Five Sales Mistakes You Can Avoid

| Author: Bob Wendt

Is your sales team effective? Is it as effective as it could be? There are five mistakes that should be on your sales manager’s radar. Correct these mistakes and your team will be much more effective.

1. Not knowing your ideal customer. Often sales effort is spent pursuing customers who aren’t a good fit for the company or who aren’t going to buy. Making the appropriate effort upfront to identify the attributes of the ideal customer and your ability to capture that customer will save you precious sales time. You need to develop a method of finding the ideal client. One idea is developing a scorecard that details what the ideal customer looks like, including sales volume, geography, product offerings, and market approach. Define how likely it is for you to start a new relationship with each client listed.

2. Spending time on unqualified customers. Without a methodology to qualify customers, your sales team will be wasting time on those that don’t have the budget, don’t have the authority to make a decision, or have misrepresented their need for your product. Help your sales force develop the skills to determine the gatekeeper’s level of authority. One way to polish these skills is by sending at least two people to initial client meetings. They can help each other decide if the customer meets your expectations as being qualified. Refining your sales process so your team can work on leads that have been qualified by lead-scoring increases your closing rates and creates more predictability for your sales pipeline.

3. Approaching a customer with no clear objective. Asking a potential client to meet so you can find out more about their business is not going to happen. Sales people must do their research to establish a reason for someone to meet with them or will never get those appointments that can lead to meaningful customer relationships. In today’s digital world there is no excuse for not understanding the company or contact you are trying to reach. Once research has been done, meetings can then focus on a client’s needs, new product, or expanding to new territory, and how your company can help, given that information.

4. Not measuring the right activity of your sales team. Activity is the driver of any sales organization and a good sales manager is constantly measuring it. Your products could be great, your value proposition right on target, but if you are not engaging enough customers your sales growth will stall. Limiting activity measurements to numbers of calls or meetings can easily be manipulated by a salesperson to create a perception of activity. More effective measures of activity should relate to activity that are more tangible, including estimates and proposals. These are directly related to an outcome that will impact sales. Not measuring these types of activity only create an illusion of progress but won’t lead to closing sales.

5. Thinking your customers are making a decision based on price. No one buys on price. Clients go through a value equation that measures different factors, including turnaround, technology, and risk mitigation, that all play into the decision to buy or not. It’s the salesperson’s ability to understand the buying criteria that will lead to improved sales. That understanding allows the salesperson to connect the dots, not only with how your product works, but with the value it can bring to the client organizationally. If salespeople are ineffective at connecting those dots, then price will be the only differentiating factor, and that’s what clients will use to say no.

Feel free to use this as a checklist for your team. Highlight what you’re doing right and use these tips to find ways you can improve.

Are you doing everything you can to create an effective sales pipeline? For ongoing access to additional resources, connect with me on LinkedIn or subscribe to get monthly updates on growing your business in your inbox from Cultivate Communications.

Robert Wendt
Cultivate Communications

Robert is a lifelong Milwaukeean and his passion to see our Milwaukee grow led him to launch Cultivate Communications in 2010. Cultivate thrives on bringing together inventive ideas and marketing technologies to drive sales growth.

How To Trim and Score Your Customer List

I heard a great quote recently; “If a salesperson is calling on more than 50 prospects and customers, that salesperson has a hunting license instead of an account list.”

It is unrealistic to think you can manage more than 50 accounts.  The only exception to this rule is if you are selling high end capital equipment that is purchased once every 20 to 30 years.  But, if you are making repetitive sales to the same customers over and over, you are kidding yourself to think you can manage more than 40 to 50 accounts.

After you slim down your customer list do some analysis and I’d wager that somewhere around 80 percent of your revenue comes from the top 20 percent of your account list.  Furthermore, those last few accounts that make up your top 20 percent of the revenue are substantially smaller than those at the top of your list.  Do some account review and balance your accounts with some new larger accounts.

Next, implement an RPM Customer Scorecard.  Yes, just like purchasing does with your suppliers, but they call it a Vendor Scorecard.  An RPM Customer Scorecard measures three critical components of a customer:

  1. Revenue.  What is the gross sales volume of each customer?  Those accounts at the top receive a value of 10 and those at the bottom get a score of 1.
  2. Profit.  This is a measurement of the percentage of revenue that goes to the bottom line.  The highest get a 10 and lowest get a 1.  Here’s a chance to work with your controller!  Controllers are pleasantly surprised when salespeople ask this question.
  3. Maintenance.  Here’s the fun measurement, sometimes called the nuisance factor.  Those dream customers that you enjoy working with, although demanding, are fair and when they need a favor you go out of your way to help them.  On the other end is the person’s name that makes you flinch every time you see it in your inbox.  They ask for discounts, shorter lead times and never say thank you.  You can guess who gets the 10 and who gets the 1.

Total up the scores.  A score of 25-30 represents a customer you want to make sure you have a plan to keep them as a customer.  A score of under 10 is a customer you should refer to a competitor.   With this scorecard in hand think about the creative conversations you can have with your customers, particularly at the time of a price increase.  With those customers scoring between 10 and 25 you can have great conversation reviewing the scorecard.