As the economy slows, it’s likely that your firm’s order flow might slow, too. It doesn’t need to, though. If you can improve the performance of your sales function to the point where you can secure enough new accounts to compensate for your drop in sales without increasing your market share to unrealistic levels, then it will be possible for you to cope with these tough economic times.
To get started, develop an action plan that includes the following:
Step one. Estimate how many appointments (in aggregate) you believe it is possible to generate for your sales team each week. Remember, the number of appointments you can generate is primarily a function of the appeal of your market proposition.
Step two. Determine the optimal size of your sales team. This is the number of appointments you can generate each week, divided by 20 (each salesperson’s future capacity).
Step three. Figure out how to remove all activities from salespersons’ responsibilities other than field-based, face-to-face, business development appointments. Activities that must be rerouted elsewhere include opportunity generation (promotions), appointment setting and calendar management, solution-design and proposal generation, customer service, and all fulfillment-related tasks.
Step four. Reconfigure your resourcing model. You’ll likely discover that you need far fewer salespeople and more sales-support personnel than you currently have. Our approach to resourcing is to provide each salesperson with a dedicated sales coordinator (who manages opportunities and plans his or her calendar) and then route all other activities to a promotions person, customer-service personnel, and technical experts who provide salespeople with field support. In most cases it is possible to accomplish this reconfiguration with a negligible (if any) increase in operating expenses.
Step five. Eliminate bonuses and commissions. If you’ve been waiting for an opportunity to eliminate this caustic practice, this down economy is the time. While performance pay makes sense in environments where salespeople are truly autonomous, these environments are few and far between. As organizations transition to make-to-order environments, the requirement for tight integration between sales and fulfillment becomes critical. Tight integration necessitates teamwork—performance pay for individuals destroys the integrity of teams.
Typically, when we implement these five steps in organizations, we increase each salesperson’s activity level 10 times. However, in most cases, we also reduce the size of the sales team. A typical net result would be twice the volume of true business-development appointments, with minimal change in operating expenses.
If your current market share provides you with room for growth, this is a strategy worth considering in these slower times.
Justin Roff Marsh