Episode #41: Sales Perils

Sales cannot run like a manufacturing production line. We are not making industrial cheese here. This is more like an artisanal pursuit, closer to art than science. Yet, every sales force on the planet has targets which are usually uniform. Each month, the sales team has to deliver a specified amount of revenue, rolling up into a pre-determined annual target. The construct may be logical, but sales is far from logical, as it is steeped in emotion, luck and magic.

Having said that though, sales is also a numbers game and to some extent pseudo-scientific. There are accepted algorithms which apply. You call a certain number of people, speak to a lesser number, meet a few and from that residual group, you conclude an agreement. There are ratios, which when calculated over time, apply as averages linking activity with results. So we call 100 people, speak to 80, see 20, strike a deal with 5. In this construct, to make one sale, on average we need to call 20 people.

With this type of precision available, you would think that we could industrialise the sales process and confidently set annual targets, neatly divided into units of 12, to arrive at a consistent steam of revenue achievement. Sales managers would be multi-tasking, sipping their afternoon martinis, propping their cowboy boots on the desk and carefully calculating their next car upgrade, as the sales team obligingly track to the revenue plan.

This is the plunge between sales peaks. It is the lull in the fighting, the quiet before the storm, the brief interlude in the phony war of sales. Salespeople work hard, usually because we are on commission structures which guarantee not very much if we don’t produce. Japan is a little different - basically there is either a base and commission or straight salary and bonuses system. Few sales people in Japan are on 100% commission. Why? Because we don’t have to and the local Japanese preference for risk aversion means forget it!

As salespeople we cannot be consistently successful unless we have two great professional skills. We must be machine-like time managers and we must also be highly disciplined. The two interlock. The ebb and flow of sales is based around customer activity. Networking, cold calling, following up with previous clients, chasing leads which come through marketing activities etc., takes time.

If we pump out enough client contact activity we will get appointments, sales and therefore generate follow up. Time starts to disappear from the mining activities that made us active in the first place. We can’t do the prospecting work, because we are too busy executing the follow up. Once the fog of being busy clears though, we suddenly see that we have a very pitiful pipeline ahead of us. So we work like a demon again to kick start generating new leads.

To avoid this valley phenomenon, we need to make time to keep prospecting every week. Hence the requirement for excellent time management skills and the discipline to make sure we are doing it every week. Otherwise, we find our time for pipeline development is stolen away by client demands, emergencies, mistake correction, more detailed discussions and results follow up with the buyer.

Action Steps

Adjust sales team targets to account for seasonality of sales to keep their motivation high
Know your sales activity ratios required to produce sales revenues
Become a maniac about good time management and self discipline
Protect time in the schedule for doing prospecting each week