods and apparel market. The company’s two owners each spend two full days every week making phone calls to potential customers. Cash flow is negative, and the partners always feel on the brink of financial disaster.

In a predicament like Company Sellit’s, it’s easy to believe that the economy is just too tough or that the product is too ahead of its time to be bringing in cash, when in fact it may be the sales effort that is bringing the company down.

Company Sellit must start by looking at the numbers. If the sales goal for this year is $1 million, and the average customer is producing $15,000 per store, then the company must have close to 70 doors. If the current strategy of making phone calls four days per week is opening only one door every two weeks, then either the goal should be reduced or the sales approach should be redesigned.

To decide how to proceed, Company Sellit must ask several why questions, including: Why is the average store revenue $15,000? Why do we open a new account only once every two weeks? Why do the retailers who take our line do so? Why do the customers who do not wish to carry our line reject our offers?

After answering the why questions, it’s time to ask the more tactical questions of what, where, how (and how many), when, and who. Some potential questions to ask when analyzing your sales role are:

• How much time does it take to turn a prospect into a customer?

• How many distinct phases exist in the selling cycle?

• How many cold calls does it take to get a meeting?

• How many meetings does it take to get a commitment?

• What objections do customers have to carrying our product line, and how could we mitigate those objections to keep them from hampering the sales process?

• Who is involved in making the decision to carry our line?

• What information is most important to each person involved in making the decision to carry our line?

• What examples (if any) do we have of customers who sought us out, and how did they find us?

• What other methods—besides phone calls—have worked for opening new accounts? 

Answering these questions should shine tremendous light on ways to upgrade your sales effort. If the owners of Company Sellit discovered that it takes seven meetings to get one commitment, and that it takes 100 phone calls to get seven meetings, that would mean they would have to make 49,000 phone calls per year to get 70 accounts. Assuming each owner takes one week of vacation during the year, they each must make 490 calls per week—in the two days they have set aside to make calls—to get 70 accounts. It seems silly and obvious when stated this way how inefficient the sales approach is, but surprisingly few companies compare their revenue goals to sales metrics to see how the two match up.

Asking these types of questions and analyzing the answers will put you on the path to revising your sales strategy to generate cash flow, but it’s just the beginning. From there, a company must consider all the available methods of sale: outside sales, contract representatives, telephone sales, e-commerce, internet-based relationship-building services, catalogs and direct marketing, and trade shows are just a few of the options from which to choose. The answers will be as unique as the personalities and offerings of the companies asking the questions.

The motivation to pay more attention to something we already have often comes from a sudden acknowledgement of its value and the awareness that we have neglected it in the past. So go ahead, try the new name. Call your sales organization the Cash Flow Department, analyze your current process, and jumpstart a system of continuous improvement in the area most likely to influence your bottom line.