<< . .

. 14
( : 28)



. . >>

whom you sell and what you sell them, where you sell, and what you sell
profitably and what you don™t. It™s now possible to keep track of these
statistics in real time, which allows you to keep better track of inventory.
However, you still need to set aside time to determine what these num-
bers mean in terms of marketing and sales activities.

In addition, you should conduct monthly meetings, quarterly sales strat-
egy planning retreats, and annual meetings with most of the management
122 Build Long-Term Growth



staff to discuss the implications of the sales numbers. Discuss changes
you want to make to the product line as a whole from information you
get from the sales figures. Use the annual meeting to identify customers
you most want to retain and those that are not profitable.

At my company, we found the best way to discourage unprofitable cus-
tomers was to raise prices. We often used the quarterly meetings to dis-
cuss the performance of the sales staff and their compensation. Sales
compensation always raises an array of issues: whether you™re paying too
much or too little, whether enough or too little of the compensation is
based on commission, and whether you™re incentivizing your sales staff
correctly to make the right kind of sales. We tried a variety of methods,
some with better success than others, but always found we needed to tie
compensation to profitability.



COMMUNICATING SALES DATA TO EMPLOYEES

Sales dollars are the customers™ way of expressing appreciation for what
your company does. It™s important to share information about overall
company sales by product line with all employees.

I believe it™s your employees™ right to know how they™re performing;
furthermore, they can often find ways to improve sales and profitabil-
ity when they know the score. Company success is typically measured
on sales volume or on sales volume increases. It™s a point of pride for
most employees to know and share their company™s annual revenue.
Whereas many employees don™t understand profitability or are skepti-
cal of its accurate measurement, sales volume is a number to which
most can easily relate.




The goal of your sales and customer service programs is clear: Get
the initial sale and keep the customer coming back for your product
or service. Here are ways to ensure you meet this goal:

• Get and keep the best employees you can, employees who
enjoy working with people and solving their problems, and
who aren™t easily deterred from their mission. Do your best to
keep these employees happy and help educate other employees
on their vital roles.
123
Mastering the Art of the Sale




• Get out and meet your best customers yourself. Put yourself in
the customers™ shoes as often as possible and don™t rationalize
problems with your product or service.

• Learn to appreciate”and, when possible, act on”customer
feedback.

• Celebrate sales increases with all employees. It™s the goal of
your company and a real opportunity for employees to take
pride that the increase in sales represents their efforts to pro-
duce something of value for your customers.




TOOLS FOR MASTERING THE ART OF THE SALE

The worksheets and exercises at the end of this chapter will help you
take a real look at your sales and measure your success in customer ser-
vice. These worksheets include:

• Dollar sales month-to-month.

• Product sales by customer.

• Top-selling products.

• Sales by salesperson.

• Customer service key indicators.

• Customer service survey.

• Sales report to employees.

Work on your sales and customer service effort until you can answer yes
to all of these questions:

• Are you satisfied with your revenue growth?

• Are all of your products profitable? Do you need to renegotiate
with some of your customers?

• Can you identify customers or groups of customers whose busi-
ness is not profitable for you?

• Are you satisfied with your plan to sell or deliver products via
the Internet?
124 Build Long-Term Growth



• Do you spend time with your salespeople, one-on-one?

• Do you spend time with your top customers, one-on-one?

• Are your sales and customer service people superstars?

• Have you asked for testimonials? Referrals?

• Are you maximizing the business potential from existing
customers?

• Have you “fired” unprofitable customers by raising prices?

• Have you asked customers what they like about doing business
with you and what they don™t?

• Do you have a backup plan for the “what ifs”?

” What if sales were only 50 percent or less of forecasts?

” What if a major marketing effort fails?

” What if you lose your biggest customer?

” What if your competitors cut their prices?

” What if competitors come up with a new or better product or ser-
vice than they currently sell?
125
Mastering the Art of the Sale



DOLLAR SALES MONTH-TO-MONTH

Worksheet 4.1 is a simple and straightforward way to look at your actual
month-to-month sales compared to projections by product. A great deal
of information is contained in a very simple worksheet.

Better than an overall company sales summary, this worksheet enables
you to identify:

• What is working and what isn™t.

• Which product sales are steadily increasing.

• Which products need changes to remain viable.



Making It Happen

Worksheet 4.1 shows actual sales figures compared to sales projections
by month and determines average sales by month. First, list all of your
products or product lines in the left column. Take the projections devel-
oped in the Dollar Sales Projections by Product Worksheet (2.3), and add
those in the second column. Next, on a monthly basis, add in your actual
sales dollars by product.

If you have records of past years, use the worksheets to plot the numbers
for these years as well. Add all sales by month and put that number in the
second from last total column. Finally, divide this number by the total
number of months for which you have sales figures (divide by 12 if you
have numbers for the whole year) to get an average dollar sales figure
by month.



Reality Check

Consider these questions about your completed worksheet:

• Do you see any cyclicality by product?

• Can you structure your sales and marketing efforts to take ad-
vantage of sales trends?
Worksheet 4.1
Dollar Sales Month-to-Month (Month/ Year)
Goal for Total
Month
Current Year-to-Date Average Sales
Product Month 1 2 3 4 5 6 7 8 9 10 11 12 Sales by Month*




*Divide total year-to-date sales by current month number.
127
Mastering the Art of the Sale



• For which products are your goals greater than your actual sales?

• Is this because you were overly optimistic when making pro-
jections?

• For which products do actual sales exceed goals? Is this expected
to continue, or is it due to a particular marketing effort?
128 Build Long-Term Growth



PRODUCT SALES BY CUSTOMER

A goal of every company should be to sell as much of each type of prod-
uct as possible to every customer it acquires. Worksheet 4.2 identifies
dollars each customer spends with your company. Looking at three
years™ worth of data enables you to see whether customers are spending
more or less on average than they did two years ago.

Because so much money is spent just letting potential customers know
that you exist, additional sales to existing customers are very profitable
business. Every company should have a plan to sell more products to ex-
isting customers. This worksheet can help you track whether your plan is
working.



Making It Happen

Worksheet 4.2 helps you calculate dollar volume per customer over the
past three years. Use the same three-year lists of products and total dol-
lars per product you developed in the Dollar Sales Month-to-Month
Worksheet (4.1) for the first two columns (A and B) of Worksheet 4.2. Add
the total number of customers that buy each product for column C. Fi-
nally, divide column B numbers by column C numbers to get column D.



Reality Check

Consider these questions about your completed worksheet:

• Was this exercise difficult because so many customers buy more
than one product or product type, or are your customers generally
customers for one type of product only? (If you had a difficult
time segregating customers by product, the total company num-
bers at the bottom of the page will be most meaningful for you.)

• Which products bring in the highest dollar volume per customer?

• In which products are the dollar volume per customer numbers
going up each year?

• Are these increases because of price fluctuation, or has the num-
ber of units sold to each of these customers increased? (The
shaded box in the bottom right of the worksheet becomes one of
Worksheet 4.2
Product Sales by Customer
Two Years Ago Last Year This Year
A B C D B C D B C D
$ per $ per
Sales Number of Customer Sales Number of $ per Sales Number of Customer
Product ($) Customers (B/C) ($) Customers Customer ($) Customers (B/C)




129
Total Company
130 Build Long-Term Growth



your key indicators. Measured over time, this will tell you if you
are increasing sales dollars per customer.)

• Is your customer base shrinking or increasing?

• Do a few customers account for a specific portion of a particular
product™s sales? If so, what can you do to take optimum advan-
tage of that connection?
131
Mastering the Art of the Sale



TOP-SELLING PRODUCTS

This exercise helps you determine which products sell the highest num-
ber of units and bring in the most revenue. If you have only one product,
this will be easy. If you have more than one, it™s important to know
which products your customers like best. But even if you offer only five
products, your top product is probably the one you should consider en-
hancing with add-on or similar products. You may also wish to analyze
how you market these successful sellers and determine if you can make
similar efforts with other products.



Making It Happen

Assemble a list of the sales in units and dollars of your products for the
past two years. Rank them from top to bottom on Worksheet 4.3, starting
with the product that sold the greatest dollar volume last year. Complete
the worksheet by filling in the projected and actual units and dollars for
the two-year period.



Reality Check

Consider these questions about your completed worksheet:

• For which products were your actual numbers above or below
your projections? What caused the variances: the projections or
your performance?

• For which products did your sales volume increase? Why?

• For which did it decrease? Why?

• Do the trends up or down in sales suggest long-term changes in
your market? Or can they be explained by circumstances in your
company?

• Are your top products related in any way? Could you create fur-
ther products related to them? Can you market other products
with them?
132
Worksheet 4.3
Top-Selling Products
Last Year This Year
Units Dollars Units Dollars
Product Projected Annual Projected Annual Projected Annual Projected Annual




Totals
133
Mastering the Art of the Sale



SALES BY SALESPERSON

Worksheet 4.4 helps you look at how well your salespeople are perform-
ing over time. It looks at sales both in terms of the individual salesperson
and in terms of whether sales are to new customers or existing cus-
tomers. You may choose to do separate worksheets per product or prod-
uct group if you sell a variety of types of products.

This worksheet will allow you to compare the performance of salespeo-
ple and help you better coach or incentivize them to a different balance
of new or existing customer sales.


Making It Happen

Compile a list of all salespeople in the left column. Next, add in projected
and actual sales for this year. You may wish to do this each month using
year-to-date figures, separating sales between those to new customers
and those to existing customers. Repeat this exercise for last year. You
may wish to use year-to-date figures in this area of the worksheet to
have comparable data in both sections.

You can also perform the same analysis by looking at products that have
been introduced over the past 12 months.


Reality Check

Consider these questions about your completed worksheet:

• Are some salespeople clearly outperforming others? Are some sales-
people clearly underperforming when you know what is possible?

• Are you satisfied with the mix of new customers and existing
customers?

• Is the performance of your salespeople increasing or decreasing
over time? By each individual? For the group?

• Were your projections uniformly too optimistic?

• Is your sales compensation plan appropriate for the sales volume
brought in for each salesperson?

• What percentage of total sales is brought in by each salesperson?
Worksheet 4.4




134
Sales by Salesperson
This Year Last Year
Name of New Customers Existing Customers New Customers Existing Customers
Salesperson Projected ($) Annual ($) Projected ($) Annual ($) Projected ($) Annual ($) Projected ($) Annual ($)
135
Mastering the Art of the Sale



<< . .

. 14
( : 28)



. . >>