In a situation where sales and profits are going down, it is essential to have a glimpse of what is happening within the sales process. Low sales mean that the issues root from the start of the sale process, and to get a first approach to the problem, a sale analysis tool should be used. As a new sales manager of a company whose sales and profits have decreased for the last two years, I would first get the first approach to the situation using a Customer Relationship Management (CRM) tool such as HubSpot or Salesforce CRM software. They are CRM software that offers a full sales, marketing, and customer service platform. Through the tools, I would determine several things concerning the sales process within the organization and how the salespeople have been carrying out the process.
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At the beginning of my sales analysis journey, I would use the tool to look at various metrics. Firstly, I would analyze the win rates. They are the percentage of deals that close in a sales process. I would analyze each salesperson, where they closed the sale, and the customers’ products. Besides, I would also check which countries made the most sales and which ones made the least number of sales. Through this analysis, I will identify whether sales are decreasing due to low win rates or not.
The second metric I would analyze is the average deal size. This refers to the average revenue per sale. It is a crucial metric in determining what amount of revenue a sale brings into the company. The ultimate goal of selling is to generate revenue. If the revenue is below the average, then I would analyze how the sale of that product is driven. Another metric is the average time a successful deal takes to close. There is an average time that a deal must take to be successful in the sales process. This means that if a deal takes less time than the average time, it might not be successful. Similarly, if a deal takes longer than expected, it might also fail. However, it depends on the client and the type of product being sold. The tool would help me analyze whether the salespeople utilize the required amount of time to close the deals.
I would also use the tool to determine the number of deals each salesperson has in their pipeline. This includes the number of deals in progress at any one time. Low sales or profits could be caused by salespeople having many progressing deals in their pipeline, making them ineffective in dealing with customers. They could have a lot of workloads, which would limit their effectiveness. Thus, to measure this metric, I would use the CRM tool. There are many metrics I would measure using the tool besides the discussed metrics. Others include; sales forecast accuracy, lead response time, time spent selling, follow-up time, calls made, emails sent, and leads generated. Through such information, I will be able to determine the causes of the decreasing sales and profits and the way forward.
Analyzing the previous results should help me pinpoint the major areas for improvement. Through the CRM tool, I should understand the areas that need to be rectified to increase sales and profits. The ultimate goal of the analysis is to determine where the sales process is going wrong and take actions to improve. In this case, there are several actions I would take to help increase the sales and profits of the company.
The first action I would take is to advise the company to invest in advertising. Advertising is one of the major ways of increasing sales (Belk 2017, p.37). It involves promoting the products and services through a medium. The analysis could show that people are not familiar with the company’s products. Hence, when the salespeople approach them, the prospects doubt them because they have not heard of the products before. Advertising could help first familiarize the products, making the salespeople’s work easier. I would recommend online advertising for this particular case because the target audience is global. The company deals with international customers, thus online would be convenient and efficient.
The second action is to revise the pricing of the products. The analysis could show that the salespeople generate many leads, but very few of them are closed. This could mean that there are a lot of prospects that are potential customers, but the pricing of the product drives them away. Perhaps the pricing strategy is wrong, or the prices are high. In any case, the sales and profits of the company could be affected. For this case, since the company deals with international customers, I would recommend incorporating discounts and freebies. This would help attract a large pool of customers and motivate them to purchase the products (Kukar-Kinney, Scheinbaum and Schaefers 2016, p.692). For example, if a salesperson offers a 20% discount, the prospect is likely to accept the offer rather than purchase the same product at a higher price elsewhere. Thus, discounts and freebies could help the company increase sales and profits.
Another vital action is to work on the sales team. The salespeople need the motivation to continue working smart (Khusainova et al. 2018, p.2). They need to be appreciated and inspired because the role comes with many challenges. They are the most vital elements in the sales process because they influence the prospect into purchasing a product. The analysis could show that salespeople lack the motivation to carry out their duties effectively. For example, the salary might not match the work they do. In that case, they could feel unmotivated to work, affecting sales and profits. I would recommend investing in the sales team by improving their salaries, giving them benefits such as health and hardship allowances, and offering incentives and bonuses after successfully completing a sale. Through that, they will work hard and smart to achieve the targets, which will drive growth in sales and profits.
A sales business is not about products only, even if a company deals with mere products. Customer service is also a prerequisite to retaining customers and making more sales. The reason the salespeople have more leads but few closes could be their customer service techniques. Besides, based on a study, poor customer service and follow-up could also affect retaining customers (Paul, Mittal and Srivastav 2016, p.606). During the sales process, salespeople set customers’ expectations high by making tall promises about the benefits and features of the product to lure them into buying. It is a good marketing technique to make more sales and win the prospects’ pockets.
However, it could be detrimental when the prospect buys the product, and the salesperson fails to provide effective customer care even after making a sale. The customer already has high expectations about the product; hence, if the salesperson fails to follow up on the customer to show them the product’s benefits, they might lose the customer. For example, the product could be having some malfunctions that were unforeseen during the sales process. The salesperson is supposed to follow up with the customer to ensure maximum customer service. By that, the customer is likely to be retained or refer other people, making more sales and profits.
Organizing the SalesForce
The sales force is like a system; people cannot work effectively if they are disorganized. To enable a company’s growth, the sales manager must direct and organize their sales force. There are different types of salespeople; some might prefer to work as a team while some might prefer as individuals. Also, some are hunters while some are farmers. It, therefore, remains the task of the sales manager to plan and organize them, each in their own field. Organizing the sales force can be done in different ways. Mainly, a sales force is organized depending on the product line, region, customer, size, market sector, and sometimes their skills and knowledge, which I would also use to organize its sales force. I would do this in several ways.
Firstly, since the company deals with different countries and would like to grow in the regions, I would choose a regional sales force. The company has already given ten customers to each salesperson, but it has not given them based on region. To ensure that each region is represented, I would allocate some salespeople to different regions. However, this depends on some factors such as their interest and knowledge towards the region. People who know a particular country would work in those countries to ease the sales process.
Secondly, I would structure the sales force to provide maximum country coverage. For instance, if a salesperson works in China as his country, I would divide the country into different regions to make it easier for the salesperson to cover the whole of China. It means that I would also have to add more salespeople if maximum coverage is to be realized. For example, China has different provinces; to ensure the products reach every area, I would allocate about five salespeople and divide the provinces so that each person has a few regions to cover. This would allow each person to concentrate on their territories, making the sales process robust and increasing chances of making more sales.
Thirdly, I would appoint several sales representatives to oversee the strong and important territories. There are strong territories that might require a strong sales force. For example, territory or country with many prospects results in many sales is strong. Such areas need to have sales representatives who preside over the salespeople. With that, the representatives will oversee other salespeople and ensure that the sales process is effective enough to guard the region.
Also, the skills and knowledge of salespeople will play a crucial role in organizing the sales force. Those with high knowledge of certain products will be placed in specific areas where the products are marketable. Besides, they will be placed in strong regions to help guard them. Besides, I will ensure that each salesperson has the basic and necessary knowledge and skills to carry out the sales process. Sales and profits might still decrease without the skills despite any other effort. This would lead to offering pieces of training to the team to enhance their knowledge. Since the sales and marketing industry is prone to change, training could help them refresh and gain new trending skills.
Lastly, I would establish a management structure for the team. No matter the size of the team, a sales manager is required. Since the company has only ten salespeople, I would be the sales manager and delegate all the management duties. It would include ensuring they are comfortable with their job, directing them on what to do, ensuring they have enough resources and ensuring the sales process is in accordance with the organization’s goals. However, as the sales team grows, I would appoint several junior supervisors to oversee the team. It is crucial in ensuring the sales force is organized and working as expected.
The focus of Efforts and Resources
As a sales manager, my role is to oversee the whole sales and marketing department. Sales managers are tasked with ensuring everything within their department is in good condition, prompting them to be all around. However, there are some key areas that they should focus their efforts and resources more than others. Such areas generate the highest income and are considered valuable for the growth of a company.
One of the areas is coaching the salespeople. According to Carroll (2016, n.p), salespeople are the most crucial elements of a sales process, and the sales managers should account for about 50% of their time coaching them. Without the effort of the salespeople, nothing will be sold. It means that the company might not make any sales or profit. The coaching should focus on administrative, situational, and strategic conversations. As a sales manager, I have more skills and knowledge, and I am more experienced than my Salesforce. Thus, I need to take the initiative to coach and motivate them into what they are supposed to do to make more sales. When they are coached, salespeople become more confident and comfortable to take risks which could result in big deals and clients. Also, they develop important skills such as effective customer service. Thus, coaching is the number area I should focus my efforts and resources.
The second area is measuring the performance or accountability of my sales team. Without performance, there are no sales, thus, no profits (Tabassum, Kaleem and Nazir 2015, p.22). Even though I coach and motivate them, I will be doing nothing if they are not working or fulfilling their duties. The second thing after coaching them is to ensure that they perform their duties accordingly, and I should do this by measuring their performances and accountability. I can do this by setting some key performance indicators to reveal how each person is taking accountability. For example, I could check the number of appointments they are making daily, the quality of how they handle the appointments, the number of calls made, and the number of deals they close a month. Such indicators would show if a salesperson is accountable or not. Hence, I will be needed to focus my efforts and resources because I have to evaluate each person’s performance and, in some cases, highlight areas of improvement and offer advice.
The last two areas are crisis management and internal company issues. I would focus on handling issues brought by clients and salespeople because the sales process must be smooth to yield fruits. For example, there are cases that my sales force cannot handle on their own. In that case, my input is crucial, and setting some time to handle such issues is vital. For this, I would account for about 5% of my time. Also, some internal company issues affect the sales process. For example, I might be needed in marketing or financing meetings. In that case, I must avail myself because it also affects my department. Financial matters are crucial and worth my time because the sales force needs money to travel, and I also need money to transact every activity. That would also account for about 5% of my time as a sales manager.
Belk, R., 2017. Qualitative Research in Advertising. Journal of Advertising, 46(1), pp.36-47.
Carroll, M., 2016. 10 Activities Sales Managers Should Focus On. [online] Intelligentconversations.com. Available at: <http://www.intelligentconversations.com/blog/ceo-sales-guide/10-activities-sales-managers-should-focus-on> [Accessed 3 February 2022].
Khusainova, R., de Jong, A., Lee, N., Marshall, G. and Rudd, J., 2018. (Re) defining salesperson motivation: current status, main challenges, and research directions. Journal of Personal Selling & Sales Management, 38(1), pp.2-29.
Kukar-Kinney, M., Scheinbaum, A. and Schaefers, T., 2016. Compulsive buying in online daily deal settings: An investigation of motivations and contextual elements. Journal of Business Research, 69(2), pp.691-699.
Paul, J., Mittal, A. and Srivastav, G., 2016. Impact of service quality on customer satisfaction in private and public sector banks. International Journal of Bank Marketing, 34(5), pp.606-622.
Tabassum, N., Kaleem, A. and Nazir, M., 2015. Real Earnings Management and Future Performance. Global Business Review, 16(1), pp.21-34.