Why Success Requires Strategic Focus

Where companies look for growth has a major bearing on the level of success they enjoy. This is simply a recognition that not all markets offer the same potential for growth.

Those companies that grow fastest do so by carefully choosing where they will compete – they steer themselves strategically into those market niches and segments that are most attractive and amenable.

They don’t seek to have the best solution in the marketplace overall, but do have distinct advantages in meeting the needs of particular groups of customers.

Why Strategic Focus is Important

Here are the reasons why you should focus on particular customer groups, or segements:

1. Your sales and marketing can only stretch so far, so you have to focus your efforts on those customers that can deliver the greatest success. The fact that for most companies 20% of their customers deliver 80% of their profits means that too much sales and marketing activity is focused on the wrong customers.

However, even if your resources were unlimited no company can be all things to all people. So inevitably you must therefore make choices about the customers you want.

Indeed, one of the greatest opportunities to increase the effectiveness of your sales and marketing is to tailor it to specific segments and niches. For example, instead of having one piece of marketing material, or sales presentation for all the industries and sectors you are targeting, tailor it to each significant segment and niche in turn.

2. Some customers are easier to win than others, being more attracted to your solution and more amenable to your sales efforts. Even if everybody needs your product, or solution, there are some that need it more, have specific requirements and can pay more for it. So it makes sense to seek them out.

3. Every company likes to think that it's industry, or segment is different. So they will quickly ask if you done work for others like them? They want to know that your product/solution is specifically suited. They will listen carefully to see if you understand their industry's trends, language and challenges.

Being a specialist (or at least being seen to be specialist) is important because customers think the needs of their business and their industries are special. The big bank, for example, will not be impressed if you experience is with credit unions.

4. A distinctive advantage does not come from being the absolute best, but from being better at meeting the specific needs of particular customer segments. That is because the needs of customers and the way they buy generally varies by sector, location, company size, stage of development, etc.

Successful companies are ordinary companies, but with a clear focus on a key market segment(s) where they have a distinctive advantage. Once they choose their ideal customer they are not afraid to alienate others in tailoring their proposition and message exclusively to that group.

Why focus can be difficult

For most managers the need to focus on the right market segment(s) goes undisputed, however the reality is that many companies struggle in this area.

• Too many companies try to be everything to everyone, but that dilutes the appeal of what they offer. They fail to recognize the unique differences and particular needs of different customer groups and are vulnerable to competitors as a result.

• Too many companies don't segment their market to identify the most attractive / amenable group of customers and don't tailor their proposition and how it is sold accordingly.

• Others make the choice but focus on the wrong segments with disastrous results. Focus, or segmentation, is not just about customers, it also means choosing your competitors, margins, and so on. Hence the importance of making the right decision.

• The main reason for getting the focus wrong is an insufficient understanding of potential customers needs, or competitors. The next is an impatience to get results accompanied by a concern that the chosen market may not pay sufficient dividends.

Want to read more on why you should not try to appeal to everybody?

The most common problems with sales process

1. Everybody has their own way – different approach and results across
the team/over time - suboptimal
2. No concensus regarding the best way
3. Focus on sales process not buying process
4. Continuous review or process
5. Sales process not captured by slaes systems
6. Training in the best way
7. Too much depends on the person
8. Wrong process / inflexible / unresponsive
9. Tries to get customer to conform, focused on the seller not the
buyer, not enough information on how customers buy
10. Takes longer to train in new people

The most common problems with sales structures

1. A deficit of leadership and coaching
2. Trying con compensate for inadequate sales systems
3. Not enough time spend tin the field by management
4. Too little or too much reporting
5. Too formal or not formal enough structures
6. Organisational centric versus people centric
7. Hands off structures trying to compensate for hands on management
8. Inflexible, authocratic, beaucratic – restrict rather than enable

The most common problems with sales systems

1. Don't give managers and their staff the information required /
provide visibility, predictability and control in respect of sales and
marketing
2. Out of date – functionality – usability
3. Out of date or irrelevant information – not cleansed / pruned
4. Not used consistently by reps
5. Not used by management, not used at sales meetings, for calculating
commissions, etc.
6. Used differently by different users
7. Not aligned with sales process
8. Limited reporting functionality - Spreadsheets used for reporting
9. Insufficient training and support to users
10. Inadequate system admin
11. Lack of integration with other systems (calendaring, email, CRM,
accounting, etc.

The most common problems with sales & marketing plans

1. Not specific enough about what is going to be done and when (action
plan, dates, costs, deadlines, etc.)
2. Not enough marketing and strategic validation, insufficient
objective information and input
3. Not flexible enough to respond to changing market circumstances
(time horizon is too long and review processes are inadequate)
4. Writing a thesis versus setting direction, making decisions,
generating consensus, empowerment, etc.
5. Insufficient bottom-up involvement (involve customers and staff) –
traditional process for writing plans is not the best means of
collaboration in the new era)
6. Cross functional – align sales and marketing
7. Process is more important than the plan
8. Trade-offs not explicit – strategy is not clear
9. What is the purpose of the plan / the audience

What would help your sales team to maximise its success?

– More effective leadership (including leading by example)
– Clearer lines of responsibility
– Involving and engaging the team
– Greater appreciation and recognition
– Improved communication & openness
– Creation of a high-trust culture
– Greater clarity of direction
– Encourage greater innovation & creativity
– Delegation of responsibility and the empowerment of staff
– More effective administration, organisation & planning
– Remove barriers to increased effectiveness (as perceived by the team)
– Improved team work, team spirit, etc.
– More sales support (administration, lead generation, technical, etc)
– Easier to use sales systems (to track and manage leads, meetings,
cycles, orders, etc)
– Revised sales structures (e.g. more effective sales meetings, or
revised reporting arrangements)
– Training & investing in people
– Revised rewards & incentives
– Sales process changes (addressing the issue of sales effectiveness)
– Remove false expectations and limiting beliefs (e.g. nobody is
buying at the moment)
– Greater visibility

Are there any obstacles in the way of individual sales people selling more?

What is getting in the way of each of your sales people selling more?  Many managers are afraid to ask this question fearing the result will  be a list of excuses. The result is the opposite however - once all potential barriers (real or imagined) are clearly identified they can be tackled head on.

The most common barriers are; the relationship with the manager, levels of marketing and support, changes in the market (e.g. competition), the sales message or proposition and inefficient sales systems.

Here is a list of the key areas in which sales people can be helped to sell more:

(a) Leadership
Including building trust and respect, better communication, involvement in decisions, lead by example, clarity of responsibilities and direction, consistency, etc.

(b) Support
Provide assistance in the following areas:
– Messaging (how to communicate a compelling proposition for the customer)
– Marketing support / materials / sales aides / build awareness / references
– Product / industry knowledge and market intelligence (including competitor analysis, etc.)
– Sales training and coaching
– Pre-sales support
– Delivery / implementation / customer service / account management
– Unrealistic or impossible sales targets ) / demands

(c) Free up more time for selling by reducing time spent on:
– lead generation
– sales reporting
– admin
– preparing proposals
– travelling
– other areas (e.g. product meetings, order fulfilment, etc.)

(d) Provide more and better leads:
– Assist the sales person to be more effective in generating more of his/her own leads (buying, or building lists, direct mail shots, marketing support, etc.) 
– Provide the sales person with more and better leads in order to support his/her own led generation, contacts, black book, introductions, etc.

(e) Sales systems
The effective use of a good sales system (SFA/CRM) allows sales people to reduce reporting time, improve levels of personal organisation and increase sales effectiveness (conversion rates).

Yet, most sales people don't use a sales database, or at least don't use it fully. They regularly complain that sales databases, or systems that are cumbersome, slow, lacking in functionality (e.g. mail, calendar, etc.) and containing out-of-date information.

– Upgrade, or replace the system to ensure full usability and functionality
– Provide more training and user support
– Provide administrative support (including purging the system of redundant information, etc.)
– Make use of the system compulsory (linking it to payment of commissions, etc.)

(f) Strategic issues, dealing with the following objections:
– Competitive advantage (from pricing to product comparison)
– The market place is in a state of change (e.g. a downturn, etc.)
– We are not well known in the marketplace
– We need to build our brand, or change our reputation
– We need more / better reference sites / customers
– We need to re-examine the markets we are serving (geographic, sectoral, etc.)

Sales Success - the cost of bad leadership

A good leader can transform ordinary sales people into champions; a bad one will hold everybody back.

Job related performance and satisfaction  (we sometimes forget that the two are inextricably linked) depends more on the quality of the manager than almost anything else.

Leadership, empowerment, coaching and motivation are not soft stuff, they have the potential to boost the performance of individuals and teams by as much as one third.

A major office supplies company had long suffered from poor leadership at the top and a culture organization-wide of:
• Excessive bureaucracy
• Poor communication
• Limited innovation
• A culture of blame
• Poor teamwork

There was confusion about the lines of communication, with sales people going over the head of the sales director and to have decisions reversed by the CEO. Levels of trust were low owing to u-turns on previous commitments made by management regarding commission payments.

There was no documented sales plan, no mechanisms to review performance and no written job descriptions, or contracts of employment. Sales meetings were both irregular and Ineffective.

How to calculate the cost? Well, the company was hemorrhaging customers and sales at a rate of up to 15% annually.

The series of changes culminated in each sales person developing and agreeing their own individual sales plan. The results were important, however when the manager was moved aside the performance of the team soared to new levels.

Do you really know what your sales people are thinking?

Most managers are reluctant to ask their sales people what they need to succeed.

One manager employed a confidential online questionnaire to find that 65% of his sales team identified lead generation, administrative requirements, customer support and sales collateral as barriers to their success.

Rather than viewing the responses as a series of excuses, the manager seized the opportunity to drive sales forward.

The result was a number of quit pro quo commitments by the manager, including specific actions to generate more leads, create new collateral, etc.

In return the sales team committed to increasing the levels of sales activity and effectiveness, as well as to the consistent use of the company's sales database.  Levels of sales activity rose swiftly, with many more potential customers being meet.  Everybody won - he company got strong revenue growth and the sales people morecommissions.

Understanding sales team performance

It is too easy to point the finger at an under-performing sales person and miss the bigger issue in terms of organisational sales performance and potential. The former is generally a symptom rather than a cause.

So, to really understand the performance of a sales person, a sales team, or a sales organization look at it in 4 dimensions:

1. From the top down, in terms of the; leader, team and the individual sales person

2. Across the different stages of the sales process: Leads, meetings, cycles, orders and repeat orders

3. In terms of skills, behaviors and attitudes as they are today and what is required into the future

4. In the context of the key elements of sales effectiveness - that is sales; systems, structures, processes and plans