3 Obstacles to Finding the Root Cause of Poor Sales Performance
We are often engaged by a client to help resolve a specific sales issue they’ve identified. Before we get too far along, we always spend some time upfront to ensure we understand the issue, including all root causes, and are solving the right problem. What usually surfaces is that the problem that needs to be solved is not the original issue perceived by the client. Sometimes it’s closely related and other times it is much farther afield. So why is it so difficult to identify the real, underlying sales issues in our organizations? Here are three reasons we’ve encountered:
Reason 1: The Power of Suggestion
We're sometimes thrown “off the scent” because a reputable vendor has suggested we suffer from an issue their product or service addresses. We often defer to a vendor’s expertise, assuming they have more external data and understand common sales productivity issues better than we do. An example of this would be with CRM vendors. We’re all inundated by sales tool vendors pitching us on what we need to make us more productive sellers. CRM vendors preach that if we only had a standard sales approach, sales opportunity repository, and a management dashboard-- sales would almost manage itself. Many companies rush out and buy applications without fully understanding the problem they truly need to solve.Reason 2: The Sales Stakeholders Are Too Close to the Current Sales Process
We suffer from what psychologists call an inside-view. This is a common problem; people who have knowledge of their own situation rarely have the external comparative data necessary to recognize what they don’t know--the unknown unknowns. This lack of an outside-view is the same reason that public works projects typically run 3-10 times original estimates and that kitchen renovations run, on average, thirty percent more than originally planned. Though we allocate time to read research reports and meet with vendors to gain an outside view of industry trends, as quarterly deadlines arrive these tasks are the first to be put on the back burner. Reason 3: Stakeholders are Too Far Removed From the Sales Function
Company executives sometimes become so insulated from the sales process they lose awareness of the company “sweet spot” and how the salespeople successfully represent company solutions. They can become too distant from the sales process to understand which of the moving parts may be out of spec and need tuning or a major overhaul. All executives should accompany salespeople on customer visits periodically to stay current on buyer-seller behavior and market trends. The best way to understand current sales issues (and to ward off potential new ones) is to make sure you are walking in your sales staff’s shoes often enough.
Consider initiating an executive account sponsorship program and/or assigning yourself a monthly sales call quota to help stay in-front of prospects and customers. In our experience, the more removed executives are from the day-to-day sales process, the less-likely they are to understand potential sales obstacles.
To follow are 4 client examples that illustrate how the underlying cause of poor performance differed from the original, perceived problem:
Client 1: “We’re losing deals because our pricing is too high.”
The Board of Directors of a cloud software company was trying to mediate a dispute between the sales and marketing functions over the issue of non-competitive pricing. The salesforce felt they were losing an extraordinary number of deals due to pricing. Marketing was not so sure of the reason(s) for recent sales losses. We found out that pricing was an issue-- but it was the pricing architecture rather than the price points that was causing the problem. Some smaller deals were being lost due to pricing, but more often, larger deals were underpriced and sold at less-than-market rates leaving money on the table.
Client 2: “Our sales force doesn’t communicate our value messaging effectively.”
At one of our clients, a value messaging vendor had convinced them that their messaging was detracting from their brand and impeding sales. If only they you could update their positioning and create a more concise, compelling value proposition, their problems would be solved. But of all the potential obstacles impacting your sales organization’s effectiveness, the likelihood that your value messaging is the prime culprit is unlikely. In this case, the client’s issue, based on our research and analysis, was that they did not have a consistent approach to territory planning and sales opportunity pursuit--not their messaging.
Client 3: “Our win rates are trending lower due to competitive pressures.”
A high-tech manufacturer saw their win-rate, as documented in their CRM system, was below peer benchmarks. This was unusual since most CRM systems show artificially high win-rates -- caused by the salesforce’s reluctance to enter earlier stage, lower-probability sales opportunities--preferring to wait and enter later stage, higher-probability deals. Subsequent research by our team led us to scrutinize their RFP response process rather than focusing on the perceived diminishing win rates. We found they were entering the prospect’s buying process much too late to be successful.
Client 4: “Our product functionality is not competitive.”
A website development tools and training vendor asked us to create and deliver a customized sales training program. The company had noticed an increase in lost deals (as compared to prior measurement periods) and felt new sales skills training was needed. The feedback from the sales people was that their product functionality was not as robust as the competition. Our research determined that the product was not inferior. The real problem was that the entire organizational sales process (and compensation) was built exclusively around the scheduling and delivery of a detailed product demonstration. The demonstrations were being conducted too early and out of alignment with the prospect’s buying process-- long before there was an understanding of the prospect’s business issues. Until this critical sales process flaw was addressed, any generic sales training investment would have been a waste.
Accurate self-diagnosis of sales issues is a common problem. Remember that all things are not as they seem. You’ll need to dig deep to unearth the root causes. Don’t be unduly influenced by vendors--assuming they know more about your business than you do. Consult with your first-line sales managers and a sampling of all levels of sales performers to receive input. A consensus root cause will usually emerge. Make sure to take an "outside view" of the situation. If you decide to use external help to improve your sales performance, make sure you allow them adequate time to perform their due diligence--this will ensure you are addressing your most critical sales issue.
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Mike Peters is the managing director of the Whitespace Consulting Group, a global business development strategy firm. The Whitespace Consulting Group has been helping multi-cultural clients optimize their business development strategy since 2005. He can be reached at firstname.lastname@example.org, @WhitespaceCG, (508) 353-5168.