Tag Archives: Revenue

How Do You Accelerate the Progress of a New Sales Person? Four Pieces of Advice

Situation: A CEO recently hired a new sales person. To date, this individual has signed some good customers, but is struggling to generated sales. How patient should the CEO be with this person? How much time should be allowed to demonstrate performance? What metrics do others use to assess and incentivize sales performance?
Advice from the CEOs:
• Set 90 day targets that you expect for the individual to reach: X new accounts, Y in sales revenue, other measures as appropriate to your business. Set these targets WITH the individual, not FOR them so that the individual has ownership of the targets. Monitor the individual’s progress frequently. If the trend is below the target, ask what the individual plans to do to meet or exceed the target. Targets are best set at the time of hiring. If the individual cannot approach these numbers then it’s better to cut sooner rather than later.
• How do you differentiate the sales person from the sales talker? Set firm targets and expect to see results quickly.
• The traits that correlate with success are not traits that that salespeople develop after they are hired. They have to demonstrate these from the beginning. The hiring process must select for these traits.
• There are a number of companies that offering tool that will help identify whether candidates for a sales position possess the traits that your company deems most important. Among these is TTI – Target Training International – www.ttisi.com and Sandler Sales – www.sandler.com.

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What New Business Options Should You Pursue? Five Guidelines

Situation: The CEO of a company observes that the business climate has been uncertain, but she hopes that it will improve soon. This will open up new options for her company. As these start to develop how do you decide what to do and what not to do? What new business options should you pursue?
Advice from the CEOs:
• Talk to your customers. What do they value about your current product or service and what is less valuable? Build on opportunities that customers value. What options are most consistent with the company’s strength and focus?
• Consider a customer survey – either online like Survey Monkey or by telephone. If there isn’t in-house expertise to design and administer a survey, look for knowledgeable outside resources. Assure that the survey questions will drive understanding of the company’s focus and potential.
• Get an expert to review the survey and administration plan. Before launching the survey to your full customer base, test it with a select group of customers. This will tell you whether it will produce usable information. If it doesn’t, revise the survey.
• Which opportunities will build sustainable recurring revenue vs. opportunistic or one-time revenue? Recurring revenue can be lower margin if the income stream is sustainable. Balance efficiency and utilization. For example, fixed fee service contracts that renew consistently.
• Judge opportunities against your “Hedgehog” as defined by Jim Collins in his book Good to Great: What you are passionate about? What you can be best at in your marketplace? What you can measure by a single economic ratio?

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How Do You Jump-Start Sales in the New Year? Four Points

Situation: A CEO has been working with his team to jump-start sales to set the company on a positive growth path. His team has come up with some interesting ideas. He would like to hear from others as to what they have done to set their companies up for a year of positive growth. How do you jump-start sales in the new year?
Advice from the CEOs:
• Set up a focused, manageable revenue target list of 30-100 existing and desirable new clients. Focus sales efforts on these clients. This is much more effective than a shotgun approach.
• Touch-up and refresh the target list on a consistent basis. Create and lay out a schedule of contacts by email, telephone or meetings and stick to it.
• Schedule regular meetings with the team to share successes and insights gained from their efforts. Compliment this by awarding points and recognition for the best contributions to the meetings. Rather than deciding on the awards yourself, have the team vote on the best contributions. This will increase the camaraderie of the team and will encourage them to support each other
• Develop a focused network to link to former colleagues. For example, if you’ve worked at other companies join or create an alumni group for those individuals on Linked-in. This can develop unexpected new opportunities.

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How Do You Establish Sales Accountability? Three Approaches

Situation: Several CEOs have experienced difficulty establishing accountability within their sales teams. Sone sales reps consistently come up with excuses for not generating new accounts or meeting their sales objectives. The impact of lost sales had significant effects on revenue performance. How do you establish sales accountability?
Advice from the CEOs:
• It is vital to understand who are the best customers and most profitable products and services for those customers. Establish regular sales meetings to discuss customers, products and services, to identify promising sales opportunities and to coordinate sales efforts.
• Work with both sales management and individual team members to determine desired outcomes:
 Set sales targets – work with the team to establish firm expectations on reasonable and achievable sales targets. Agree on a tracking system to measure progress toward those targets. Encourage members of the team to work together to achieve the targets.
 Customer type – who are they, what are their priorities and expectations, and how can the company best address these.
 Product(s) – work with the team to determine which products best fit each customer type and develop creative ways to position those products to increase sales.
• Establish measurable behaviors which if done will result in success. For example:
 Calls per week and results of those calls.
 Relationships with key decision makers and development of additional relationships within existing and potential customers.
 Thorough qualification before quoting, presenting, demo, and so on. The who, what and why that connects with successful sales..

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Why Do We Keep Trying to Grow? Three Thoughts

Situation: A CEO is looking at the strategic plan of her company. They are planning for growth but a question arises – what is the balance between work for the sake of the work and work for the reward that it brings? What are the thoughts of the other CEOs around the table? Why do we keep trying to grow?
Advice from the CEOs:
• Step back and ask – what do I seek? Do the same with the members of the leadership team – what do we seek?
• Define what you want and what enough is. There is always the question of whether when reaching the goal will it be enough? Work with your team to discuss and seek a consensus on what their objectives are both for themselves and the company. You may be surprised at what this discussion yields. Two books may help you to deal with this question: The Gap by Dan Sullivan which deals with growth, motivation and satisfaction and Small Giants by Bo Burlingame of Inc Magazine which tells the story of a number of companies that decided that growth is defined by the impact that they have on their employees and communities as opposed to growth in revenue or profits.
• Repeat this discussion with the team at least annually. Expectations develop and change over time. An annual review of plans and opportunities empowers the team to make interesting and valuable contributions.

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How Do You Make Sales “Farmers” More like “Hunters”? Three Approaches

Situation: A CEO finds that his sales team are relationship managers who are excellent at growing business in existing customers, but not as skilled at either developing new business opportunities with current customers or bringing in new customers. In sales parlance, they are more like “farmers” than “hunters”. To meet revenue goals, the company needs additional business. How do you make sales “farmers” more like “hunters”?
Advice from the CEOs:
• When working with the team be sure to considering what’s in it for them, not what’s in it for you. Communicate with and coach them so that they are inspired to try and adopt new behavior that will help them in their jobs.
• Create a low pressure script for your relationship managers. Build this around easy questions that they can ask both current and prospective clients:
 How are we doing?
 What are your most pressing needs?
 What more could we do for you?
 Can you see other ways that our services could benefit you?
 We have a new offering. May I tell you about it?
 Do you know other companies that can utilize our product or service?
• For training, pair the relationship managers in teams of their choosing. Have them rehearse and coach each other. As they learn or develop new techniques, have them coach the rest of the team.

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How Do You Balance Competitive and Collegial Behavior Within The Team? Three Points

Situation: A CEO has built a company which is very collegial. She is interested in adding an element of friendly competition within the company. Would it be destructive to add an aspect of competition to the mix? How do you balance competitive and collegial behavior within the team?

Advice from the CEOs:

  • This can be achieved by focusing on recognition, and encouraging recognition of each other among the team members.
  • One example is to have traveling trophies.
    • One trophy could be circulated on a periodic basis based on measurable criteria. Examples include new client acquisition, increases in revenue, or increases in savings by improving processes. There are many positive achievements that can be recognized.
    • A second trophy could be awarded for “assists”. Examples include one team member helping another to land new accounts, a team of employees developing a cost-saving improvement to process, and developing a new accounting technique that saves the company money.
    • A third trophy could be awarded to one team member for a job well done, and then awarded by that member to another member for another job well done, and so on.
  • To add to the collegiality, some of the trophies can be passed around spontaneously for on-the-spot recognition. Others can be awarded on a scheduled basis such as annual or quarterly employee or company meetings. Mix it up and be sure to make it fun!

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How Do You Unlock Your True Profitability with Sound Cash-Flow Trade-offs? Six Points

Situation: A CEO has her company on a positive growth track. The company has a solid customer base. Their products and accompanying services are increasingly well-accepted. She is ready to take the company to the next level of growth and profitability. How do you unlock your true profitability with sound cash-flow tradeoffs?

Advice from the CEOs:

  • Profit is different from cash flow. Make this distinction clear and act to boost cash flow.
  • Tracking Cash & Forecasting:
    • Watch the company’s bank balance. Frequently track cash inflows and outflows by period.
    • Carefully assess and project the pattern of customer buying habits and payment performance to develop sound revenue assumptions.
    • Compare the company’s margin dollars and billings with norms for peer group businesses.
  • Issues to consider in forecasting:
    • Hiring means commitment of future cash outlays. Consider contingent work force options.
    • Project and plan for future large payments (equipment, technology, marketing, loans, etc.)
    • Differentiate between investing in ongoing business capacity as opposed to incremental add-ons.
    • Look at cyclical trends and issues. Understand your customers’ purchase habits and patterns.
    • Develop likely “what if” scenarios (good and bad) and develop plans to reduce the impact of surprises.
    • Analyze the company’s business model and determine exactly how cash flows through the company’s operations.
  • Analyze important upcoming decisions: hiring equals investment; outsourcing equals expense. Evaluate needed support for each.
    • Differentiate investment versus outsourcing decisions. Smooth cash flow through selective outsourcing – especially when dealing with sudden or cyclical peaks. Avoid the risk of committing long-term resources by staffing up to address short-term peaks.
  • Focus on the opportunity cost of money. Add this focus to both planning and assessment.
    • Operate with a mix of other peoples’ money and ownership funds. The latter are more expensive than bank interest because the trade-off is what you could earn through alternate investments.
  • Fine-tune the company’s planning tools. Analyze budget and cash implications of alternate plans through detailed budget projections and follow-up by tracking cash expenditures.
    • Use Cash Flow Statements to analyze and project trends in investments, operations and financing and how each of these affects cash balances.

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How Do You Negotiate the Purchase of a Franchise? Seven Points

Situation: An experienced CEO is considering the purchase of a franchise. What are the key points to consider in both evaluating the opportunity and in negotiating the purchase? What advice should be sought? How do you negotiate the purchase of a franchise?

Advice from the CEOs:

  • Most franchises have a set contract in use by all of their franchisees.
    • Ask for the names of existing franchisees and ask them what works or doesn’t work both about their contract and the services provided by the franchisor.
    • Ask the franchisor whether they will agree to a side letter to cover areas of importance outside of the franchise agreement.
  • What services and are offered by the franchisor as basic infrastructure and what are offered as a percent of sales or other fee arrangements?
  • Look closely at the frequency and amount of franchise fees. What fees are set or variable? What is non-negotiable?
  • Is there a need for a professional to represent you as the buyer?
  • Closely inspect the prospectus financials – franchisors in many states are required to provide these to prospective buyers. What is the initial investment? Are there monthly or periodic minimums to be paid by the franchisee? What are typical monthly operating costs.
    • Add to these your salary replacement costs – assuming that you will have to pay yourself something over the break-even period.
    • Calculate the monthly revenue needed to break even, and to pay off the initial investment.
  • Evaluate the competitive situation facing the product/services offered by the franchise. Network with others in the market to assess both the market potential and any barriers that that will be faced as the franchise is established.
  • What other questions should be asked?
    • Why is this business interesting?
    • What is your experience and what is the experience of the franchisor?
    • How well do you understand the market that the franchise will be serving?
    • What does the franchisor bring to the table that you cannot do yourself? What are the comparable costs?
    • What is the anticipated rate of return? How is it being calculated? Can this be verified with third parties?
    • What criteria are deal makers and which are deal breakers?

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How Do You Manage Seasonal Gaps in Project Flow? Five Options

Situation: A company experiences seasonal gaps in project flow. This makes it difficult to project both cash flow and staffing needs into the future. In addition, monthly cash flow tends to be uneven. What can they do to improve control of internal and external resources in this environment? How do you manage seasonal gaps in project flow?

Advice from the CEOs:

  • The company currently focuses 60% on consulting and 40% on internal projects, some of which produce future projects. Relative proportions shift over time, and projects can be cancelled.
  • Try to write the company’s contracts to push revenue to early stages of a project, so that there is more cash cushion to help ride out short cash periods.
  • Look for options to change the business model to increase financial flexibility.
    • If there are significant margin differentials between different types of projects this has overhead implications when resources are shifted.
    • Look for ways to allocate less expensive resources or virtual resources with a lower cost to lower margin projects. Look for opportunities to utilize remote resources if these resources cost less.
  • Adjust staff assignments to maximize payoff, as well as staff retention options. Look for project work opportunities.
  • Analyze and evaluate the ability to switch personnel between paying projects and internal development projects.

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