Does the success of your business depend on quickly growing the top line?
Declining cash balances. Increases in borrowings due to reductions in revenue or gross margins. Bumping up against your banking compliance covenants. If you’re seeing any signs of operational deterioration at your company, it’s time to take quick action. Most people go into savings mode—but not every business can cut and save their way out of a bad situation. Increasing sales is also a key component to turning around a business and can have a more significant impact. In this edition of Executive Issues & Insights, we leverage the extensive C-Suite and Board experiences of the NextLevel team to learn about how to drive top-line performance in a distressed business.
Do not overly rely on the compensation plan
When sales are down, the comp plan is where most executives look first—but it shouldn’t be the first step. Changing a compensation plan can quickly change a salesperson’s behavior, but compensation alone will not maximize your sales productivity. If you hire the wrong talent, or do not have an effective training platform, the compensation plan will have marginal impact and might lead to wide productivity gaps between individuals on your team.
Document your sales process to find and fill gaps
To get top-line revenue moving in the right direction, first understand the business’ current sales process and its deficiencies. The key is to document what your teams are doing day-to-day, from marketing and lead gen right through pursuing and closing opportunities. Many companies have an intuitive understanding of the process, but the magic is in writing it down. This is how you will find misalignments in handoffs and responsibilities. Identify the bottlenecks where new business is getting stuck in the pipeline and focus on eliminating these blockages to allow revenue to flow efficiently.
Align your sales process to the buyer’s journey
No matter how efficient your sales process is, it will fall short if it doesn’t first consider how the customer buys. It’s important to understand the steps of the buyer’s journey and determine where each buyer is in that process before launching into a one-size-fits-all sales pitch. This allows the salesperson to present a more relevant solution. The company will also have a better idea of the deal potential, timing, and probability to close—which are essential for accurate pipeline management and sales forecasting.
Understand costs and price strategically
When you need to jumpstart sales, strategic pricing is an important tool. But you first need to understand your costs—fixed and variable—and how these numbers impact your profits. With a firm grasp on your variable margin and how much room you have to play with, you can clearly see your opportunities to increase volume by lowering prices—with tools like a tiered pricing structure or an annual volume rebate. This is especially important for manufacturing companies with idle capacity. The approach takes discipline with the sales team, however, as they instinctively want to sell Cadillacs with Chevy prices.
Continue investment in marketing
When times are tough, marketing is often the first function on the chopping block. But don’t cut the whole marketing and advertising budget—it’s necessary to drive the top line. You should also make sure you have the right marketing talent to optimize that marketing spend. If your business is at least $50M to $100M in revenue, you need a dedicated agency at minimum; but a high-caliber marketing employee can make a world of difference.
Achieve new visibility with your CRM
Most companies use a customer relationship management (CRM) platform—but many are not using it well. Accountability comes from visibility, and a CRM is a powerful tool to incorporate visibility into your sales team and processes. However, everyone must be committed to entering data consistently and correctly. And for true visibility into sales performance, the CRM must also integrate with your other key systems, including the ERP.
“There’s no switch to flip to quickly improve sales. Some things will give you a temporary bump, but they won’t be sustainable until you correct all of the elements that play together.”
—Bob Harmon, NextLevel Principal
NextLevel Case Study
From static revenue to $10M in new pipeline—in only 6 months
This $16 million metal fabrication company, in business for 23 years, was struggling to sell. Revenue had been static for 5 years, with only $2.75M recurring. The company had several independent sales contractors—but no sales plan or any measured business development activity.
They decided to bring in an executive sales leader, now a NextLevel team member, to assess the business and install the systems and processes they needed to increase revenue.
The sales executive analyzed the sales trending data and conducted a comprehensive assessment of the current sales process and systems. The assessment found significant deficits in each stage of the sales process, inefficient communication between dependent functional areas, and no assigned sales goals or key performance indicators.
He worked with the business to make the following improvements:
- Recruited and hired a dedicated sales employee and established key performance indicators (KPIs) to set expectations.
- Developed job descriptions to provide role clarity.
- Refined the specific activities in each step of the sales process to improve communication.
- Selected and installed a CRM system to support new business development activity, capture key customer information, and track orders.
- Developed a custom sales dashboard and consistent reporting to monitor key metrics, pipeline and sales forecasts.
- Redefined a focus to sell through architecture and engineering firms to expand the services/revenue per job and increase recurring revenue.
- Developed a “Fabrication Insights” education program to support new business development and establish significant pipeline revenue
It didn’t take long for their efforts to pay off.
In only 6 months, the company generated $228,000 in new revenue and achieved $10 million in pipeline revenue. In addition to new revenue, the company saved over $25,000 in commission and reduced lead generation costs by 50%.