In today’s economy, many manufacturers are cutting anywhere they can in order to keep their operations out of the red. One area that often gets overlooked when trimming wasteful practices is the sales program. Michael Falkson, CEO of eti Sales Support, offers tips on how to improve the effectiveness of a sales program while keeping costs at a minimum.
Communication is key in any sales program and Falkson notes the most cost-effective way to generate new leads and maintain productivity is to go back to the basics of telemarketing and direct marketing communications.
“Targeted, high level calling has been proven to increase leads, improve sales force productivity and enhance ROI on marketing programs,” says Falkson.
By speaking directly with potential customers, Falkson says this can open up a dialogue that can help build new relationships and lead the sales people to identify exactly what customers need and help them find a solution.
Evaluate Your Marketing Program
Falkson also advises manufacturers to constantly audit marketing vehicles and evaluate what is working and what’s not.
“If your marketing department is wasting dollars on ineffective non-sales producing activities, then stop them. This will help capture wasted valuable dollars on marketing activities with no ROI,” says Falkson.
One such example could be costly trade shows. Typically, the return on investment from trade shows is lower than other marketing tactics. Prioritize which shows are likely to generate the most quality leads and ROI and eliminate those shows that do not.
This same tactic can be used for advertising budgets. Cancel advertising that is not generating satisfactory revenue and invest the funds in strategies that are doing well.
It’s also important to make sure the marketing department and the sales team are on the same page. For instance, Falkson points out that promotions for free or premium offers naturally drive a high volume of inquiries, but they are rarely effective in helping the sales force to sell more.
Follow through on sales leads is crucial, but without proper management some leads can fall through the cracks. A CRM solution that helps manage leads could be helpful to your sales force.
“Management of inquiries and follow through by the sales team is complex and requires a strong database infrastructure for effective control,” says Falkson.
Catch a Whale
Another way to improve the efficiency of your sales force and improve your bottom line is to encourage them to go after the ‘big fish.’
“It’s about quality, not quantity,” says Falkson. “Fifty to a hundred whale-sized prospects can be better than a million sardines.”
However, Falkson cautions manufacturers to carefully evaluate this tactic as it may not be right for everyone.
For example, if you’re a small supplier looking to do business with much larger firms, your sales force may spend a considerable amount of time and effort to prospect and land that ‘big fish.’ Most larger firms have more complex decision making processes and your sales team will likely spend a longer amount of time with them to generate a sale. If the goal is to generate more revenue in the short-term, then consider focusing on smaller companies with quicker turnaround times.
Don’t Spend More Than It’s Worth
When evaluating your sales efficiency, Falkson says to always remember that it’s not about cost per lead, it’s cost per sale. A higher upfront cost will likely return a lower cost per sale.
For instance, if your marketing efforts cost $10,000 for a $2 million sale, then your cost per sale is low as opposed to substantial -- for every $1 in cost, the return is $200 in revenue. However, a $10,000 marketing effort will clearly not generate any revenue with a $10,000 sale.
Keep Up Morale
One of the biggest challenges in a down economy is keeping up the morale of your sales team. And with the pressure to keep costs down but still bring results in a downturn, it’s important for manufacturers to find ways to motivate their sales force.
When pushing sales people to sell more, manufacturers often overlook the efficiency of how they sell. Making a certain number of calls in a day isn’t necessarily going to generate quality leads.
“The worst thing you want to do is just order your sales team to ‘sell, sell, sell.’ Help your sales team create an open dialogue with potential customers that allows them to better understand their customer’s needs,” says Falkson.
He suggests keeping your sales force productive and offer alternative means, such as using a lead generation company, to help them boost their sales.
“The sales team needs to be productive and there are only so many hours in a work day, but it’s also important to prioritize and focus on the people you want to do business with,” advises Falkson.
It’s also important to evaluate your products to ensure they are meeting the market’s current needs.
“A sales force’s ability to sell is uniquely based on your product’s strengths and quality as well as your company’s positioning in the industry,” says Falkson.
Out With the New, In With the Old
Falkson advises manufacturers to revive existing opportunities and inactive accounts. Look at companies that did not purchase from you in the past, but may now be interested today.
“Your existing customer base can hold a greater sales potential in the short term than trying to acquire new customers,” says Falkson.
With that in mind, Falkson suggests sales team nurture leads which are not yet ready to buy, and while that may take time, he says these companies can represent larger and more worthwhile opportunities.
Michael Falkson is CEO of eti Sales Support, a global business-to-business direct marketing and sales support agency. For more information, visit www.etisales.com