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Creating and Maintaining a Successful Sales Organization

Sales Organization

When building a top-performing sales organization, it’s easy to say, “Surround yourself with the right people, and the results will take care of themselves.” While it is true you’ll need competent, motivated performers working together to construct the foundations of sales success, there are other critical factors to nail down – sooner than later!

So, what are some essential building blocks to include in your sales organization blueprint? Here are the cornerstones:

Cornerstone #1: Understanding the Importance of a Sales Department

While arguments can be made for the importance of every department in a business, the bottom line is this: without sales, there is no revenue; and without revenue, there IS no business! Certainly, then, the importance of a sales department cannot be understated. But being a revenue linchpin in the company also brings great responsibility – to get things right, make things work, and to perform as a team to maximize sales.

Do your sales leaders, managers, and frontline reps feel the weight of this reality? If not, performance and sales results may falter regardless of how strongly the other cornerstones are constructed.

Cornerstone #2: Establishing the Principles of Your Sales Organization

Before you can seek to define and execute sales organization structure best practices, it is critical to establish the guiding principles of your sales organization. This can (and should) include alignment with the company’s overarching values, vision, and mission. Never forget that your sales teams are the frontline ambassadors for your brand. Regardless of what your company’s marketing collateral says about its ideals, your sales reps can reinforce that foundation or make it crumble in their day-to-day interactions.

When communicating your principles internally, be sure to emphasize teamwork and respect. Even one disruptive outlier in your organization can cause frustration, disharmony, and chaos. Consider using a team-oriented mantra and ensure each team member embodies its spirit daily and with each customer interface.

 

Cornerstone #3: Building the Structure of Your Sales Organization for Maximum Performance

Just as a building’s strength depends on proper materials and construction, it is just as critical that your sales department’s organizational structure be well-designed and built to withstand forces, both external and internal. While your people are perhaps the most vital components – impacting culture, morale, sales results, and revenue – even the most competent sales performers cannot thrive in a poorly designed work environment.

So, make sure your sales department organizational structure makes sense with properly aligned responsibilities and territories that are matched to the skills of your sales team members.

Cornerstone #4: Using Metrics and Accountability to Drive Motivation and Results

Even the most functional sales structure is not sustainable if sales reps are not equipped to succeed, are adequately motivated, and are held accountable to maximize results. Of course, this starts by letting them know what is expected of them. Establish reasonable “stretch” goals and use appropriate key performance indicators, or KPIs, to measure progress and success. When possible, KPIs for the sales department should include leading and lagging indicators; this will help your team make necessary corrections in real-time to maximize employee performance.

Of course, performance accountability is essential to sustainable success. By identifying weak points in your sales department’s organizational structure, you can shore up deficiencies by delivering additional training, implementing new resources, and changing territories and responsibilities to match individual strengths. If necessary (usually as a last resort), you can always replace poor performers with new sales talent.

The Bottom Line:

A well-designed, carefully constructed and effectively managed sales organization can help your company improve decision-making, enhance sales team performance, and boost revenue and profit. Your sales organization’s blueprint should start with the cornerstones noted here, but there are many critical details and dimensions to be laid out as well.

As a fractional sales leader serving as an Outsourced Chief Sales Officer, I can help you establish sales organization structure best practices and draft a blueprint for sustainable sales success. Email me at abrummer@salesxceleration.com or call me at (425) 686-5911 today to learn more.

Contributed by Anton Brummer

Afraid of Sales Automation? Don’t Be.  Here’s Why…

Sales Automation

A recent article described how Artificial Intelligence (AI) is changing the future of sales. Simply put, AI uses the simulation of human-like intelligence, including patterns of thought and predictable action, via software to predictively simplify, enhance, and automate many segments of the sales process. A key word in this description is “automate,” which brings us to sales automation. Sound scary? It shouldn’t. Automation in sales and marketing can dramatically enhance the sales process while freeing sales reps to do what they do best: build relationships with engaged buyers! Here’s a closer look at sales automation and how to use it to forge a revenue-boosting competitive advantage: 

What Sales is Automation?
Often used in tandem with sales-focused AI and a Customer Relationship Management (CRM) system, sales automation can be defined this way:
Sales automation uses software to reduce, eliminate, streamline, or manage time-consuming, repetitive sales tasks. Automating portions of the sales process (such as pipeline management, lead generation, email marketing, routine communications, and follow-ups) empowers sales teams to nurture leads and focus on converting prospects to customers.

What Sales Automation IS NOT
Sales automation is not a cure-all for subpar products or services, nor anemic strategies or sales processes. Most importantly, sales automation is NOT a replacement for sales reps. While sales automation can make repetitive, impersonal sales tasks more efficient, it cannot provide the human touch necessary to build rapport and nurture longer-term business relationships. In fact, by streamlining many parts of the sales process, sales automation can free up sales reps to spend more time engaging with higher-quality prospects and customers.

The Benefits of Sales Automation
Beyond automating repetitive tasks, automation in sales and marketing can help sales organizations reap significant big-picture benefits. These include:
• Generating more revenue (and isn’t that what sales is all about?)
• Reducing costs
• Increasing ROI
• Boosting customer satisfaction
• Saving time and repurposing energy toward high-priority sales functions

These benefits can materialize when you design and implement sales automation – again, in tandem with your CRM and AI efforts – to accomplish these goals:
• Generate and nurture leads with higher conversion potential
• Automatically place interested prospects into the pipeline
• Use intelligent lead scoring to qualify and prioritize prospects
• Use more robust data (including AI-driven data sets) for more innovative KPI-based forecasting, as well as more responsive decisions and sales process enhancements
• Better sales pipeline management
• Personalize the customer experience and fluidly guide the buyer’s journey
• More closely align marketing efforts with the sales process
• Enhance customer communications with relevant and timely messaging, including follow-ups and recommendations
• Automate time-consuming, non-productive, peripheral tasks that take the salesperson away from selling

How to Use Sales Automation as a Competitive Advantage
If you are afraid of the very concept of automation in sales and marketing, chances are your competitors share that trepidation. But when you forge ahead and embrace sales automation as a strategic and tactical part of your sales operation, you can leave slower adopters in your dust!  Also, by integrating your sales automation with your CRM system, you’ll outperform competitors by streamlining your sales operation for greater efficiency and higher conversion rates.  Finally, because sales automation can help your team stay in touch and engage with customers, satisfaction and loyalty can improve, making it much harder for your competitors to poach your client base.

Is Sales Automation in Your Future?
The answer to this question is simple: It better be – if you want to stay competitive and be more responsive to customer needs and expectations. Your sales team will also appreciate how sales automation makes their jobs easier, helping them focus on the right prospects for higher conversion rates.

Contributed by Anton Brummer

Protecting Value with the Right Planning Partners

Teamwork

Your business is your most important asset, and you deserve advisors committed to delivering the right advice, the best solutions and the expertise to execute the planning to protect your business value.

The first step to protecting the value of your business is to understand what it is worth in relation to everything else you own (Left Pie Chart) and then what is at risk without good planning (Right Pie Chart). Knowing the value of your business helps you make better decisions. Start by getting a valuation of your business. Today’s technology allows for basic valuations to be completed with speed and accuracy at an affordable cost.

Once you know the value of your business you will need a team of advisors. No Business Value Protection Planning can be effective and completed without Financial Professionals, Attorneys and CPA’s working together for the benefit of you the business owner. Unfortunately, this job is not getting done for the majority of small and mid-sized businesses. This puts 60% to 80% of business value and income at risk.

70% of Small and Mid-Sized Businesses have an incomplete succession plan or none at all. How can this be?

Sole Proprietors can get by with a Single Advisor in most cases. Their business model simple and straightforward. Large Private and Public Companies have access to Full-Service Consulting Firms with the needed team members already in place. The majority of businesses fall in the middle and it is easy to understand why studies have revealed a majority of business owners are not sure about where to begin because there is not an existing team in place. You need a team of advisors. It important to identify those with the skills required and willing to work together rather than independently. Your existing trusted advisors should be able to help you get started.

So how will you know if you have the right team in place? There are three indicators to help you.

Clarity – Communication – Confidence

Clarity – When you have clarity about the value protection planning areas and the role each advisor plays then you are on the right track. The protection areas include Succession, Retirement, Estate and Key Stakeholder Planning. It is the responsibility of your advisors to bring clarity to you. If you are not clear, then they have not done their job.

Communication – Require your advisors to communicate effectively with you and with each other. It is their job to make this a priority and the only way the planning done will be coordinated and complete.

Confidence – When you look at the team assembled to do the work for you, and you have a sense of confidence then you are on the right track. Hoping it works out is not a strategy. Confidence comes when the team combines clarity and effective communication.

Benefits of Partnership Thinking

Your planning team working in partnership will hold each other accountable. This is a huge benefit to you. The planning solutions designed are vetted by your Attorney, CPA, Financial Advisor and others. In partnership they deliver complete solutions. Embrace the partnership approach to planning. Make it a requirement for your advisors to embrace working in partnership with each other. Advisors work best together when committed to a common goal or objective. Require them to focus on the objective of protecting the value of your business, your most important asset. It must be the central theme at all times. This saves you time, money and eliminates much of the frustration associated with planning.

If nothing else, remember the message from the pie charts to keep everyone focused on completing the protection planning process.

Contributed by Doug Marshall

Planning on Selling Your Business? Think Again…

Selling Your Business

Everyone’s heard about how Baby Boomer business owners will be retiring and the wave of business successions/exits that will occur as a result of those retirements. But there’s a problem that almost no one is discussing. Our research clearly shows that there aren’t enough buyers for all those businesses. Here’s why and what you can do about it.

The SBA reports that there are roughly 6,000,000 small employers in the U.S. Of those 6 million businesses, approximately 3,600,000 are owned by Baby Boomers and about 2,400,000 are owned by GenX’ers. Based on the US Census population statistics, this means about 4.5% of Boomers own a business and about 3.0% of GenX’ers own a business. Human nature being what it is, we expect the percentage of GenX’ers who want to own a business to also rise to 4.5% as they get older. None of that is especially surprising – until you think about it a bit more. And then it becomes alarming. It becomes alarming because that rise in GenX owners from 3.0% to 4.5% represents only 1/3 of the Boomer businesses that will be for sale.

The result is that 2/3 of all Boomer businesses won’t find an individual buyer!

But what about strategic acquisition and private equity money? There’s lots of money looking for a home, right?

There are always companies looking to acquire or merge with businesses that complement or expand their core business. After all, the acquisition is considered “strategic” because it expands their market share, affords economies of scale, or adds products and services that dovetail with or complete their current offerings. But only the most profitable, highest regarded, or fastest growing businesses will be strong candidates for a strategic acquisition at full market value. The reality is (and always has been) that most companies will not be good candidates for strategic acquisition.

When it comes to private equity, pretty much all private equity investors are looking for opportunities with high profit growth potential. And as we know, most businesses are more about steady growth and consistent profits. They just don’t pencil out for that big, private equity payday.

Historically, between M&A deals and Private Equity deals, only about 15-25% actually close. Even if we’re optimistic and assume 25% of the available businesses can attract private equity money or a strategic buyer, it leaves a full 50% of Boomer businesses without a buyer or acquirer! (75% of the 2/3 noted above)

If owners REALLY want to sell their company to an outsider, they should work with an experienced M&A Advisor, Investment Banker, or Business Broker. It will maximize their chances of getting sold. In addition, they should get preliminary Quality of Earnings and Quality of Leadership reports done. These reports will highlight any weaknesses that need to be addressed before going to market, thereby increasing their chances of attracting a buyer and closing a deal. 

So, where does that leave owners who can’t find a buyer or attract money?
Here are the five options open to them:

“FIRE SALE” ACQUISITION
Businesses whose profitability and growth are weak or who aren’t quite a perfect fit for an acquiring company may still be candidates for acquisition. The problem, however, is that they won’t be able to command their full market value. Because they’re not as attractive to a strategic buyer and because there will be so many businesses on the market, the only incentive to complete a deal will be to lower their asking price – sometime significantly.

FIND A SUCCESSOR
One of the better options for many businesses will be to recruit and develop a successor, and then sell the company to them at full price. Some banks may be willing to fund a portion of the buyout, but the majority of internal sales will be paid (in part or in full) out of future cash flow. Consequently, it is critical to find a successor as soon as possible and ensure they are well-prepared to be an effective leader and a successful owner. It generally requires one to two years of development to hone someone’s leadership capabilities, their strategic thinking, and their judgment. Without that development, you run the risk of the business not being able to make those buyout payments.

KEEP THE BUSINESS
A variation of selling to a successor is to bring on a successor to run the company but not sell the stock. This option allows the owner to draw out the business’ value from the company while still owning it, but without needing to run it on a day-to-day basis. It requires finding and developing a strong successor, and then rewarding him or her for good performance.

CREATE AN ESOP
In the absence of a strong successor, an option that will also yield full market value is to set up an Employee Stock Ownership Plan (ESOP). This approach can increase employee loyalty and productivity, ensure business continuity, and gain some tax advantages. An ESOP can be effective, but it requires one or two years of planning, along with the training and development of the people who will be directing the organization. But it can be expensive to establish an ESOP and is therefore not a practical option for most companies.

CLOSE THE BUSINESS
If a business can’t find an individual buyer, is not a candidate for acquisition, has no successor and isn’t able to structure an ESOP, the only course of action will be to close the business and sell off the assets. Obviously, this is the least desirable outcome. The owner will receive pennies on the dollar and the livelihood of all the employees and their families will come to an end.

We believe all too many businesses will be facing this stark reality if they don’t put plans in place at least two to three years in advance of retirement.

THE BOTTOM LINE
The bottom line is that if your businesses isn’t in high demand and you’d like to sell it for a reasonably strong price, the best course of action is generally going to be to recruit and develop a strong successor.

If you’d like help recruiting, assessing, and/or developing a successor for your business, please contact us. It’s what we specialize in. www.ElicitingExcellence.com

Contributed by Michael Beck

Institutionalized Customers – The True Value of Your Business

Institutionalized Customers

The impact of the term “Institutionalized” as it pertains to your customers impacts the predictability of future revenue into your business. Ultimately, institutionalized customers or lack thereof are a crucial factor in the valuation of your business, its ability to secure needed financing and alleviate the pressure if what might otherwise be very risky financial decisions.

Institutionalized customers bring the revenue your company can forecast with great accuracy. They’re the customers you don’t so much sell repeatedly, rather do business with to the benefit of each other and, most likely, your industry. Institutionalized customers do not make a move in the part of their business concerning your company without obtaining your company’s advice or counsel. They are the customers who know the whole story about your business in the way of your faults, struggles, and strategy. You seek their advice before you make a change in direction or add capacity or capability. Most businesses have institutionalized customers. All of us in business wish we had more of them.

If you happen to be in the majority of those businesses which does have institutionalized customers, but wishes it had more, or if you’re realizing by reading this your business doesn’t really have any, the following are steps which can be taken to create the kinds of customers being described.

State the Mission – If the plan is to create the kind of customers which increase the value of the business, everyone in the business must understand this is an on-purpose strategy.

Take Responsibility for Your Client Relationships – In businesses with a sales or a business development team, it is the responsibility of the individuals on that team to target and bring new business to the organization no matter the scale. What is the expectation of how these customers will be dealt with inside your organization? Will the single point of contact be the person who brought the business to your company? If so, institutionalization of this customer will likely not happen as most if not all of the client communication will be through this single point of contact. What’s also not likely to happen is a continued relationship with this client should your business development person leave your organization.

To develop institutionalized customers your customer must be exposed to several points of contact in your organization, including you. The more exposure a customer has to the people in your business, the more that customer feels a part of your business. You become less of a vendor, rather a group of people with common business goals. Your customers will begin to develop valuable relationships with the employees of their choosing, sometimes in the most unlikely of your employees.

Imagine secondary contacts being the sole reason some customers do business over and over with your company. Certainly, customer service representatives are logical touch points for your clients, however, delivery people, technical staff, and accounting staff can also become highly valued by your customers.

Develop a Sales Culture – There’s an old adage “everyone is a salesperson.” I suppose this pertains to trying to instill in the company culture the understanding amongst employees who are not apparently part of the sales team that they do, ultimately, impact revenue. Or, in more general terms, which is the most likely scenario, we all have an agenda and being good at articulating can be personally and professionally beneficial.

Institutionalizing customers requires much more. It requires everyone in the organization to include your customers as a valuable part of your business. It also requires you to empower your people to proactively welcome and develop their professional relationships with your customers. Some employees will not be capable of adapting to this culture. If this is to the detriment of institutionalizing your customers, the employees will likely not weather the transition.

Educate Your Business Development People – Paradoxically, amongst those who will most need to align with the sales culture in your organization will be your business development staff. In large part, salespeople don’t share well when it comes to who they perceive to be “their” customers. Expect a great deal of discomfort and push-back from business development staff when you tell them your vision for a sales culture in the organization. Those who sell tend to view customers possessively and as their long-term marketability. in most organizations, they are not wrong as it’s likely your business development people have always been held accountable for the company’s customer relationships, along with operating in a fairly autonomous manner.

The acceptance by sales/business development of this new culture will show up as added support to the sales/business development department. This will ultimately free up a great deal of selling time which will be focused on key customers (account management), accounts which should be bringing more business to your organization (farming) and, of course, filling the opportunity pipeline with new business (hunting, consultative selling and closing).

Regular Reviews – As in all things, inspecting what you expect is crucial to aligning development of a new strategy. As a part of each employee review, include examples of successes, areas for growth as it fits specific customers and individuals within your customers’ organizations.

Further refining of job descriptions and expectations as it pertains to your company sales culture are to be included. Examples of KPIs (key performance indicators) might be, examples where each employee can sight as having had a positive impact on customer relationships, unique information each employee may have about key customers like hobbies, birthdays and family information, and particulars about your company’s specific performance-related nuances as they apply to specific customers.

Enlist Your Customers – Invite your customers into your company’s endeavors and ventures. Create focus groups and user groups when implementing new technology, capability and workflow experimentation. It’s likely added capability, if focused on ahead-of-the-curve initiatives, is market-driven. In this case, the opportunity to align with customers through their participation in your process will shorten your organization’s ramp-up to proficiency and create stronger relationships with your customers for them having been important contributors.

Again, an example of this is, having been a part of a forward thinking commercial printer, my company was the regional market leader in the leap from analog to electronic prepress capability. This had the potential of falling flat. What made the difference between success and failure was the selection of key clients, who were early adopters themselves in this area, to join with us in our suffering through what would be a steep learning curve wrought with mistakes, frustrations and massive production delays. The endeavor was a huge success and, depending on who you ask, a lot of fun. What cannot be denied is that the by-product of becoming proficient was the creation of completely institutionalized customers for whom great struggles would be in store should they attempt this new workflow elsewhere. The customers built the platform!

Thin the herd – Reality is you’ll never institutionalize all of your customers. In fact, there may only be a handful of customers who, after all of this culture change, are those you could truly say are institutionalized and fewer still who will admit to it! When considering a conscious effort toward institutionalizing customers, realize most companies revenues can follow the 80 / 20 rule meaning 80% of your revenue comes from 20% of your clients. Applying focus in the proper areas can keep your organization on track.

Institutionalizing your customers takes effort, so begin in the obvious place, which is with your top 20%. These are the customers who, if aligned properly will be the basis for changing your company culture. When pursuing new customers, target those organizations which have like qualities in the highest impact areas.

Next, take a good hard look at the 80%. Ask who in that group should be bringing a greater amount of business and what might it take to move them into the same realm as the top 20% and then into what you can called institutionalized. Make a plan for these clients by name. Make that plan public throughout your organization. Set goals. Be accountable.

Finally, there are and will always be customers who don’t fit into the two above categories. If this business is profitable and is well-aligned, maintain that business under the guidelines of your newly developed sales culture and serve them as well as possible. For those who remain, it’s probably time to admit the relationship is not a very good fit for either company and part ways as friendly and professionally as possible.

Obviously, all of the elements of creating institutionalized customers are not here. Your vendor relationships as they pertain to your customers is one element which is an entire project on it’s own. However, there is enough here for you to ask, “What if it doesn’t work?” To which I’d ask, “What if it does?”

If it does work, we can begin to imagine in multiples when it’s time to start thinking about implementing the exit strategy. If it doesn’t work, I suspect creating this culture in your business pays off quite nicely in increased revenue, customer profitability, and lowered cost of sale, along with my wild guess that running your business will be much more fun and satisfying.

Contributed by Dave Mantel

Sales Diversification – A Key to Higher Business Value

Higher Value

 

A key to higher business value is to avoid a concentration of customers and of markets.  John Lee shares why in this video:

Contributed by John Lee

Maximize the VALUE of your company—reduce RISK!

Business Value

With the Investment Sales Analysis (ISA) tool, I evaluate and rate 16 critical sales drivers under four categories, including: Sales Infrastructure, Sales Process, Sales Support and Sales Organizational Systems. I then can partner with owners and investors to create and execute an actionable sales plan that positions a company increased sustainable growth.

Contributed by John Lee

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