Surviving a Tough Economy

Sales managers have to learn to adjust to hard times. Constant vigilance and ongoing demand analysis will sort the winners from the losers.

It’s tough out there and getting tougher. Research shows that the overall number of businesses in South Africa has diminished across most sectors. This is particularly apparent at the smaller end of the spectrum, where companies have merged, been taken over or shut down completely.

Demand analysis

However, there is still a market out there. It’s a matter of finding where it is. Needs analysis plays a huge role in helping sales managers to ensure that scarce resources are channelled towards the right opportunities.

Sales managers have to achieve targets with fewer resources. This requires a reevaluation of the entire sales environment and all sales functions. They have to work through each and every metric to ensure the realisation of potential from each customer, and to create a plan for what must happen if those potential levels are not met.

These circumstances require a return to the fundamentals of planning. The first thing to do, if you have not done so already, is a swot analysis that looks at the business and the environment in which you operate. It’s a critical exercise as this information will be at the core of all future decisions.

It will enable you to align all the operations within your organisation to what the market dictates you are capable of providing and the share of the market you are able to acquire. In turbulent times it’s more important than ever to work out specific potential relative to each business or client within the target market.

Sales team structure

In a tough market you simply have to reduce sales costs and improve productivity. To achieve that, you have to rightsize the sales organisation and structure your sales team relative to the market and the market potential you are aiming to realise. Rightsizing takes into consideration the entire structure of the sales team, including head count, compensation, travel and route planning, as well as marketing costs.

Head count has to be determined by target market potential and should be resized according to activities that need to be carried out. If you have 40 outlets that need to be called on, work out the number of calls that need to be made every day, and the size of the sales team required to achieve that. You might also consider resizing the sales team according to functions.

One approach is to shrink the sales team, and get telesales to make more of the regular calls so that they can take the load off the remaining team. This helps to create a more cost-effective environment. Generally, sales teams are structured according to geographical territories or customer types. Some sales managers like to assign accounts according to personalities.

It’s an approach that I have always found to work very well, particularly if someone in the salesteam has had a longstanding personal relationship with the client. It also means more in-depth assessment and evaluation of your team, as well as retraining, up-skilling and maybe even acquiring different talent.

Strategic selling

Sales managers also have to look at ways to add value through a more consultative selling approach so that you are not in a position where everything is negotiated on price. Do that, and you will find that strategic
value is what sways the sale, not just straightforward tactical selling.

Make sure your pricing policy is clearly stated. In today’s climate, when maintaining the gross profit margin is crucial, any deviation, discounting or unauthorised deals should be discouraged or even penalised.

Measurement and targets

Productivity benchmarking must be introduced and agreed to. Make sure the goals are achievable and measurable and that your team has a say in determining them. Benchmarking should always include an evaluation component which provides something definitive for them to be measured against. You will need to have the correct compensation plan and incentives to retain top people – and drive the right behaviour – because you really do not want to lose them now.

Communication

Your communication strategy may have to be revisited, simply because constant contact with clients and potential clients keeps you uppermost in their minds. To remain the preferred supplier, you have to ensure that you implement a communication strategy that correlates with the client’s potential spend so that you maximise your return on customer relationship management.

You cannot simply beat the sales person down if they are not bringing in the numbers. It’s wiser to uncover why you are not getting the business you expected from those clients and then apply the necessary resources to get there.