25 May 2006

Develop a sales culture

In any economy, the key to building a competitive organization is to develop an effective sales culture within the organization. And at the heart of this culture are clearly defined sales systems. These systems help generate higher close rates. They also help develop stronger customer relationships that lead to better returns on marketing investments through repeat purchases.

Developing a sales culture requires investments in recruitment and training, lead management systems, sales processes and improved compensation for sales people. As Malaysian firms, GLC’s and other institutions struggle to find systems and strategies that will allow them to compete and stay profitable, integrating a sales system into daily business practice is becoming mission critical. But few firms seem to grasp the importance of creating a great sales organization, and few Malaysian firms have become effective at sales.

It is not enough to have great sales people. What is required for success is a great sales organization with the systems, processes, training and incentives to build sales, brands and relationships with customers.

Too many companies manage sales as a series of "events", not as an integrated sales effort. As a result, sales suffer. Some executives even turn their noses up at the mention of sales systems. They prefer simply to cut prices day after day. This discount culture may spike sales in the short term. But in the long term, it hurts profitability, and is a fast track to a corporate graveyard.

Over the last twenty years or so, sales development was not an organizational priority. This was generally due to demand in most sectors that outstripped supply. But over the next 10 years, as Malaysia prepares herself for the giant leap into the ranks of developed nations, the ability to sell products and/or services with be critical to the success of this transition.

However, today's fast changing marketplace, typified by a growth in competition and more knowledgeable consumers, has created an opportunity for organizations that can build sustainable and distinctive value for clients. In fact, this is at the heart of brand building. One of the best ways to capitalize on this opportunity is to achieve excellence at sales. Indeed, for many industries, the sales force often represents the first ‘moment of truth’ between a customer and a brand. In other words, often the long-term success of the brand lies in the hands of the sales force.

Once a company has made a commitment to having a great sales organization, the next step is to build a strong sales force. Recruitment is critical. Companies must recruit the right people for sales, and not simply look for bodies to fill positions. This applies to every industry but in particular, to the automotive, retail and property sectors.

Inevitably, poor hiring processes hurt sales. Recently, I spent a weekend looking at luxury cars in a Bangsar shopping mall. When I asked a ‘salesman’ how long a warranty was, he didn’t know. He didn’t ask any questions and was relieved when I asked for a brochure. Passenger car sales are down more than 11% year on year, and remain soft.

At a recent international property fair, I had poorly photocopied price lists of apartments thrust into my hand at every booth. Qualification was non-existent. The sales process consisted of handing out brochures and offering free microwaves as an incentive to buy. Little wonder 50% of new property launches remain unsold. Similar examples are common in the retail sector.

Executives must concentrate on hiring and training staff that are not only knowledgeable about products but also skilled at selling. Just because someone has 25 years banking experience doesn’t mean they are going to be able to sell financial services. Long term, the right hiring decisions can drastically reduce a company’s investment in recruitment, training and coaching. It also means a more productive sales force. A word of advice: if your organization relies on sales managers to hire sales executives and results are still poor, give the interviewing responsibilities to the sales manager’s manager.

Recruiting the right people for sales is tough. In a recent survey, 48% of CEOs interviewed reported difficulty in recruiting and maintaining quality employees in sales and marketing. If your organization doesn’t have the skills required to identify the unique qualities required in a successful sales person and/or train them effectively, outsource these responsibilities to specialists.
Once recruited, new staffs have to be trained. Sales executives who have completed an intensive sales skills intensive training program show increases in productivity ranging from 35% to 1665%. Yet, an estimated 70% of companies provide no sales skills development at all.

No matter what size an organization is, a well-defined, effective lead management system is critical to long- term profitability. In a nutshell, a lead management system focuses on marketing, qualification, segmentation, intelligence and and other information and interaction concerning customers. It addresses marketing measurement and prospect identification. Lead management is a fundamental business process. It is not a campaign. It should be integrated into everything a company does.

The benefits of a lead management system include optimizing sales force strengths and, most important, providing accountability in sales activities from forecasting to pipeline management to customer conversion. It provides focus and accountability for the selling effort.

A clearly defined sales process must be a fundamental part of the sales culture. Key to ensuring sales processes lead to increased sales is a sales process manual. A sales process manual both outlines the steps needed to initiate, facilitate, complete and monitor successful sales, as well as provide a one-stop resource for sales support. Sales is not magic. Every selling situation has a definable, step-by-step process which, when executed correctly, will, more often than not, lead to a sale, either to a new or existing customer. Any organization without a sales process manual is only handicapping itself in the never-ending battle to grow the business.

Sales staff must be remunerated correctly and effectively. How sales staffs are paid has a significant impact on their behavior and performance. Astonishingly, there are many companies that do not pay sales staff a commission or bonus for successful sales! Even fewer companies pay a commission for repeat business. That hurts long-term growth since a sales person has a 50% chance of selling to an existing customer but only a 5 – 15% chance of selling to a new customer. A well-defined remuneration package also provides incentives to professionally sell more often and to the right targets.

Not everyone can be a high-performance seller over the long term. Circumstances change. A person's personality and experience may no longer fit the type of selling that he/she is being asked to do so the sales process manual must include ongoing training or mentoring programmes to help identify potential issues before they arise. .
Now is the time for companies to take steps to build a more productive sales culture. Those firms that increase investments in sales, including lead management systems, improved sales processes and increased training, companies will grow faster, and more profitably and will be able to compete more profitably with local and global competitors.

Marcus Osborne is MD of FusionBrand, an international brand consultancy headquartered in Kuala Lumpur. He can be contacted at marcus@fusionbrand.com