The endless pursuit of profitable growth engages more thinking time of executives today than ever before. As markets become more competitive, globalised and fast paced, the pressure on profit creation becomes greater. Not only are sales more difficult to win, but profitable sales are even more challenging; depending on the approach you apply.
Here are three approaches and one is the secret to success.
As companies become more proficient in their operational performance through the application of lean principles the question must be asked “Are all areas of your business truly efficient?” This is the question is asked in many companies as they work to extract maximum profit from their organizations. Unfortunately many are not and great profit opportunities are being missed.
Typically people relate efficiencies to the principles of “lean” and those principles being applied within operations. The principles of “lean” are to question processes and look for methods of making gains in effectiveness and continuous improvement. Traditional thinking is to focus on those principles in operations.
If you step outside traditional thinking and allow the principles of “lean” to flow into the sales organization, you will find many gains can be made.
Companies are continuously looking for growth but often miscalculate the real costs associated. There are many schools of thought on how to achieve growth and market share. For some companies acquisitions and mergers are the best route. For others with less capital available, the growth must be driven from within the business. The emphasis then shifts directly to the sales force and their activities.
Over the last few years, many companies have taken cost-cutting initiatives in an effort to retain profitability in their business. Other companies are now contemplating this challenge as they are exposed to different industry cycles and economic challenges. The question is “Are you cutting too deep and actually stopped the company’s ability to grow and bounce back in the future?”
Companies often make the error of making the decisions based on their income statement and remove items that are seemingly excessive. Unfortunately the figures that often stand out are marketing and sales head count overheads and related expenses, as they are typically a high cost to the business and their expenditure is poorly justified by their relevant departments.
A resounding 84% of chief executive officers have reported dissatisfaction with their sales leaders’ performance. Their businesses are exposed to avoidable profit losses because they don’t believe their sales leaders can deliver results in the new economies.
CEOs must act now to mitigate the risk of further profit losses – and they can do this by applying to sales the same level of scrutiny that they apply to operations and finance. No longer can sales be ignored as a significant profit regulator. Sales leaders’ underperformance can have a catastrophic impact across the company.
Sales Focus International recently put to 480 Australian and New Zealand company CEOs the question “Are you better positioned to excel in 2013 and beyond?”
Since the global financial crisis, there have been many things that have changed within companies and the sales force is one that has been particularly impacted by the changing economies. The way sales forces operated and dealt with their customers’ pre the GFC is certainly not what the playing field is today. Those companies believing there has been little change are well out of step with the realities and may well be losing bottom line profit unknowingly.
The goal of any organization is to reduce costs and maximize profitability whilst retaining customer value. That is what everyone within an organization or company thinks about, works toward and wants to achieve. In pursuit of that goal, many different principles have been applied to business but the sales and marketing function continue to fail miserably against the operational side of the business when it comes to cost reduction and maximizing profitability.
Sales leakage, that is the loss of potential sales for whatever reason, can have a devastating effect on an organization if not properly dealt with. Most companies only look at the obvious sales leakage as the loss of not winning a tender or bid, a proposal not being successful or a deal not coming through. Sales leakage goes far deeper than those obvious points.