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If they’re that bad, how did they get where they are?

18/11/2010 | Tell tale signs

As a result of the Sales Due Diligence work we provide I was introduced to a new business last month. They have done well to grow from start up 12 years ago to a business turning over tens of millions and earning good profits today. However, on closer inspection it became clear that they had done so almost entirely without any sales or sales management discipline! When we reported this to the investors they weren’t surprised but it did beg the question, ‘if such disciplines are so important, how had they managed without them or do they in fact really matter if you get the product right?’

In reality, the business had done really well because it had developed a strong service in a new market and had consistently delivered on its promises to build loyalty and business referrals. There were some strong relationships that helped too and demand had remained strong for many years. Now it was time for the vendors to ‘crystallise some of their value’ and scale the business to access the next phase of growth. Its this issue of scaleability that best illustrates the weaknesses in the previous approach.

Whist they had won over a significant part of the market, it became clear that they had also ignored some sectors and educated others for their competitors to move into, as they too, developed. Without clear and properly managed direction for their sales activity, they missed out on big parts of the early stage markets. Coupled with a willingness to let customers buy however many of their service lines they chose (with no previous attempts to cross and/or up sell) they had in fact grown a business at around half the rate that they could have done! In addition, they had no metrics to help them understand the ‘cause and effect’ of sales activity and therefore no measure of the size of sales resource needed to grow the business further. Finally they were now operating in parts of market where new sales were largely ‘conquest’ sales and customers needed a far stronger case to buy from them than had previously been the case.

The good news is that provided the necessary disciplines are put in place post investment, there are still some complementary markets that new services can be actively sold into and new developments are expected to give them a real edge for the next couple of years. Understanding how to make the most of this through selling its real value (rather than having it just bought) and being able to put the right size of resource in place at the start are much more likely to make the most of the available opportunities in the coming months and genuinely underpin the planned growth. The initial expectations that moving into larger accounts (not that they understood the challenge this really represents in sales terms) and being able to offer an improved product to their existing customer base would be enough proved wholly unrealistic.

More of the same isn’t going to cut it but we’d suggest proper sales management will yield a greater upside than even the IM had suggested!

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The Sales Blueprint team brings to bear over 60 years successful business-to-business sales and marketing experience in a variety of sectors ranging from new technology / software and start-ups, through food, medical, traditional and hi-tech manufacturing and stretching as far as care homes and mental health provision.

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