Use these 4 steps to get back on track after a big revenue miss.
Sooner or later, every company will face the unsavory prospect of missed sales numbers. Falling short of a quarterly or yearly goal feels terrible, but it also gives you an opportunity to root out the problem and get back on track.
Take these four steps when you find your sales coming up short.1. Don't Take Action ... Yet
When you don’t make numbers, the impulse is to do something decisive—right away. But ordering a charge of the light brigade before you know the real problem is a formula for failure.
Unless you are deploying the correct solution, employees will often intuitively know you’re taking the wrong course. The resultant loss of faith in management will only earn you even weaker sales numbers and reduce team morale.2. Determine What Really Went Wrong
Typically, figuring out why you didn’t make sales numbers in a quarter isn’t an easy task. Especially in complex businesses, blame may be cast from department to department. Pinpointing where the problem is as soon as possible will help minimize inter-department strife—and remember that sales shortages are not always the fault of the sales department.
In one company I worked with, a shortfall was initially blamed on the sales force, but a closer look revealed that a back order of a minor product resulted in lost sales for a whole range of dependent products.
When you face low sales numbers, your first task is to roll up your sleeves and dig for the source.3. Improve Your Metrics
We all tend to use metrics as a rear-view mirror—but the most successful companies use metrics as tools to improve performance and prevent future shortfalls.
For example: One company I worked with saw that its metrics showed a correlation between a rep’s length of service and the amount of sales he or she closed. The sales management improved compensation packages to reduce rep turnover, thus increasing sales. This metrics-based action helped them exceed their numbers every quarter and improve their sales forecasts.4. Set Up Systems to Hit the Numbers Every Quarter
Powerful companies develop systems to manage the quarter. This means knowing what business levers to pull to bring in the numbers.
For example: You may put a system in place to ensure that all back orders get delivered before the end of a quarter, ensuring that you bring up sales numbers before the deadline. Or you may try a new plan to convince customers to place orders now instead of later in the year.
At one company, I found that increasing the sales force by a given percent resulted in a sales increase of double that percentage six months later. With this knowledge, the company could beef up the number of sales reps in time to make year-end numbers.
Next time sagging sales have you down, use these four steps to make sure you don’t end up back in the same spot next quarter.
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