Sales Poppers A Blog On Sales Effectiveness The Eight Biggest Mistakes Executives Make With Sales Part 2 Ask any CEO about the top priority for growing their business and you will likely get the same answer: Sales. In spite of the focus on top-line results, very little attention is paid to sales as a process – people still claim sales is an art, not a science. The topic remains largely under-represented in business schools and even more so in small and mid-sized companies. In addition to neglecting the sales discipline as a trainable, repeatable process, there are several other mistakes executives make when creating and managing sales forces. In this eight-part blog series, we are discussing these mistakes and the strategies you can employ to avoid them. In this second of eight parts, we look at the mistake of ignoring warning signs. Sales problems tend to creep in over time, particularly in sales forces where there is significant turnover. Ignoring the warning signs can result in accepting poor sales performance — and that has a devastating effect on the entire company. Mistake #2 — Ignoring the Warning Signs Many executives believe that sales is such an art, and the truly gifted salespeople such artists, that they shouldn’t over-scrutinize what happens in the sales department. There is the mistaken impression by many in the corner office that sales either happen or they don’t. That it is impossible to understand all the intricacies of the sale. That approach is a recipe for disaster. Even the best salespeople occasionally get stuck. Chief executives and sales leaders ignore clear warning signs at their own peril. These warning signs indicate a problem, either with an individual salesperson or with the overall process. It is critical to your company’s development to address these warning signs instead of ignoring them. Nine times out of ten, a warning sign will point to a breakdown in sales process or sales execution. One of the first warning signs, and one that is all too common in the sales world, is a sales forecast that doesn’t accurately predict wins or the timing of the wins. The forecast should tie directly to the sales process, so if you are following an effective process, the forecast should be an effective tool. It is also an indicator of whether the salespeople are controlling the sale; know where the sale is in the cycle; and whether that salesperson’s opportunities are getting “stuck.” Too many forecasts are based on what has been done, instead of what we know about the opportunity. There are complex algorithms for calculating probabilities, and formulas for divining timelines – all based on us doing a four-hour demonstration or responding to a request for information. Instead, we should base our forecasts on: 1) what we know about the opportunity; 2) where we are in the sales process. When forecasts go bad, it is because we are forecasting opportunities that have no basis in the real world or because we are predicting closure based on our timeline instead of on the client’s timeline. The first problem indicates a deficiency with our team and their approach to qualification. The second problem indicates a lack of aligning the sales process with the forecasting process. Another warning sign is a sale that is lost at the last minute. This frequently indicates that the sale (or the client) is controlling the salesperson, not the other way around. Sales get lost at the last minute because a salesperson gets blind-sided. This usually happens because they haven’t adequately mitigated the risk and get caught up in the client’s emotional or political struggles at the end of the sale. Other reasons may be that they don’t have the connections or relationships inside the client organization to get enough information to navigate the political environment. A warning sign that spells disaster for your operational team is working on opportunities you can’t win. In today’s selling environment, staff from operations and even R&D are often involved in the sales process. Working on opportunities you can’t win strains resource and builds resentment for your sales team among other departments. If your salespeople aren’t qualifying opportunities properly, your entire company will pay the price. There are reasons why you may work on an opportunity that you can’t win – either a promise of future business, or just as practice for your sales team. But you have to understand this going in and modify your use of internal resource appropriately. The rest of the time, your salespeople should know why they have a chance to win and how they are going to win. If they can’t articulate these things, you shouldn’t support them with other resource. Another warning sign that many CEO’s and CSO’s ignore is not knowing why you lost. Some of the most valuable information your sales team can generate is the cause and effect of wins and losses. If your sales team has no clue why they lost, then they were never in the fight to begin with. But just as important as the losses are the wins – and this information is much easier to get. Why are customers selecting you and is it changing over time? Not being able to answer this question definitively (as opposed to speculatively) is a sure sign that your team is not controlling the sale. One final warning sign—and perhaps the most important one—that executives ignore to their detriment is out-of-control salespeople (OOCS). The manifestations of the OOCS include: Clients not returning phone calls No access to power Working for free New requirements pop up late in the buying process Not knowing when opportunities will close “Quote and hope” proposals Ineffective team selling Dashing to the demo Little white lies Inability to describe progress (“The meeting went great.”) Out-of-control salespeople have either lost or never developed the ability to be proactive and to dictate the terms of the sale. They are reactionary and believe that their job is to do anything the client tells them to do. These salespeople will lead your company into the death spiral of ineffectiveness if you don’t do something about it. You can either create a sales process for them, train them how to navigate the sale, or replace them. If you allow their ineffectiveness to become commonplace, you will pay the price. The key is to pay attention to the warning signs and act on them. All of these problems can be corrected, but it takes discipline and a plan. Ignore the warning signs and your company will not achieve its potential. For older blog entries, you can read our entire blog here.