Sales leadership serves a dual purpose: growing both company revenue and customer loyalty through positive perception.
We suggest that new revenue growth should be obtained from both existing customers and new customers. Positive customer perception allows a company to better retain existing customers, and when positive perception is at play, a business is better able to introduce new products and innovations. Greater market share brings increased value to both the customer and supplier.
When the notion of value is centered on quality, service, and professional relationships, price is less important. But when price is the first conversation, the company and products are simply commodities.
Pivot Your Sales Strategy
Developing new customers is an expensive and challenging task. Our client sales teams, which solicit new customers, generally report sales closure rates of around 10%. That means that only one out of 10 customers solicited eventually purchase in a B2B environment.
Second is the challenge of cost of sale in developing new business. Sales investment expenses continue to climb, and the cost of travel and developing customer relationships has a dramatic impact on new customer investment.
We recommend pivoting the sales strategy to first penetrate existing customers with new products and innovations. Penetrating existing customers generally offers sales closure rates of 30-40%. The caveat? The requirement of positive customer trust and perception. When quality, service, and relationships are challenged, the closure rate drops dramatically.
Retaining and penetrating existing customers should be a primary component of your sales strategy. These accounts generally offer greater results with less investment expenses.
But what if your current customer base lacks the ability to purchase more? The second component of the sales strategy is to acquire new customers. The challenge is to select and prospect the right customers.
Soliciting all customers with the potential to purchase is not the answer. Sales leadership should be highly selective regarding the “who” and “where” when sales employees work to solicit new potential customers. This requires a sales strategy based on the development of sustainable, quality customers.
First, define what criteria determine a top account. Size, volume, demographic location, distribution range, and credit rating are a few key factors. Next, determine the top accounts’ ability to recognize the value that a quality supplier delivers with each transaction.
A potential customer who does not value quality, service, and professional relationships is probably not a top account candidate. We label these customers “commodity-driven customers.”
Working with a commodity-driven customer base comes with long-term consequences. Your company becomes a commodity supplier, with price as the first driver. These customers will drive down your value, and generally, there is no floor for price concessions and lower margins. Accepting customers like this is a choice for sales management.
We recommend companies take an aggressive sales approach. First, sales employees should be required to identify 50-75 top accounts they call their own. Sales employees are responsible for capturing all relevant contact information regarding these accounts. This moves sales employees out of their comfort zones and into uncharted waters.
These top accounts become the salesperson’s first priority. The objective is to first understand the customer’s business and build a sales relationship. During this discovery process, sales employees determine purchasing criteria, innovation needs, and real potential. If the potential is not there, or it’s revealed that the account does not meet the top account requirements, that customer comes off the list.
We always find it amazing how much new business our clients find within close geographic proximity. Sales revenue increases, as does a growing customer base.
Create a Positive Company Culture
If we were to survey customers and assess sales employees in relation to overall company perception, what would we find? Are quality, service, professional relationships, and 100% order fulfillment top of mind for your organization? What silos and boundaries are involved?
Sales employees play a key role in transmitting company culture to customers. When sales employees see sales management as dysfunctional, they transmit this perception to the customer. The result? Eroded customer trust and fewer orders. In these situations, sales employee retention is low.
In a dysfunctional company environment, every dollar of customer attrition must be replaced with new business to meet sales plans. This is the main reason enterprises fail to reach their sales plan objectives. Customer attrition outpaces organic growth.
Bring About Effective Sales Leadership
“Leadership is the capacity to translate vision into reality.” – Warren Bennis
When was the last time your leadership team reviewed its company vision, mission, and core values? Is there clear evidence that the company and its employees are living and communicating these values?
Effective leadership is objective-based. All employees are held equally responsible for achieving plan objectives. Task-based organizations are simply pursuing activities. They sound good and look good — and fail to accomplish assigned objectives.
We find that organizational strategy is sometimes task-based as well. Company strategy and tactics are confused and intermixed. Effective leadership, strategies, and tactics should align perfectly with the vision, mission, and core values of the company.
High-performance companies measure perception through both employees and customers. 360 Organizational Assessments and 360 Customer Surveys can identify transparent challenges.
The key is to utilize “actionable” assessments and surveys in order to determine the real facts about the company. Information that is filed away, never to be seen again, sends a message of leadership dysfunction.
Actionable assessment and survey information allows leadership to improve deficiencies. Consistent, smaller course corrections improve perception, while big, unpredictable course corrections invite customer and employee scrutiny.
Effective sales leadership will consistently deliver real competitive advantage, with customer loyalty and employee satisfaction becoming the benchmarks of financial success.