‘You must grow sales by 25 per cent this year. The future of the company depends on it. I wish you all the success. Go get ‘em.” This is the all-too-common story of the sales rep who receives an instruction from his sales director. After hearing it, he thinks to himself: “How am I going to do that?”
As common as this scene is, it is also understandable. The sales director has been instructed by the chief executive that he needs to double the company’s sales turnover within the next four years, so he is under considerable pressure to perform. Likewise the chief executive is under pressure from the board and shareholders, who have high expectations of the company’s performance.
So the sales director fires off the email to his sales reps of the results he wants.
While this form of “managing by results” may seem like the right thing to do, it does not include a plan, and that’s where many businesses with mighty revenue growth aspirations fail. Here’s why:
Results are attained by achieving objectives. Take, for example, the result handed to the sales reps: ‘sales revenue growth of 25 per cent’. To achieve that result, objectives must be set that support it. Objectives such as “grow new product sales by 40 per cent” and “expand into two new geographic markets within six months” are examples.
These objectives support the results you wish to achieve, and it’s clear that if the objectives are met, the results are likely to follow. This is a plan that helps to stimulate action, the last missing piece in the puzzle.
To achieve the objectives, some sort of action needs to take place. In other words, the objectives are not going to achieve themselves on their own. Action needs to happen. Someone needs to do something. But what? For the plan to be effective, the activities need to be spelt out.
Take the objective of growing new product sales by 40 per cent as an example. What kind of activities need to be done to achieve that? Perhaps a combination of new product training for the sales reps and activities to build awareness of those new products would be actions that would support that objective.
Digging deeper into what specifically sales reps should do in support of this objective, you might want to ensure that reps speak about the new product in each and every sales call, so that prospects become aware of the product. That’s a great way to use what sales reps are already doing (making sales calls), but adding one simple task (presenting the new product). If enough prospects are made aware of this new product in the right way, then some of them will buy it. And provided enough buy it, it will result in new product sales growing at the rate the company wants, achieving the “grow new product sales by 40 per cent” objective and getting the company closer to achieving the results its looking for.
So results, such as sales revenue growth of 25 per cent, are achieved by accomplishing a series of objectives, and those objectives are reached by carrying out a series of activities. The failure with many firms is in the communication of these objectives and activities. Management simply communicates the top line, but doesn’t provide much substance as to where to focus to achieve those results. Sales reps need to be clear on where they should focus so that they are all aligned and not chasing the wrong opportunities.
As a chief executive or someone responsible for a sales team, the next time you are faced with a challenging result that your team needs to achieve, remember to provide clarity not only on the results, but on the plan and how you’re achieving it. This will lead to the desired results.
Ahmed Al Akber is the managing director of Ack Solutions, a firm that helps companies improve their marketing and sales results