Sales Led Revenue Growth

If you expect your sales team to drive growth, perhaps you should ponder the latest sales research to see how your plans might be impacted?

  • Only 14% of salespeople are professionally trained – in another 10 years this figure could be as low as 5%.  Two thirds of sales reps miss their quota; is there any correlation?
  • A new sales recruit can cost £80,000 [1] a year in sales support costs alone.
  • A likely timescale to allow for a new sales recruit to become fully productive is 10 months or more [2] , however if you’re in industries such as technology, medical solutions and complex business services you can reckon on up to 36 months to effectiveness [3] even if they come from a similar industry.
  • Less than half of sales reps believe in their own pipeline predictions; could this be attributable to lack of objective criteria, structured process, or meaningful reporting?
  • The optimum level of coaching for reps who are struggling to achieve their targets is 3-5 hrs per month [4] but on average most receive less than 2 hrs.

So what can these figures tell you, apart from the need to plan well to avoid the cost of failure?

This is not just about recruitment or training , it needs a fresh view and a complete change to the established way of doing things.  Your people may have the knowledge to put the necessary change programme in place but, it will put severe additional load on their management of day to day business. Our academy solutions are designed to support you in your growth plans by delivering an outsourced resource integrating your existing successful process into a seamless service:

  • Tailored recruitment to reflect the nuances of your culture, industry, market, brand, customer, etc.
  • A comprehensive induction programme to ensure the new recruits become an integral part of your organisation so they can deliver your proposition, your way to your customers.
  • Basic and advanced (soft and hard) skills learning and development to create a customer centric, commercially aware, adaptable sales force.
  • Coaching and mentoring to embed the learnings through real world examples.
  • Development and support of the sales leaders so they can in turn leverage and enhance the productivity of the newly trained sales force, and ascertain leading indicators for a reliable pipeline forecast.
Basic scope of an academy

Basic scope of an academy

Once the academy solution has been successfully piloted it can be brought back in-house or remain (partially) outsourced according to your on-going needs.

Request a call back to explore how our tailored Sales Academy solution can help you grow your revenue and margin.

Sources:
1 Qvidian quoted $135.000
2 CSO Insights
3 Forrester
4 CEB

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Acorn creating mighty Oak

Is 1% improvement in anything worth having?

At first view probably not, but to illustrate the value that can be gained from small but continuous improvements in business performance we have chosen three key areas to consider; revenue generation, gross margin, and cash collection.  There are also lessons to be learned from looking outside these conventional areas of the business into the world of IT testing and data quality.

So is 1% improvement worth having?

A 1% improvement on annual revenue of £100,000 would be impossible to spot as it could easily be swamped by normal fluctuations in customer activity.  However, what if you were able to improve your revenue position by 1% every month; now you would be looking at a 12.5% compound increase for the whole year – worth having?

Acorn creating mighty Oak

From little acorns …

From a different perspective, it is likely to improve confidence in pursuit of an improvement if you set a SMART objective of 1% increase per month rather than an annual 12.5% increase.

Following on from a LinkedIn thread referring to Dave Brailsford’s successful approach to Team Sky, we explore a number of key areas where the approach can be used in business to gain real benefits from small, incremental/cumulative changes.

We have also looked outside the usual areas of a business where people seek to make improvements as we think there are good lessons to be learnt elsewhere; we look at the world of IT testing and the cost of bad data where the focus is the other side of the coin; reducing waste.

Revenue Generation

Everything starts here; without revenue there is no margin, profit or cash, in fact; there is no business.  Whether your business is turning over £100,000, £1.0m or £100m per annum the same basic principles apply; it is easy to visualise and bring about small incremental increases in revenue which quickly add up to something significant.

  • Be more selective, at an earlier stage in your selling cycle, when deciding which opportunities you will pursue.  Avoid time wasters, tyre kickers and those who are just interested in a low price.
  • By spending more time on fewer better quality opportunities you will increase the chances of closing more business.
  • From the same amount of marketing and selling effort you will gain more revenue and yes that could easily be a 12% increase in a year.

Gross Margin; improvement and protection

Margin can suffer in two main ways.  Firstly, if you feel obliged to reduce your quotation without also reducing the amount of effort you will put into delivering the result.  Secondly, reducing your price, even if you reduce the amount of effort, will result in a reduction in margin.

  • Having been more selective in the opportunities you choose to pursue you will have removed at least some that would have dented your margin.
  • From the earliest stage, when engaging with a potential customer, demonstrate the value that you deliver and avoid being sucked in to talking about price; value is what matters.
  • By demonstrating the value you deliver you make it harder for the customer to justify to themselves pushing down on your quoted price.
  • Quote the real price for the amount of work that needs to be done; don’t delude yourself that you can “make it up later”.  Along with death and taxes one of the givens is projects always take longer and cost more so you won’t be able to make it up later.
  • Once you have the deal you can avoid margin erosion by delivering exactly what you quoted for and the customer contracted for.  Don’t be tempted to undertake “added value” work as it will dent the margin and the customer probably won’t know or appreciate what you have done.

If, for example, you have revenue of £100,000 on which you make a margin of £20,000 then to gain an increase of £1,000 on the margin you will require an increase in revenue of £5,000.  Alternatively, you could keep the revenue at £100,000 and employ some of the above tips which could easily add that extra £1,000 or probably more to your margin.  You get the same or a better result without additional effort.

Cash Collection

Whether you are funding your business from your own resources or a line of external finance then every day a customer has your money in their bank account it is costing you interest and it is also reducing the funds you have available to invest in your business.  Here are a few tips to help you get your money faster:

  • At an early stage in the engagement with a potential customer discuss contractual terms, including payment terms, don’t leave it until the end as you will have far less negotiating power.  Don’t allow the desire to win a piece of work get you bullied.
  • Don’t be shy, ask for what you need.  Always ask for some money up-front and if you are delivering projects ask for staged payments making sure those stages align with the outgoings you will have on the project.
  • Make your payment terms short; seven or 14 days.  The customer will try to negotiate up and even if you let them you are more likely to get 21 or 30 days than you would have been had you started at 30 days.
  • Discuss your terms with the decision maker and get them to agree; don’t assume that because they have signed a contract with your terms that they will have taken the internal steps required to get you paid when you expect.  If the customer wants to use their terms you do not have to accept everything as presented; it is called an agreement not a dictat.
  • As soon as the agreement is signed call the customer’s finance department, introduce yourself and let them know they will be getting invoices from you.  Ask them what you can do to make their lives easier; should invoices be posted or sent electronically, do they have specific days for processing invoices, do they work part-time, etc.
  • When you raise an invoice, send copies to both the sponsor/budget holder and the finance department.  After a few days call to make sure they have it and ask when it will be processed.  Call back again just before processing date to confirm it has indeed been authorised and will be included in the payment run.  Don’t be shy, it is after all your money!

Even small reductions in your debtor days will improve your finances easily delivering a 1% improvement per month.  But more importantly, you will have greater financial certainty and your money will be available sooner for you to invest or spend.

Lessons from other worlds

It has long been recognised by those in software engineering, that the cost to repair an issue escalates the longer it remains undetected in the lifecycle.  Typically a 1:10:100 type ratio is applied to correction costs, and that excludes the additional cost of impact if the issue “escapes” into the wild (production).

If you search the web for “1:10:100 rule” you will notice that this basic ramification is being applied to the cost of bad data also.

The world of software engineering is much more precise than the world of sales and marketing or business management but the same principles of early detection can be beneficially applied to all areas of the business.  If your first meeting with a new potential customer tells you; “we are unlikely to win this one at a good price” then qualify it out there and then.  Or you could do what many businesses do; invest a lot of time and effort bidding for the work only to find you don’t win or worse still you do but at a very poor price.

Be brave; qualify early, qualify hard!

Sales – The Missing Link in Business Success

Sales & Selling Performance - the complete story

Sales & Selling Performance – the complete story

If you missed the broadcast on 31st October, you can listen in to the podcast via the UK Entrepreneur Network site to hear Phil as he lifts the lid on approaches to turning opportunities into profitable revenue, and shares several valuable sales tips.

The associated presentation slides can be found here.

Our thanks to George Montgomery for making this possible.

Business growth

Business Growth

Are you an owner manager or business leader, looking to take the next step?

As your business grows, so too the C level team may need to evolve; focusing more on strategy and less on operations, or delegating specific functions. Sometimes, trying to achieve this on your own can be frustrating and risky, requiring a steep learning curve.

In such times of change it can be more cost effective to use external resources to provide the particular skills to successfully design and implement the changes as they are likely to be significantly different to the skills required to maintain the new environment.  An interim appointment is often ideal for these circumstances.

We can work with you and your top team to develop strategic and tactical (sales) plans for:

Growth: providing support, advice and guidance for directors and owners who are dealing with the many problems arising from growing a company in today’s tough business environment.

“Performative has helped us to refocus on our current products and also to look at new markets and we are working as a board far more efficiently.” Director, International Mailing company.

“The work done by Performative created a great foundation for what is now a very successful business.” MD, IT Solutions company.

Succession: If business success has been heavily reliant on your involvement, it is natural to be apprehensive when handing the reins to others so you can devote more energy to the future of the business and coaching your successors, or to freeing you for your next business. We identify the profile of your ideal recruit and shortlist appropriate candidates for your final decision.

“In early 2010 we decided to recruit a Commercial Director to take over the management of the sales and marketing function from me and Performative designed and ran the entire recruitment project. The service provided was excellent as it allowed me to spend more of my time on business, both operationally and strategically, while Performative ran the recruitment project.” MD, IT Parts company.

“Having Performative involved in recruitment of crucial sales appointments gave me peace of mind to leave the UK and build our US operation.” CEO, On-line Education Support company.

Structural Change: drawing on a wealth of practical experience to support you in the preparation and execution of strategy for; new market penetration, acquisitions, mergers, outsourcing, floatation or post-acquisition/merger harmonisation.

“Following the successful completion of a Sales Performance Transformation programme, Performative continued to work with us in support of a plan to effect a management buy-out by existing senior executives. Their wealth of business experience and specific knowledge of the M&A market enabled Performative to provide me with real practical help in finding my way through the minefield of the MBO. In particular it helped me to understand what to expect from the accountants, lawyers and banks, and thus prepare for their processes in funding an MBO. Performative also provided invaluable assistance to the members of the MBO team. Without the support of Performative this would have been a much more difficult exercise peppered with pitfalls.” CEO, Communications company.

Exit: providing expert assistance in preparing your company to make it an attractive proposition for trade sale, divestment or MBI/MBO, enabling you to focus on business as usual and retain business value.

“Performative drove the process throughout, without which support either the business would have suffered or the deal would never have completed. Since completion Performative have continued to support us through the early stages of integration. I am extremely happy with the result they have obtained for us.” MD, Media Agency.

Feel free to contact us for a confidential discussion on achieving your growth plans.