There was an amusing moment recently when I sat in on a board meeting at a young start up company.
After all the discussions around the business proposition and how to leverage a recent launch event it suddenly became clear to everyone around the table that they actually had to start selling.
There was a lot of looking around at each other and the room fell silent.
I could almost hear the tumble weed blowing across...
The truth is that for start-ups and any small business - everyone does "sales".
Labels: sales, start-ups
Although I didn't realise it at the time, I took
my first "consulting" role over 10 years ago when I joined
a company to turnaround declining revenues within their service
division.
What I thought was simply a sales management role
was actually a challenging change management project as I had to
increase revenues through transforming the structure of both the team
and the service proposition.
The first thing I did when I started was really
dig into the figures to see what was happening. Whilst everyone I
spoke with thought that the problem was simply down to poor sales
performance, in fact it actually due to the fundamental structure of
the division and it's service offering.
Without going into the details, the service
division was structured in such a way that it's people were
compensated contrary to increasing revenue. Plus, instead of working
in conjunction with the capital equipment division (which had
traditionally sold the equipment maintained by the service division)
they had completely opposed sales structures leading to new equipment
being sold that was actually serviced by another company at a cheaper
price than their own service division.
Believe me, you could not make it up.
Once this was realised, the changes I put in place
quickly reversed revenues which had been declining for over 5 years.
Over the next 3 years, in a company that was
struggling and constantly striving for performance gains post-MBO, I found myself
sat around the boardroom with the CEO looking at other "projects"
to generate sales growth and revenue improvement. The common theme was that these were all projects
which aimed to unlock hidden revenue within the business.
Handing them to the Sales Director or one of their
team wouldn't work. Either they were too close to the issue or they
simply couldn't afford to turn their attention from hitting sales
targets. What the CEO needed was a business consultant. In
a larger corporate it would have been a business analyst or someone
in the CEO's strategy team. But this was a 250 employee SME... so it
was me.
Often the projects ran across different divisions,
and required a more holistic approach unencumbered by company
politics.
Examples of where hidden revenue can be found
within a business include:
cross division offerings - you can
unlock significant revenue opportunities by combining service
offerings from two autonomous business units. One company I worked
with had separate consumable and equipment divisions who never
combined their offerings because of internal structures, leaving
money on the table which their competitors exploited.
It's true that the problems of silo's usually
occur within larger businesses (both the examples and the original
company I mentioned were companies with between 220-500 employees)
but there are also examples of hidden revenue within smaller
businesses, which include:
Not exploiting all opportunities within
existing accounts - do you know which customers are part of
larger groups? Are you in contact with all potential buyers within
the same account? For example, if you sell training services and you
only deal with HR what happens if the Sales Director buys a training
programme elsewhere? Are you sure you will always be asked? Most decisions in larger companies involve more than one person, often 4 or 5; are you in contact with all of them? Do you even know them all?
Not catching up with dormant accounts
- if you're a project based business, are you keeping up with every
account? If your contacts move on, are you following them, and are
you in front of their replacement? This is a common problem for
business owners who are focused on delivery and let accounts go
cold. It's not your customer's responsibility to tell you; it's no
good moaning that old so-and-so never called you - you need to call
them (or at least get one of your business development team to give
them a regular nudge).
Consider everything within you business as an
asset. That's your people, your existing customers, your lapsed
customers, your prospect database, your accounts history...
everything. Ask yourself, are you really leveraging every asset in
your business?
If you look a little deeper, and often with a
fresh, outsider's perspective, you may find that significant revenue
opportunities are right in front of you.
Labels: business development, business development consultancy, sales consultancy, sales consultants
Posted by: David Regler @ As many business owners are thinking about their sales and marketing plans for 2012, I looked back at a post I made at this time 2 years ago (see
Do you have a sustainable model to generate new business?) and wondered whether I should just re-post it.
Back then, looking at the tough market conditions facing service companies, I asked the question "Is this just a passing phase... or is this "business as usual" for
the next few years?"
Anyone who's been watching the slow-mo train wreck of the Eurozone will surely now be thinking it's the latter.
Chatting with a client yesterday who runs a consulting firm, he summed the mood up by saying that it's going to take at least another 3 years before things get better.
Well, he is an optimist after all :-)
With analysts saying that Europe's facing a lost decade of growth you could be forgiven for thinking that it's all over, but let's not confuse macroeconomics with your own business.
You see, to me, even if there's no growth at a GDP level that doesn't mean there has to be no growth for your business. In fact, revenue growth for your business really has little to do with GDP growth and more to do with how you run your own sales and marketing efforts.
Sure, the current market conditions are tough for many but, and this is my point,
you'd just better get used to it.
Back in 2008 when we were all thinking it would be a short sharp recession, cutting back and putting things on hold was a sensible approach. Then when it all bounces back you can put your foot back on the pedal, right?
But, for many business owners today, there is no more room to cut back. Cut back and you don't have a business anymore. In fact, do nothing and you won't have a business anymore.
You need to stake your claim and find a way to grow.
And I mean grow... not just survive.
Of course, you need to be realistic, which is why I say you need an austerity plan for growth.
Which may sound contradictory but what I mean is you need a plan to grow your business during these times of austerity. But there is still business out there. Sure, it's tougher to win and you need to do more for less, etc. Those things haven't changed, in fact they've just become baked in.
But, let me repeat,
there's still business there.
And now's the time to find a way of winning it.
Beat your competition, innovate your marketing. Be creative, because it's at this time that the strongest businesses will grow.
As a final passing thought, here's 2 books I'd recommend reading at this time:
Fortune at the Bottom of the Pyramid and
Blue Ocean Strategy
Re-thinking your business model, partnering with clients (and suppliers) in new, sustainable ways and re-shaping your proposition are all ways to see a huge potential for growth in the current crisis.
Labels: b2b marketing, business development, new business development, strategy
