Why are sales important for the success of your business
Usually every business that gets founded first starts with a great idea or a great product.
Then the founders try their best to grow the business as well as they can.
Growing a business usually involves one thing more than all the others:
to make lots of sales.
Sales are the lifeblood of any business.
Have enough of it, and you will thrive even if you neglect important things or lead the whole venture in the wrong direction.
But have too few sales, and you will be in trouble despite having everything else well-aligned.
What is the difference between a weak company who is in trouble and a thriving company that prospers?
It is their sales.
If there are enough sales on the front end of your business, new customers are being generated constantly and systematically.
Instead of selling you products by mere coincidence, the business will stand on solid ground and continue to grow.
Even if the product might just be average or all other parts of the business like accounting or research and development are lacking performance, with enough revenue you are still winning.
Sales are bringing in revenue and profits, and as long as this part of the whole machine is running well, you will be safe and even better off in the future.
In simpler words:
As long as there are piles of cash coming into the business on a consistent basis, and there are systems in place to ensure it will stay that way, everything else becomes secondary.
The business will not only look good financially, but also be in favor of outside stakeholders or investors, allowing you easily to also bring new people and know-how into it.
As long as the sales in your business are sufficient you are free to have a higher salary for yourself, have to worry less about budgeting, and can more easily recover from any mistakes that were made.
It also gives you the freedom to choose the best option as the business owner that you could have:
You can sell the business profitably if you want to retire early.
The ongoing revenue is one of the main criteria for the sales price of a business, allowing you to maximize your possibly biggest payday ever.
Of course you could also stay in charge of the business and run it yourself, or also sell parts of it and stay in the leading position.
This option allows you to massively cash out but keep control over the company, whatever your plans are there are lots of possibilities as long as you get the sales part of the business right.
It is the place where we all would like to be, to have the full freedom to choose how we would like things to continue and when.
Maybe this was even the reason why you started your business in the first place.
In order to achieve exactly that for yourself and your business, here we have put together some tactics that you can use to strengthen your position in sales from all angles and to help you gain more traction easily and fast.
Get all your people Involved
It is time and time again surprising if you look at a small or mid-sized business with employees up to 50-60 people, how different their answers are to certain fundamental questions about the business.
For instance, when asked things like “What does the business do?” or “How do you serve your customers?” the answers are not only often fundamentally different from one another, sometimes they even contradict each other.
Yet such information is vitally important as these employees represent your business to the outside world.
These answers do not only affect friends and family of the employee but also to outside customers or stakeholders.
And the moment will come, when you are not asking such questions but a customer might ask them.
Your employees are those who will have the most contact with the customer.
Appearing professional and legitimate as a company needs a consistent message coming across all potential touchpoints.
And sure enough, some customers will ask questions like these and either buy from you or buy from your competitor based on the answers they receive.
Imagine someone is interested in investing in your business and wants to do a little investigation, he decides to call in different departments of the company and ask the same question.
He calls the general customer service line, the production center, and talks with a sales representative about how the business is doing, about its strengths and weaknesses.
He receives 3 completely different answers.
Not good, not good.
In most cases you would have just lost an investor.
Although this is more a sales management topic than about sales itself, it starts with the same fundamentals that you need in your business for building an effective sales organization.
To make sales predictable, or even plan them in advance as would be the ultimate best-case scenario, you will need excellent and consistent communication through the whole organization that will ensure everybody is on the right track.
It will not be enough to have your top-performers know the right focus for the organization, but all on your team have to be aligned with it.
The communication to the outside begins with proper communication at the inside first.
If you do not provide a good example, don't expect your staff to do so.
It is impossible to form a strong sales force if there are 10 different ways to handle a request from 10 different sales people:
How will you measure what works and what does not work?
How should you form tactics and strategies if everybody has its own way of handling things anyway?
How will you make sure customers get the same offers, regardless of who they talk to on the phone?
If you have no clear answers to these questions, your sales team is far from scaling a business to success.
So this will be the first step in transforming your business into a sales leader:
Set effective communication standards and align the forces that are within your control.
In sales there are enough things that are out of your control:
You will never be able to influence the situation your customer is in right now when faced with a buying decision.
You can never know the circumstances in his or her environment that will have an impact on the sale.
You can also never predict what they will say or feel when they are presented with your offer, although you can do your best to take influence on that with an effective selling process as we will highlight shortly.
That means there is already enough uncertainty in selling itself.
Thus you are well advised to make sure you stay in full control about what is within your reach.
And that is your sales team and their behaviour including what they say in which situation. Start here if you are serious about becoming a sales leader in your industry.
Establish effective communication
We humans are not rational beings. Neither is our communication.
Interestingly, we have been indoctrinated with a form of communication since our school days that is entirely wrong.
We assume that if you tell somebody something, then he or she has to know it.
Because, hey - you just told it to that person.
So why should they not remember it?
After all, you just heard it.
Are you dumb or what?
It sounds perfectly logical and clear, and still it does not work in real life because our brains are simply not wired that way.
First of all we are overloaded with communication messages the entire day.
Consider these points:
Do you remember all the commercials you saw on TV last night?
Or what you read in your morning newspaper?
How about the announcements you heard on the radio while driving to work?
The conversation with your coworkers?
What about the third topic of the last 3-hour meeting you had, remember what it was?
Please tell me that all in detail.
What do you mean you don’t remember?
After all you heard or read it all, didn’t you pay attention?
Are you dumb or what? :)
Jokes aside.
I think you get how stupid that form of communication actually is and how we mistreat each other over and over again for just that.
It is actually failed communication from the person giving the orders, and not the recipient of the message.
But still this form of communicating is socially accepted and implanted into us since childhood:
In school the teacher says something once, and you are supposed to remember it.
And then they can't understand why there are so many kids with trouble in school.
To communicate effectively, no matter if it is as a leader or in sales with your customers, you have to repeat the important things over and over again.
Especially with complicated products that have long selling cycles for your sales team, the crucial elements of the conversation need to be mentioned over and over again.
Studies have found that in marketing the customer needs at least 7 interactions with your company or brand before they even start to be aware of your existence!
And guess what, the customer is a human being just like everybody else.
They will only remember small parts of your sales presentation, and that only if you did an excellent job.
And your employees are human too.
So they will have to be constantly trained and educated about the crucial things to know, understand and implement in their daily actions.
Effective communication is a practice hardly any adults get right, so do not expect your sales reps to know exactly what to do just because they work in sales.
But still managers over and over again make the same mistake of mistreating employees with impossible expectations (“I told you how to do that already 4 months ago!”) and thereby not only lose the morale of their troops, but also respect from them because it makes people feel offended.
After all, you can’t possibly remember everything.
Do not let that be you as a boss.
Gather honest feedback
To lead an effective sales organization and establish well-formed and executed procedures, communicating clearly and efficiently will be your most important skill.
If you are not born as a natural great communicator, you can learn that don’t worry.
But if you know you have a deficit, make sure you work on improving it.
The common problem is that if the manager has a lack of skill, he himself usually does not know it.
Only the people around him will know it.
Just the same situation as when a person is stupid.
The problem is that hardly anyone will tell the manager that he makes a mistake or that he is bad at communicating.
People will fear to threaten their own jobs with such behaviour, and it is easier to just act as if everything is alright.
Additionally people’s self-awareness is often bad in these areas especially.
So make sure you also have a way to gather honest feedback without any negative side effects for the staff.
Open communication is a necessity for real feedback, and failure or criticism must be allowed.
Nobody should feel dumb for making a suggestion, and this can only happen if there is an honest way of speaking to each other without fear of any reprimand.
This also requires a strong self-image of the leader, as your plans might be criticized as well.
Yet you must not take this personally but see it as a form of improvement.
Your people want to help, and this is why they might have doubts about a certain plan.
Make sure everything you want to state is also being received the way you want it by asking questions about the task and implication.
You will not be able to lead unless you really know that your people also understand what you are supposed to tell them, and why they get it.
If you have no clear overview of the situation, how would you ever want to improve it?
Most of your people will be smart and want to help.
Let them do it, by listening to their suggestions. You might hear a few things that will help you to make better sales.
Create an effective meeting schedule
“Repetition is the mother of skill, which makes it the father of learning and the grandparent of action.”
To implement effective procedures for your instructions and the right execution in sales, at least weekly meetings of the staff are important to repeat the message you want to bring across.
Weekly meetings are also what legends like John D rockefeller used to get all of his people aligned and are a well-tested management technique.
But make sure that the meetings are not obligatory time-wasters where people let their mind wander.
All too often, meetings are a situation where people switch off and discover the depth of their inner minds. Prevent this at all costs.
Instead, make it fun.
Be entertaining but still demanding.
Give the facts and tasks that need to be dealt with, but let people participate and contribute. Acknowledge different opinions and seek consensus in order to receive the optimum output. And closely stick to your scheduled timing - every minute is costing you money because salespeople are not doing what they should actually be doing, which is calling customers and making sales.
Be precise and only talk about what is necessary. Really necessary.
If meetings are held weekly, use them to discuss the terms and objects everybody in the room has to focus on and make agreements to fulfill these tasks until the next meeting on the same day in one week.
7 days, whereby 5 of them will in most cases be workdays, have proven to be an effective measurement for setting individual goals and having enough time to fulfill them.
The weekly meeting schedule
In the next meeting you can then review with your staff what has been successfully implemented, and what did not get done on time, and why.
This information will be important to reflect and set again new tasks for the upcoming week.
However, depending on what industry your business will be in, the time frame might be different.
Some businesses will do well with having a meeting every 2 weeks or even only once a month, while for others the time frame might be shorter and you can make 2 or 3 of these sales staff meetings a week.
You have to find the right amount for your individual business by yourself to see what works best.
Be open to the idea and do some testing and measure the results you get.
Find the ideal compromise between not involving too much time by just sitting together and discuss and how much updates on information the staff needs and necessary inputs to perform well
In sales, especially if it is about coaching new sales representatives, there might be a lot more training necessary than with a group of people who do the same work for 10 years every day.
So make sure to adapt the situation to the people who attend the meetings.
Different strokes for different folks.
Do Your Employees Know What To Focus On?
It is critical that all your people know what they have to do throughout the day and that they use their time effectively and focus on the most important task at hand momentarily.
A part of this can be discussed in the weekly meetings you are holding with your staff, like the short-term goals, or the necessary tasks of every individual employee and their daily schedules.
To make sure employees know what to focus on however, the larger picture is even more important.
By larger picture I mean questions that a customer or an outsider of the business might have and ideally everybody in every position at your company should have the same response, as we already have discussed in the introduction.
These might include:
What exactly does your company do?
How do you serve your customers?
What is special about your business?
What are the strengths and weaknesses of your products?
Is the business operating in a niche?
How do you generate value for the people involved?
What are the main objectives for the business?
If you don’t provide a clear answer for such questions and repeat it over and over in your communication, then you can't expect your employees to have a good and satisfying answer either.
We are all humans, and humans like to forget things.
These are just some examples of questions that will give a hint on what the business is exactly up to, and customers will sometimes ask them sooner or later.
In particular those customers who are either curious or sceptical about the business.
And many people will be either curious or sceptical before they buy, sometimes even both.
Such minor details can already make or break your sales success.
In these scenarios getting the customers to trust you is important.
But the answers to such questions will not only determine external effects, they will also determine the commitment and alignment of your staff on internal topics.
For example, if you want your business to become a sales leader, you will want your whole staff not only to know what activities they should focus on and why, but also to actively contribute to how the business can increase sales in general.
Many business owners are surprised how many great ideas come from people in all kinds of positions inside the company nobody would even think of when it comes to discussing things like increasing sales.
Yet hardly any business owner comes up with the idea to ask the staff for help when it comes to making important decisions.
The staff in the production areas, the people working at the assembly and installations, the IT departments, all of them are every day for at least 8 hours confronted with a tiny fraction of the whole company only.
They know this small part of the business inside and out.
You as the CEO will know more about the whole business in general, but especially once your business grows it is impossible to know all the details your employees handle for you on a daily basis.
Hence as a Manager you can never know these details as well as your people know them.
Your people will have many insights not even the brightest managers can have, simply because they operate from a different point of view and many details are too easy to overlook from the bird's eye perspective.
This can be an enormous pool of untapped potential which many managers like to overlook, because of ignorant thinking like “How come the guy working in the warehouse should know something I don’t? I'm the manager, after all.”.
Don’t fall into this trap.
Set your ego aside for a moment, even if you are used to being the boss.
Even if the manager is a genius, there is no way he would know so many details about the individual work processes like a guy who has been in the frontline position for 15 years and does the same work steps every day again and again.
They will certainly have something to say that will be helpful, no matter in which direction the company wants to go.
Make sure their ideas and concerns are being heard.
Align the entire company to pursue one goal
Let’s assume you want to make your sales team better and increase revenue.
The entire staff has to know that the company is now focused on sales.
This gives the awareness that everyone should be on the lookout for any possible option or change that can help the company create more sales.
Sales can be increased by many factors, like enhancing product quality, providing better customer services or finding new business partners.
So for whichever option you decide to focus on, make sure that people know about it.
If you want better quality to help gain sales, tell your people at the warehouses and production sites.
If you want to have better customer service to increase sales on the other hand, make sure this is indoctrinated into everybody who has even the smallest form of contact with the customer - from taking orders to the final product.
If you want to create more awareness for your products and find untapped potential in the market, make sure everybody in your marketing department is fully aware of this goal.
Remember what we have learned in the first last section of this article about effective communication.
Telling your people once what you want them to focus on will change just nothing.
They have to be reminded over and over again.
Not only what to do but also why to do it or they can unconsciously start to sabotage your operation because, hey, after all:
“Who cares about what the boss wants? I just want to get those 8 hours behind me and go for a beer.”
It is easy to give someone the feeling that you are listening and paying attention, in particular if that person happens to be your boss. When in reality their minds might be wandering to all kinds of places.
People naturally tend to contribute more if they know that what they do is appreciated and worthwhile.
So to get everybody on the same track, it is not only advisable to communicate your message as often as possible, what and why the company wants something, but also how this will benefit the individual employee who is helping with the task at hand.
Let people really understand why we are working together and essentially are all in the same boat.
Maybe you can implement a rewards program for people who really bring in great ideas, or bonuses which can also come in the form of a participation on the new revenue generated from their ideas.
A fair compensation for people’s efforts if they can help the company to make more sales is like a natural booster to your efforts and with many people thinking in the same direction.
It will multiply your idea generation processes with many different perspectives involved, which will further help to determine the proper course of where to focus most of the attention and resources you have.
As soon as you get the whole company aligned, from the housekeeping to the directors, thinking and working all in one direction, the business will after a certain time catch up a lot of momentum and energy within it.
You will feel that the spirit is different and everybody is moving in the same way if you execute this properly.
It can be all the competitive advantage you need to stay ahead for a long time in your market.
How will your marketing help your sales?
In a corporate environment it is often like the old battle of 2 superpowers:
Sales vs. Marketing.
Unfortunately many executives do not understand anything about either marketing or selling themselves.
They completely tend to overlook how these most important factors of the business have to be aligned with each other to really create impressive results.
Marketing and sales are two sides of the same medallion.
Without a good sales team, marketing is an uphill battle.
And without good marketing, the sales will be weak too.
Both forces have not only to coexist, but to work together like a finely oiled machine to achieve the optimum output for your business.
In real corporate life however, these two departments are often left to do what the individual managers of the department want or consider important enough to do, and a sort of turf war starts to form:
Marketing blames the lousy activity of the sales team for lack of performance.
The sales team at the same instant blames the lazy marketing department for not creating enough demand for the products and lousy lead generation to call on.
And so a downward spiral begins whereby nobody feels responsible for the sometimes disastrous results because it is always the other guys who are to blame and who do things the wrong way.
Handled in that way, there is no alignment.
And no supportive relationship working towards the same goal.
Time to grow up.
To make sure this does not happen to your business and instead create a synergy between marketing and sales to improve the overall output, set up clearly defined systems and responsibilities in the individual areas.
What exactly does the marketing department do?
What is not in its duty?
Where does responsibility start and where does it end in the sales process?
At what part will your sales reps take over?
How will marketing help to generate leads and prepare them for the sales team?
What will the sales rep mention in their presentation?
If both sides have clearly defined borders, blaming the other party for underperformance is impossible because either the failure was within your own responsible area or it was not.
It not only helps to determine the real culprit in case something goes wrong, it also forces the individual team to really make sure their part is fully effective and properly executed.
It avoids trouble afterwards and prevents useless, time-wasting office battles between the two important sides of the same coin.
Again this sounds very obvious but it gets easily overlooked in real life.
Blaming others will not only waste time and resources, it will also destroy company culture. And if people work for the same company, they should be expected to work together effectively and all pull in the same direction.
Especially higher positions like the marketing manager or sales managers are prone to start such turf wars when no one wants to admit their failures, and this is why there has to be a definitive responsibility for each of them.
Look at your sales funnel and your marketing strategy.
Define clear borders and tasks for each of them.
And then have them cooperate to reach combined goals.
Sales and marketing are the fuel that brings cash into the business, their combined job is to generate demand for your products and sell them.
These forces together are what keeps every business alive.
The best way is therefore to not only align these two functions but to also have them cooperate and create solutions for existing problems together.
Communication is what brings people together and builds bridges between different parties. Studies have also shown that people at the workplace tend to be more connected if their desks are closer to each other.
That means people from the same floor will have a natural tendency to be better off with people who work on the same floor as themselves.
Just as those whose offices are located next to each other will interact more and have a better relationship with each other.
Physical distance also creates emotional distance.
So if this should occur in your business too, then try to bring people closer together, literally. If both departments are located on different floors in a building, you automatically create a subconscious barrier between them.
Nobody wants to go “down” to the place where the salespeople are.
Just as nobody will be happy to move “upstairs” to the marketing people.
It appears like a totally different world for those involved, hostile and unknown.
Such seemingly minor decisions can make or break the cooperation between the two departments.
Both roles are actually two sides of the same medallion, and they need to be treated and combined as such for effective outcomes for you and your organisation. So make sure to bring people together.
Let both sides participate when making decisions. Let them work out projects together. And create clear distinctions between who is responsible for what, and in what way.
Using the Law of Large Numbers
We have already covered a whole article on The Law of Large Numbers because it is so important to understand in sales.
To make your business not just good in sales but excellent, it is necessary to also have a system in place to make sure you can not only produce great results but also to be able to predict certain outcomes.
Even if you continually do your best, your business will have to face difficult times and withstand them.
There might be a recession threatening the overall economy.
A large buyer of your business could declare bankruptcy.
Or a major competitor could start dumping the prices in your industry.
Even if today things might be running well, you can never know how they will continue and what might be around the next corner for you and your business.
Thus you will need to have a kind of modulator in place which will allow you to take direct influence on your revenues and increase or decrease them depending on the situation you are in.
With such a modulator you can boost sales and revenues when the going gets tough, and to lower it as you please in times when business is running great all by itself.
It will not only help you to weather the storm that you might be in, but also to adjust your growth and size of your business as well.
But how can you possibly do this when sales are often a mixture of luck and coincidence in most businesses?
Rule number one: Don't make your sales a mixture of luck and coincidence!
The most reliable system of that kind you will ever have is the so-called laws of large numbers.
And its use is actually pretty simple.
Jim Rohn already said it perfectly:
“If you do something often enough, a ratio will appear.”
That means in the activities you and your people are involved in, especially in sales there will be certain patterns that will take place over and over again.
These will become visible to you after a certain time of past business activities.
For example:
One salesperson might be calling 5 people on average in his past record until he gets one appointment.
The ratio is therefore 5 calls to 1 appointment.
That way you will already know unless that salesperson did make those 5 calls a day, on average he will not even have one appointment per day!
And so you as the manager will have to make sure that this person calls at least 5 people per day, to guarantee that one appointment at the end of the day.
Sure the results might vary, in some months people will perform better than expected and in others the same person might do worse than expected.
Sales means facing a new environment and new perspectives and obstacles day by day, so this is perfectly normal and should be seen as a given.
But over a long period of time, let's say a year, there will always be those clear ratios visible if you decide to look for them.
Now that you have made sure that your salesperson makes those 5 calls per day and has one appointment per day, you take a look at the past behaviour and results from those appointments.
The numbers might show you that the same person needs on average 3 appointments to get one sale.
Now if we add this data to the previous ratio of 5 calls for one appointment we get the following information:
5 calls = 1 appointment
3 appointments = 1 sale
Result: 15 calls = 1 sale
You now know that it takes this salesperson 15 calls to make one sale for your company.
The ratios might vary from person to person.
But the effect is the same: the larger the number of calls, the higher the chance for making a sale.
Clearly you can now add further variables to this calculation - as for instance the size of the deals and the resulting profit for the business.
Or you could look at the ratios of different people in your sales department and see who needs help, and where you can get the best ROI by investing in training for your people.
Having those numbers and behaviour patterns in place will allow you to create a predictable system for your sales, with the choice of fine-tuning every small aspect of it.
After you have looked at all the variables, you can now make a decent plan to predict your revenues for the next months or quarter.
The law of large numbers makes sales management easy.
But what you need for this system to succeed is a decent plan to also make sure there are always enough leads coming in for your salespeople to call on.
If you fail to bring in enough attention and people interested in your products, the whole system will fall apart. You have to provide the necessary value first before you can predict any results.
Sales will always be the driving force of your business.
The more revenue comes in, the more you can grow and expand.
And sales will always be dependent on the same few factors for all businesses:
the number of people you were making contact with
the number of conversations you had about purchasing the product
the number of deals closed
This is the most basic sales funnel that works across all industries.
Along each of these 3 steps, a certain percentage of potential customers will drop out.
You have to measure exactly when and where they dropped out and how your individual people are doing in those sequences.
The law of large numbers suggests that you will always get X people to buy out of 100 you are talking with.
It is basically just the average of sales activity, but it still allows very precise predictions in your business activities.
And there will always be at least one person buying out of 100, no matter the industry or the product.
If you get your ratios right, you can plan and predict your revenues - and therefore ultimately your success.
Test and see what works
As every business and every sales team are different, there is no surefire approach you can follow unfortunately to increase productivity.
But what you can always do is make use of the ideas in this article, test them, and see how things will work out in your business.
With careful examination you will definitely find the right things for you.
Stick with what works, and then move on to test more ideas.
Now it is your turn.
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