By Brett Lyons
Working in sales leadership and management, I’ve met with sales leaders operating in global businesses, major corporates, SMEs and privately owned businesses; people who have challenges that are unique to their role, but who also face challenges that are common to every sales force. One of these is generating incremental income: new business that can be described as unplanned or not targeted , but that can significantly impact on sales performance.
I have always been impressed by sales leaders who are aware of what incremental income can do for performance. These are leaders who ask the question, 'What could be?' Equally, seeking incremental income is often a necessity if sales plans fail to deliver forecasted business levels.
Recently I met with a Sales Director who was wrestling with how to improve sales because of a shortfall in performance. He had settled on a plan in which his 28 sales people had been tasked with identifying ten prospects; the aim was that each sales person would open two new accounts producing average annual sales of £30,000. Multiply that by 28 sales people and, in theory, that will generate £840k of income.
This enthusiasm was impressive, but for a number of reasons I had doubts over how successful the campaign would be. The most important being the capability of the Account Managers to win new business.
The results were unsurprising: the team had done what was asked (identified the prospects and began working with them), but sales were nowhere near the original £840k projection.
The challenge is to answer the question, 'How do we improve sales?', and the simple answer is: generate new business. Here are three ideas you might want to try with your teams:
1. Promotion Accounts: In every portfolio of accounts there are what can be described as ‘Promotion Accounts’. Such accounts may already be of high value, but there is also an opportunity to do significantly more business with them. Take an account that delivers £100k per annum. If that is their maximum spend on products and services then you have the business. However, if the account spends £100k with you and £900k with competitors, there is an incremental business opportunity for you to take.
‘Promotion Accounts’ are accounts where you can increase sales. However, if you have a 10% share of a customer’s business and you keep doing the same things, you are guaranteed to continue having a 10% share.
Asking Why: Do you get 10% because the customer’s buying policy is to spread business across several suppliers? Does the customer have a ‘special’ relationship with a competitor? Alternatively, would it make sense to establish the reason why you get 10%? You have to know the answers to these questions before you can start working on ‘Promotion Accounts’.
Change: How can you change your approach to make the customer want to do more business with you? Do you need to speak with different people within the account, change the business proposition you offer, improve service levels or even test a different sales person?
If you want to generate incremental business then it is usually easier to sell to people you already do business with. However, if you don’t change your approach to ‘Promotion Accounts’ then you will continue to produce the same results.
2. New Business: Some people will argue that new business development is the responsibility of a ‘specialist’. Others will argue that every account manager and sales person should be responsible for winning new accounts.
Regardless of the approach you take, new accounts are key to generating additional business, but you must:
Focus on markets and sectors where opportunity exists. Develop the knowledge that positions your people as experts that customers want to work with. Too often I see prospect lists which feature targets that are simply names. Any prospect should be a business that you can help to achieve objectives and meet their needs.
Define Targets. Make sure you are working with prospects that will turn into long-term, profitable customers.
Sell appointments: E-mail, telephone or letter - the first contact is about selling a prospect the idea of meeting you. Make sure your team know how!
Create a New Business Process: Starting with ‘Initial Contact’ and ending with a ‘Live Date’, what are the steps that your sales people must implement to open a new account? If the names on a prospect list are not changing, you do not have a new business process; you have a list of names that will never deliver further income.
Coach: There is no point creating a New Business Process unless you are prepared to coach the team on the skills and behaviours needed to implement it.
3. New Thinking: Managers do things right, leaders do the right things. Would a change of approach, service offering, or product benefits open up incremental business streams?
There is no formula here; this is about sales leaders testing new thinking and breaking unwritten rules. It may mean:
- Moving from a transactional to a consultative sales approach
- Restructuring the sales force to align the account management proposition with the needs of customers
- Using different delivery channels to provide better customer service
- Reformulating products and services so that they appeal to new markets
‘Promotion Accounts’, New Business and New Thinking are three opportunities for new business that you can start exploring to improve sales performance.
Brett Lyons is the Managing Director of TLSA International. His time is spent working with clients to develop world class sales leadership, account management and sales functions that deliver outstanding and sustainable business performance.
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