Why is my sales machine stalling?

Businessman looking under bonnet of car to see why it stalled

It’s widespread frustration and for a good reason when your sales machine stalls. All too frequently, the contributors—sales talent, front-line management, marketing—produce inconsistent and unpredictable results, leading to unsatisfactory sales performance and higher risk.

CEOs take steps to gain control of the sales machine but can be challenged with the ever-changing landscape and mystery created within the sales organisation. Some step back in fear of scaring away the best salespeople and dooming the company to poor financial results. Others make some inroads for improved control, but the results remain relatively unpredictable. It is a case of needing to break through the barriers and mature the sales machine to deliver a more predictable sales performance.

The CEOs desire and need to have the sales organisation optimised to achieve the same levels of efficiency, productivity, transparency, and measurement that are expected from the rest of the company is real. When the sales organisation is operationalised—as typified by repeatable processes, a consistent management cadence, and a set of metrics that drive business decisions—it can be managed far more effectively to achieve growth objectives, reducing a company’s risk profile. However, for sales, it goes a few steps further. It’s not just about systemisation; it is how the systems are used by management and ultimately the alignment to the buyers. The challenge, of course, is getting through to the level that will deliver reliable forecasts and consistent results.

A good place to start is understanding clearly what your sales organisation should look like and how it should conduct itself to excel. What is the detail that should be seen in each aspect, and how should your management and team be responding to information from both the organisation and customers?

There are four stages of sales machine maturity, and each stage builds upon the prior one. Let’s look at each of those stages at a high level.

Stage 1: Magicians at Work

This stage is a very early stage where companies are dependent on a few superstar salespeople for most of their revenue. Typically, companies that have grown from small business backgrounds where a handful (or less) of salespeople have been instrumental in delivering the growth. One of those salespeople rises to the role of sales manager. There are typically as many different varieties of sales practices and behaviours as there are salespeople, resulting in fluctuating and unpredictable sales results. Hiring new salespeople into this environment usually leads to poor results and high turnover as new people struggle to find their way to meet targets.

CEOs struggle to gain an answer to their questions and become beholding the relationship with each sales manager to do the right thing and believe the best results possible are being achieved. These companies typically have capped their growth early in their cycle. In response, they turn their focus to operations and product to find ways forward.

Through frustration, at a point in time, the decision is made to formalise sales and install systems and structures shifting the business to a new level of maturity and often following the formalisation of other areas of the company. For sales, this can be one of the hardest changes to implement in any business but moving on from this stage is imperative for the organisation to grow.

Stage 2: Judgement Orientated Sales Managers

Sales leaders reluctantly commenced adopting more discipline and process in sales organisations with the advent of the CRM systems. The emergence of CRM created a medium for management of personnel to understand more about their activities and installed a common language across the business. Within the CRM, managers created opportunity scorecards, qualification criteria, and activity metrics—all part of a formal sales process designed to assist their team members to replicate the approaches of star performers. This is their world of the sales machine, built to outperform less focused and disciplined competitors through efficiency and world-class tools and training. Many consulting and training firms are focusing on just this step alone.

These organisations sales machines are marked by a strong process orientation, clear lines of authority, and close governance through formal rules in each stage of the sales process. They particularly emphasise individual performance, nurturing a competitive atmosphere characterised by winner/loser cultural conversation. They monitor salespeople with close attention on short-horizon metrics—especially cycle times and close rates. For years, the on-going tuning of this sales machine has been the primary means of boosting sales productivity. These judgement orientated sales managers are often responding with more reporting, more scrutiny, and more pressure applied on closing sales in response to poor performance.

It was a significant step forward from stage one but not far enough for today’s business demands.

For many companies, sales have been caught off guard by a dramatic shift in customers’ buying behaviour in the past decade. Buyers no longer wish to follow the journey that has been bantered by training companies for many years. This lack of alignment has seen sales performance grow increasingly erratic and unpredictable. Companies are reporting longer sales cycles, impacting less reliable forecasts: poorer conversion rates, , and compressed margins. The sales machine is stalling.

The need to take the step and move to people and process sales managers is unquestionable.

Stage 3: People and Process Sales Managers

When we look at the entire organisational climate, we find a mirror image of the sales machine issues in other areas of a company. The emphasis on compliance with protocols has supported operational based functions improve productivity and efficiency, but they too have shown signs of stalling. Companies reach a point where scrutiny of performance through judgemental practices starts to reverse to create lower productivity and output. For sales, this directly impacts the results being produced by the sales machine.

The companies excelling are those that go one step further and have a managerial focus on using the information being gathered and reported and providing guidance and support to salespeople rather than just inspection and direction. This is crucial for giving salespeople the support and latitude they need to win in the new business environment.

This raises the bar on the contribution required from sales leaders to build a high-performance sales machine.

The challenge for them is many average-performing salespeople benefit from—indeed, rely on—clear direction. The key is to give them direction regarding their sales process and pipeline activities while guiding them through and holding them accountable for results. They are tracking specific milestones on the way to a sale. This demands a higher level of interaction between the sales leader and the salesperson. It requires a skilled sales leader with sound selling knowledge to guide the person (not tell them what to do) while maintaining a keen eye on metrics and drivers for the business.

Salespeople are most likely to succeed in their interactions with customers when they feel supported rather than directed by sales leaders. When they are held accountable for sales outcomes rather than just for performing certain activities; they become more engaged in the process. The challenge is to understand that there is no single path to the outcome. There are many paths to the right outcome that might equally be paths to the wrong one too. So, it is managing and guiding the different journeys to the result.

What we do know is that stage 2 cannot operate without stage 3 and vice versa. The company must evolve through each step to reach the next level.

Stage 4: Customer Verifiers

This is the stage where customers contribute to the sales machine measures giving the full 360-degree view of what is occurring and how it will impact sales output.

Leading sales organisations have embraced important changes in managing the sales machine. They now track and report on the customer verifiers, not just the salesperson’s actions. This change explicitly encourages salespeople to focus on achieving specific milestones knowing the customer is equally engaged in the journey. It promotes the best way instead of merely executing activities in a prescribed way.

As a result, salespeople can think more creatively about how to elicit reactions and milestones from individual buyers. In the new, highly varied sales environment, prescribed activities may not be the best way to achieve the outcomes. Increased alignment to the buyers is imperative, particularly as they enter later in the sales process than ever before. The internet has allowed buyers to go on a journey without the inclusion of salespeople as they find seemingly plausible solutions to their problems.

For sales, it is about having the opportunity to now engage earlier with the buyers to travel with them on the journey and influence their thinking with your solutions. Marketing needs to engage and draw buyers to sales as early as possible in the process. This approach is about creating demand, not merely responding to it.

Overriding it all, is verifying whether the customer is prepared to change is a prerequisite to pursuing a sale. Tracking this shift in buyers attitude requires more in-depth scrutiny. For example, when the buyer has scheduled a demonstration, salespeople need to look at whether a decision-making group has conceded that its existing approach is significantly underperforming.

To create a customer verification environment, sales leaders must rethink how they manage and what they measure to support salespeople and ensure the right guidance being offered. Instead of demanding that a salesperson progress methodically through a checklist of sales activities, managers must focus on the customer’s behaviours, especially signs that the customer would welcome new insight about its solution. Such signs include the buyers acknowledging that the status quo is no longer working. Conceding that other solutions are less viable and revising purchasing requirements and specifications in a way that reflects your companies advantages. This shift in focus gives salespeople greater latitude to use their judgment about the most-effective ways to drive a sale. It does require the salesperson to be an accomplished seller, and often, this level of interaction can take years to master. The quality of guidance from the sales leader being a direct contributor to how long it will take the team to develop the required skills.

Customer verification requires a contribution from marketing, the sales leader, and the salespeople for it to render successfully in the company.

Finding Your Current State

Most companies’ sales machines get stalled in Stage 1 or 2 because they don’t realise the scale of improvement opportunity available to them. CEOs are concerned about the magnitude of the changes required and whether the sales machine is sufficiently capable of making the changes. Ultimately, the goal is to get to take the sales machine to stage 4. To get there, you need to understand in an objective way where your company is positioned today and the steps you need to take to move forward.

For many CEOs, they usually know something is not working right in their sales machine before the sales results stagnate. However, many are not comfortable to initiate difficult conversations with sales leaders that will drive change. We have provided you with a handy eBook to assist you with that conversation.

Conducting a revenue improvement review is the place to start. It provides you with the structure, answers, and actions that need to be taken to reinvigorate your sales machine. Once identified, that re-invigoration can be sales leader lead, or by external support to drive the change through the organisation. You can read more about the process of how to get there by clicking here.

If you would like to discuss your specific situation and establish an improvement plan, please reach out to Adele Crane.

© 2019 Adele Crane. All Rights Reserved.

 

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