I’m Steve Davis, and I wanted to talk about steps you can take to reignite your business. A lot of young companies that I deal with tend to plateau after they’ve reached a certain level of sales. They can’t figure out how to blast through that plateau; their sales are stagnant.
When sales are stagnant, most organizations automatically cut back on marketing and sales expenditures. They also tighten management controls, but sometimes they go overboard and tighten too much, stagnating the entire organization. The problem is 87.5% of such companies fail to achieve profitable growth even though more than 90% have detailed strategic plans.
Making Your Strategic Sales Plan
Strategic planning focuses on marketing and sales tactics. One thing companies never ask is whether their business model still makes sense. Markets are dynamic, markets are vibrant and change all the time. Some companies never challenge the status quo because they have a warped view of what’s going on. 87 percent of companies from the Fortune 500 in 1955 are gone; 50% of the Fortune 500 companies from 1999 are gone.
After you’ve figured out what your strategic plan is, you have to look at your buyer profile. Your buyer profile may have changed over the years; people buy on emotion but they justify with statistics and logic. One of the three basic emotions that drive sales is pain. If someone has pain, they will do and pay whatever is necessary to remove that pain. But when they do that, they want an expert.
Fear of Pain
The second basic emotion that drives business is the fear of pain. Whole industries are set up on that fact: insurance, anti-malware, antivirus, military. And the third emotion is what the buyer can gain: money, power, productivity. All these factors explain why you need to revisit your buyer profile.What consumers care about is very different from what businesses want. You have to understand how businesses want to engage and buy.
If all the new customers are millennials as opposed to baby boomers, for example, this changes how you would engage with the customer. Baby boomers typically read on a daily basis, while most millennials want to be engaged through their mobile phone. If you’re involved in the corporate market, who is involved in the purchase decision? Typically 7.5 people are involved in a corporate purchase decision. In the consumer market, you need to understand who in the family unit is involved in the purchase decision.
Sales Trigger Events: Understanding the Buyer’s Journey
I always look for sales trigger events. Studies show that 85 percent of sales cycles wrong; they’re not in sync with the buyer. Find out what the buyer is going through. What is their journey? What are their real concerns? How do they make decisions? Once you do that, you can make better decisions over what marketing programs to put in place.
When I get involved with companies with separate sales and marketing departments, I guarantee the two groups are not on the same page. I’d rather have my sales force spending time selling. IDC shows that an extra 10 minutes a week focused on sales will generate an extra $57,000 in additional revenue per year. When marketing and sales are aligned, they grow 5 percent faster on a year-to-year basis, are better at closing deals, and have less customer churn.
Using Marketing to Support Sales
Now you have to refocus your entire marketing effort to support sales. One thing you can do is focus marketing on developing tools that sales can use at different stages of the buying cycle. It’s important when aligning sales and marketing to not only establish a lead management program, but also to figure out when a lead needs to be handed off to sales. Often leads and customers are handed off to the sales group too early.
Companies spent too much effort finding new customers, but not looking at the customers they already have. When you come up with a new product, it’s more profitable to sell to your existing customer base. Your marketing costs are significantly less and your sales cycle is significantly shorter. It’s more money directly to your bottom line.
Learning from Your Losses: How Everything Contributes to Revenue
If you lose business, do a postmortem on the reason why. Was it a competitor? Was a lack of product? You can’t move forward until you understand why you’ve lost business. It may be very eye-opening, in which just a slight change in your business can help retain more customers. And even if a customer leaves, it doesn’t mean they’re gone forever. Develop a customer reactivation program, which is a long-term marketing issue. If a customer used your product once and had a good experience before, it’s important to keep them updated so they can come back.
Measure everything you do and how they contribute to revenue. Identify what’s failing and why it’s failing. Take success and reward it. Refocus resources from failing areas to successful ones. But whatever you do, it’s not going to be static. It’s not the fastest or the strongest that survives. It’s the quickest to adapt.