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Business health in good order? |
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Published in the November 2005 Inside View Newsletter. Free business development health check - Details |
They read your watch and tell you the time. Consultants certainly do this. It is a valuable service because we get too bound up in our own operations and lose the ability to read our own watch! In the next several paragraphs I will share the parameters we examine to answer the question, ‘Is this sales and marketing operation in good order?’ You may be responsible for an entire business, a division, department, or only your own sales territory. You can still make use of this list to read your own watch. 1. How the top six customer questions are answered. Customers don’t always ask all of these questions out loud or in a direct manner however; all six questions are entirely obvious. I won’t list them here because it will be better for you to recognise them for yourself. When you have listed the top customer questions, ask yourself or your organisation how it answers each one. If you get inconsistent or unconvincing answers, you have uncovered a way to improve your public face and increase your sales. 2. How well your market or industry is understood We use a simple questionnaire to assess market or industry understanding. Many people will have a superficial understanding of a market or industry. Here are six simple questions from our questionnaire that you can use as a test:
In many cases these questions are difficult to answer. It may be necessary to put some arbitrary constraints on how you consider the question for instance, selected geography or vertical markets. Those who know or can make an accurate guess; have a good understanding of a market or industry. Those who don’t would benefit from knowing the answers. Confidence in ones understanding communicates itself to customers in many subtle ways. 3. How well your customers and prospects are understood Those who can answer the questions in No. 2 in relation to their top customers markets, demonstrate a high level of customer understanding. The proportion of staff with account responsibilities, who can give good answers to these questions, provides an indication of a sales team’s health in this respect. 4. How well your value contribution is understood and articulated. If a high proportion of customer facing staff can convincingly express the bottom line business value of your products or services, then your team is in good order. Pose this question informally, to a representative set of people and assess your organisations comparative health for communicating value. 5. How well your marketing activities are integrated Are your marketing and sales objectives integrated? Are they interdependent or can marketing staff succeed independently and sales people achieve targets regardless of marketing effectiveness. If either circumstance is true, in times of difficulty one or both sides will blame the other. Over time, having disconnected objectives drives a wedge between sales and marketing that undermines effectiveness. 6. How efficiently your marketing generates results Once again, we use a questionnaire to assess and quantify marketing effectiveness. Extensive customer surveys aren’t necessary to gauge lead generation, enquiries, and brand recognition. Efficient collection of data provides the required answers. Having a clear strategy, achieving good execution, measuring results, and acting on the feedback obtained will lead to efficient marketing practices. These things are easy to examine with a spot check. 7. How well you identify and qualify prospects Choosing the right things to work on has a major impact on efficiency. What steps do you take to ensure you only work on sales opportunities that are real, that you can win, and which will be worthwhile? These three questions spawn a series of sub questions that form a check list. If a pilot were to dispense with the aircraft safety checklist before taking to the skies, you might be reluctant to be a passenger. Create your own checklist, then use it as a reality check and prompt. 8. How well you manage your sales pipeline
It is relatively easy to
calculate how many leads you need to reach any particular sales target. Take the
average sales value. Divide it into the target. Multiply the result by your lead
to sale conversion ratio. Once you take the measurements and keep track of the
results, you can predict sales pipeline problems in time to take action. For a
fuller explanation, see 9. How well sales skills, habits, and practices measure up to requirements Measuring this is more difficult. To begin you will need a sales competency model that defines the necessary skills, habits, and practices. Larger organisations may already have such models for use in appraisals and staff development. To help with this, we use a gap assessment tool that is self calibrating. If you don’t already have something suitable, you will need to create or acquire one. 10. How well your sales processes are understood and leveraged The first question to ask is, ‘what are our sales processes?’ You may have different ways to sell different products or services. The process steps will be generally consistent whether or not you have defined them. It may be that different individuals or teams use different processes to achieve a sale. If the steps taken to achieve sales are not defined or understood, their effectiveness can’t be measured. Measurement offers the opportunity of leveraging what works well and improving what doesn’t. 11. How well resources are deployed Whether you are operating as an individual or managing a team, it is vital to maximise effort where it can yield the best results. For sales and marketing operations, resources are mostly people with specialist skills, both inside and outside the organisation. Effective deployment of resources requires an in-depth understanding of the answers to many of the questions above. If a sales target can be likened to a military objective, then the writings of wisdom in such matters have much to teach us. The words of Sun Tzu echo. “The reason that some generals win more battles and surpass the achievements of others is that they know critical information in advance”. 12. The overall efficiency of your sales and marketing operation To calculate overall efficiency, we favour expressing the cost of sales as a % of revenue or profit. Taking into account all sales expenses, you can obtain an expenses to revenue or expenses to profit ratio. If you don’t already measure this ratio, you should find that your accounts include a history of the numbers. If you track the trends, you will know if your operation is getting more or less efficient. In our full health check, we break this down to identify how specific sales habits and practices are contributing to the result. Now you have a model for conducting your own comprehensive health check. Normally the exercise reveals many opportunities for improvement. In our experience, it is well worth the effort. If you think this is important and don’t have the resources to carry it out, paying a consultant to read your watch and tell you the time will be a worthwhile investment. Article by Clive Miller
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