Many times, right choices are counterintuitive.
An inexperienced skier, for example, tends to turn his shoulders uphill instead of extending them downhill when facing a steep descent. And the more he instinctively defends himself by tilting his torso backwards rather than forwards, the more he affects his balance and loses control.
A company makes similar mistakes: sometimes the right choice is not the most natural one.
Consider the case of a company with sales problems: there are 3 errors that this company usually makes when deciding on a new strategy to sell more. In Italian we call them “abbagli” (blunders), because at first glance each of these decisions would seem right. But the daily reality alongside so many companies shows that reality is different.
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Error No. 1: entrusting the search for new customers to salesmen
Once upon a time, each salesman was assigned a list of customers and/or potential customers and/or a postcode list at the beginning of the year, and he was told:
This is your target turnover; this list of companies and post codes is where you can move … Now ask the Marketing department to get you some brochures, then go and sell.
Since the salesman had written “Sales Manager” on his business card, he was responsible for the entire sales cycle, from prospecting to closing the order.
This approach may have been appropriate in the past, but it’s now completely useless.
It’s not our fault, it’s the results of so many customers showing that no salesman does prospecting anymore. Each of them always finds a very valid logical reason to do anything but look for old customers. They don’t want to do it, and even when they start doing it, they’re not good at it. They are able to finalize opportunities, but totally inadequate to obtain them.
So, any strategy based on assigning salesmen the task of gaining new customers is doomed to failure today.
Error No. 2: Hoping that retailers will get customers on their own
Company policies often assume that retailers know how to look for customers.
Based on this assumption, the company hopes that the acquisition of a new retailer will represent the beginning of a continuous flow of new customers in the area covered by that partner.
It’s never like that.
The retailer is in turn a company with vendors, so it falls into the previous case. Its sellers will do nothing more than offer the company’s products to existing customers, and then they’ll stop there.
The retailer has just one goal: profit. He only does what it takes to brings him (more) profit. And since prospecting takes time and money away from him, it’s not his strategic goal. If anything, his strategic goal is to use the company’s products to sell more – easily, quickly, cheaply – to his customer base.
We have never met any retailer who would like to enter into a partnership with a manufacturing company with the aim of investing in expanding the number of customers. No retailer is interested in investing in prospecting activities. The retailer is only interested in two things, which are completely at odds with the manufacturer’s objectives:
- purchase new products to sell to old customers;
- acquire the manufacturer’s customers in its area, to expand his penetration.
The goal of the retailer is therefore ANTITHETICAL to the hope of the manufacturer to bring its products to new customers.
An agreement with a retailer, therefore, should not be seen as a MANDATE of responsibility, but as an ASSUMPTION of responsibility:
“I, the manufacturer, sign an agreement with a retailer knowing that the retailer will (perhaps) sell my products to its customers. And if I want the retailer to sell my products to new customers, I must take these new opportunities to them on a silver platter, otherwise the retailer will do nothing. And I also need to provide him with all the support he needs to make his sale easy, fast, cheap, and able to bring him a good margin.”
Error No. 3: increasing the number of sellers
When we worked in corporations, at international meetings the password was “feet on the street”… Oh my God, what a mistake…
Solving a turnover problem by hiring additional salespeople or new agents only makes sense if the company has already saturated the production capacity of its current sales network.
Otherwise, it’s a mistake similar to the previous ones.
Yet still today we meet old-school owners who think that
development = more sale … sale = sellers
and so, they think that to grow the company you have to hire two good salesmen, and that’s it.
Often the search for new sellers is a discharge of responsibility: the company goes wrong, we have to sell more, we hire sellers …
This trend is particularly evident in times of crisis.
Let’s look at the graph below, which has just been extracted from Google. It compares the searches for the word “sellers” on Google, from February 2013 to January 2015. As you can see from the two histograms and the table below, monthly searches have increased by almost 50%!
What’s that supposed to mean? It means that in years of contraction in turnover there’s a tendency to solve the strategic goal of “selling more” by simply hiring new sellers.
But this is a resounding slip-up.
If increasing the turnover is the strategic objective of the company, the strategy cannot be to find two sellers: if a company doesn’t predispose a sales machine that doesn’t need the initiative of the individuals to work, hiring two more sellers is just a temporary palliative.
Each of the two salesmen (just like retailers) tends to sell to their existing customers: it’s much easier, faster, more rewarding. It also allows you to meet the goal, to take the awards, and still make the company happy thanks to the turnover.
In the short term, therefore, everyone is happy, because the new seller has brought some new customers from his old portfolio. But after this initial flush everything will come back to where it was. The two sellers will continue to sell only to existing customers, and they will always have a valid reason not to find time for prospecting.
The company may have acquired a few new customers, but there will also be two salaries and two expense reimbursements or two additional commission advances to be paid at the end of the month.
The real solution
Let’s summarize the three mistakes:
Error no. 1: Entrust the search for new customers to the sellers;
Error No. 2: Hope that the retailers will get customers on their own;
Error No. 3: Increase the number of sellers.
None of these three approaches works: they can provide an initial small result, but they are errors because in the medium to long term they don’t help to solve structural problems, i.e. they don’t allow the company to increase turnover and sell more permanently.
So, what’s the solution that can offer a sustainable growth model?
Our vision is categorical:
- Sellers should NOT be responsible for finding new customers;
- the company, before starting recruiting new sellers or retailers, must first equip itself with a system capable of generating new sales opportunities in a systematic, constant and measurable way;
- the system is a “machine”, i.e. a set of procedures that can be repeated every month and duplicated for more than one product or target or geographical area;
- Marketing is responsible for creating, fine-tuning, feeding and maintaining this system. Therefore, it’s Marketing that must generate leads, feed them, qualify them. When a lead is qualified, it must be passed on to Sales, just like a baton;
- Sales, which are no longer oppressed with the task of finding new customers, must handle the lead received from Marketing, and develop opportunities until the order is closed.
When things are orchestrated like that, it all works:
– The Company has full control of what it wants to achieve, and how it wants to achieve it;
– Marketing has its objectives, with no ifs or buts;
– Sales have their own goals, with no ifs or buts.
Only then does the search for new sellers or resellers make sense, because they fit into a context in which the search and generation of new opportunities is made “upstream” by the company, and the sellers or resellers have the task of finalizing them.
Our practical implementation of this philosophy is distilled into Lead Generation Farm™, the exclusive Lead Generation Farm™ marketing automation system that generates qualified leads 365 days a year. The leads generated by the Farm are new business opportunities ready to be passed on to Sales.
To learn more about the assumptions of the Farm and see how it works, we recommend visiting www.leadgenerationfarm.com