Are your sales falling short of expectations?
It’s a scenario that can cause concern or panic for any CEO or business owner. Rather than succumbing to worry, it’s time to take charge and ask the right questions. In the world of sales, the numbers never lie, but the reasons behind those numbers often hide in the gray areas between people, processes, and vision. To get a handle on a situation when the numbers are trending negative, it’s essential to as Jim Collins tells us, to “face the brutal facts.” Here are eight essential questions, if answered honestly will help uncover where to prioritize remedial efforts to turn you sales trajectory around.
1. Why do you think sales are falling short of your plan?
Dive deep into the underlying factors contributing to the decline in sales.
- Is it due to market shifts, competitive pressures, product issues, or something else?
- Is this a “we” problem, meaning the industry as a whole or a “me” problem, meaning something within the operations of the company?
- What is the activity with your top 5 customers over the past 6 months?
- What does your CFO/controller say is the problem base on their read of the numbers?
- How realistic where your goals to begin with? Did you misjudge some assumptions?
Understanding the root cause is crucial for devising effective strategies to address the problem and drive sales growth. Utilize the “Five Whys” technique pioneered by Toyota to drill down into the root cause of the issue. Ask “why” repeatedly to uncover deeper layers of causality until you reach the fundamental issue. For example, if sales are down, ask why. Then, with each subsequent “why,” delve into the specific factors contributing to the decline until you identify the primary issue that needs addressing. Go five levels down until you get to the root cause.
Being honest and thorough in your assessment will uncover misalignment with your goals and capabilities.
2. What are your top 3 to 5 specific and measurable leading activities that you are tracking every day, week, or month that drive your top-line growth? Can you show me the report?
You’d be amazed at how many CEO’s don’t have this information readily available, yet are shocked when cash flow comes up short.
- Does the business Identify the key activities (key performance indicators—KPIs) that directly impact sales performance?
- Is the sales team focused in on an articulated, measured and managed sales funnel—focusing on prospecting, lead generation, customer outreach, or closing techniques?
Analyzing these leading indicators can provide valuable insights into the effectiveness of your sales strategies and help you identify areas for improvement. By tracking these activities regularly and measuring their impact on top-line growth, you can make informed decisions about where to allocate resources and how to optimize your sales processes for better results. Additionally, reviewing detailed reports that outline the performance of these activities over time can help you identify trends, patterns, and areas of opportunity for improvement.
3. What measures have been implemented to ensure both you and the sales team are held accountable for achieving the set targets?
Establish clear accountability measures to ensure everyone on the team is committed to achieving sales targets.
- Are individual and team goals clearly defined and communicated?
- Are performance metrics tracked regularly, and are consequences in place for not meeting targets?
Holding everyone accountable fosters a culture of responsibility and drives motivation to achieve results. This includes setting specific goals for each team member, providing regular feedback on performance, and recognizing and rewarding achievements. It also involves holding team meetings to review progress, identify challenges, and brainstorm solutions collaboratively. By creating a culture of accountability, you empower your team to take ownership of their performance and strive for excellence.
4. How Effective is your Sales Leader?
Evaluate the effectiveness of your sales leader in driving sales performance.
- Is your sales leader effectively communicating goals and expectations to the team?
- Are they providing the necessary support, guidance, and resources to help the team succeed?
- On a ten point scale, how effective is your sales leader? Why do your rank them like that? If they are a 7 or 8, what would it take to get them to a 9? If they are 6 or less, why are they still working for the company?
Assessing your sales leader’s leadership style and capabilities can uncover opportunities for leadership development and improvement. This includes conducting regular performance reviews, soliciting feedback from team members, and identifying areas for growth and development. It also involves providing ongoing training and support to help your sales leader improve their skills and capabilities. By investing in your sales leader’s development, you can strengthen their effectiveness and drive better sales performance across the team.
5. Is your sales team properly trained and equipped, and have they bought into your sales goals?
Invest in comprehensive training and development programs to equip your sales team with the knowledge and skills they need to succeed.
- Are your team members adequately trained on product knowledge, sales techniques, and objection handling?
- Does your sales team understand and align with the company’s sales goals and objectives?
- Do you have an annual sales planning session where goals are discussed, hashed out and bought into? Are there quarterly update meetings and how effective are they?
Ensuring your team is well-trained and aligned with company goals is essential for driving sales success. This includes providing ongoing training and support to help your team members improve their skills and capabilities. It also involves fostering a culture of collaboration and teamwork, where team members feel empowered to share best practices, seek feedback, and support each other in achieving common goals. By investing in your team’s development, you can enhance their effectiveness and drive better sales performance overall.
6. Does your sales compensation plan fully align with the sales outcomes you aim to accomplish?
Review your sales compensation plan to ensure it incentivizes behaviors that drive desired sales outcomes. There is no mystery: Your people will produce the results you incentive them to attain.
- Does your compensation structure reward performance that aligns with company goals, such as closing new business, increasing customer retention, or expanding market share?
- Do you even understand your sales teams motivations?
Aligning your compensation plan with sales objectives motivates your team to focus on activities that drive meaningful results for the company. This includes reviewing and updating your compensation plan regularly to ensure it remains competitive and aligned with market trends. It also involves soliciting feedback from your sales team to understand their preferences and priorities when it comes to compensation. By aligning your compensation plan with sales objectives and the needs of your sales team, you can motivate your team to do their best and push the numbers in the direction desired.
7. Do you know who are your best customers? How do you engage and take care of them?
Identify your top customers and prioritize efforts to nurture these relationships.
- Are you providing personalized support, proactive communication, and value-added services to your best customers?
- How do you define 5-star service? Is that being provided?
- The very best business strategy I know is to always give your customers a little more than what they are expecting. What is your little bit more and how is that being communicated to them?
Building strong relationships with key accounts strengthens customer loyalty and maximizes customer lifetime value. Additionally, implementing loyalty programs and incentives can further incentivize repeat business and foster long-term customer relationships. This includes conducting regular reviews of your customer base to identify your top customers and understand their needs and preferences. It also involves developing tailored strategies and initiatives to nurture these relationships and provide added value to your top customers. By prioritizing your best customers and investing in their satisfaction and loyalty, you can drive sustainable growth and success for your business.
Additionally drill down further and ask these questions:
- What is the retention rate for your customers?
- Who are your competitors? Are they stealing your customers? Why?
- What can you do to convert more of your customers into “Best” customers?
- Can you bill some customers in advance? Can you get smaller customers on a monthly or annual recurring plan?
- Can you create a loyalty program or incentives to improve sales and/or make them more consistent?
- What is the biggest impediment to getting more customers?
8. Have you answered the BIG questions: Who are you? What do you do? Why do you do it?
Knowing the answers to the BIG questions helps with the little questions. If you haven’t take time to understand who you are and where you are going it will be difficult to map out your path to success. If you don’t know who you are, how will your customers?
- Does the company have an articulated vision and mission? Do all employees know where the company is going and what the destination looks like?
- Are there articulated company values which are lived and evident in company behaviors?
- Do all employees consistently demonstrate the values the company has articulated?
By asking these eight tough questions and taking proactive steps to address the underlying issues, it’s possible to identify opportunities for improvement and drive meaningful change within your sales organization.
This can be a hard process. Really seeing the situation “as it is” and not through a skewed or biased viewpoint might not be possible. CEOs and business owners should consider if they or their people are capable of peeling away the onion layer to find the true answers. Getting outside perspective might be a better option to get to ground truth as quickly as possible, so the path to remediation can begin. Contact me for complementary consultation if you need help in this process.