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|Improve Sales Performance Through a Focused Customer Strategy
Harvy Simkovits, CMC Published in Boston Business Journal 8/6/99
In a recent mid-year sales budgeting meeting, a small-business owner met with his general manager and senior sales staff. Sales had been lagging by 5 percent for the first half of the year. In a bold declaration, the business owner announced that despite hiring new salespeople that sales were lagging. He stated that by the end of the year, the company should be showing numbers 20 percent above the current sales pace. Everyone agreed that sales needed to be up significantly with the current staff, yet they didn't know how they were going to accomplish that. Few felt confident that the owner's numbers would be attained the way things were currently going.
The Typical Sales Approach
A typical approach to solving this type of sales dilemma would be to go and "beat the customer bushes." Salespeople would make either more calls to prospective customers and close them sooner, or more visits to existing customers and push more products and services upon them. The focus would be on working harder and building one's personal capability to close more sales sooner. This approach might help somewhat, yet it is unfocused and could "burn-out" the sales force. Sales may go up in the short run, but would run the risk of crashing once the sales force saturated existing customers, or ran itself ragged.
A More Strategic Sales Approach
A more strategic and focused approach to this sales dilemma would be to determine which types of existing, prospective and previously lost customers would be most likely to purchase more from the company, and which current or new product (or service) categories would be the ones needed to better sell to those higher-potential customers.
In that regard, the general manager of the company embarked on a simple study of the company's customer base and product line. He initially compared historical sales data about the company's wholesale and retail customers and wholesale distributors, divided by industry sector. With these comparisons, the general manager then studied which product categories and customer types increased and decreased in terms of its sales volume and gross profits, and why that increase or decrease happened in those specific product/market segments.
After gaining an understanding of the historical customer and sales trends, the general manager then turned his attention to the present and future. He considered which markets were the most likely places to gain more business (number of customers, sales and gross profit) both in the short term and in the long term. He also thought about which specific existing and prospective customers would be the most worthwhile to pursue, in the near and long term, with the company's limited sales time and energy.
Along the way to addressing all the above issues, the general manager involved his senior sales staff in the analysis and discussion about customer and sales trends and about future sales potential. With this involvement, the sales staff became committed to pursuing the most appropriate customers with the most appropriate products.
Armed with this solid information, the general manager came forward to the company owner with a plan as to how he will move the business to the sales level sought by the owner. After some debate, they agreed on the appropriate sales targets for the remainder of the year and into the following year. At the end of the conversation, the owner was very impressed with the level of analysis and thinking that went into sales strategy planning, and all felt more confident in the sales force being able to reach their agreed-upon numbers for the year-end.
Other business owners, general managers and sales managers would be wise to follow in the footsteps of this insightful company. Thinking through your company's customer strategy can get your sales effort focused as a rifle shot, as opposed to being diffused like buckshot.