Sales Success The Perfect Formula from Jonathan FarringtonYou can read more from Jonathan over at his award winning blog The JF Blogit, which attracts thousands of visitors every day, and of course you will constantly find fresh resources on Top Sales World.
I had the pleasure to sit down and chat with my colleague and friend Jonathan Farrington. Jonathan is Senior Partner for Jonathan Farrington Associates and CEO of Top Sales World, based in Paris and London. We discussed upcoming initiatives for Top Sales World (TSW) as well as what Jonathan sees on the sales horizon.
DM: What exciting things are in store for TSW?
JF: Well, as you know Dan, in 2012 all of our Top Sales initiatives were brought under one roof to become Top Sales World. We’ve seen exciting new beginnings since then. This year we launched our radio show Top Sales Hard Talk where we host 10 – 15 minute interviews with industry experts about current hot topics around sales.
Last month marked the launch of the Top Sales Academy. Since the economic downturn we recognize that companies have cut back on training for salespeople. I predict that this year about 50% of salespeople will miss quota due to the cut back in sales enablement and training. Recognizing this and the prohibitive cost associated with some training programs, TSW launched the Top Sales Academy at “free for all” cost.
Later in the year we will be creating the most rigorous survey the sales space has ever witnessed, and in 2014 we launch the Top Sales Conferences. But let’s also remember that we still have the Top 50 Sales & Marketing Influencers list to announce in June plus of course the Top 50 Sales Blogs and the annual Top Sales Awards. So a lot going on!
DM: What should sales executives be preparing for as we look forward?
JF: I’m surprised by how many companies, even large ones, don’t have a detailed plan. They don’t have a business development strategy. Last year I released a business development strategy white paper expecting most people to download it in October or November planning for the new year, but in fact found people downloading it in April, so they were planning their business development strategy for the new year, with almost a third of the year behind them. It is essential that we remain focused and balanced in planning our business for the year.
Balance is so important in the equation. As mentioned earlier, companies have drastically cut back on sales enablement and training. On a balance sheet this appears as a cost, but the really forward-thinking companies have continued to see its benefits and when the economy picks back up they will be far ahead of their competition. I liken it to a large machine shop. You can’t close up a machine shop for three years then come back and turn on the machines and expect them to all be working well. It just won’t happen. It’s the same with our sales teams. For three to five years now they have been neglected and we can’t expect to flip a switch and have them working efficiently again. It is imperative that we give this aspect of our business the attention it needs. At the end of the day we rely on sales, so it’s a shame to see them not receiving the training and development needed. The ASTD says that for every dollar spent on sales team development you can expect $100 back in incremental revenue. That’s a no brainer to me.
DM: I know customer retention is something near and dear to you. What are your thoughts around that?
JF: Most companies want to brag about their services and team. One of my favorite things to ask them is their level of customer retention. I ask what their rate of retention is and if I called their clients what would they tell me about the company. This leaves most executives speechless. It costs 15 times more to first locate, then qualify, then sell to a new prospect instead of an existing client. The companies that are investing so much in constantly finding new customers are allowing existing customers to fall out the back door. 70% of companies who completed a survey about why they switched suppliers answered that it was because they felt ignored. We become complacent thinking if they need something they will call us and we’re missing such a huge opportunity.
About 80% of our business comes from existing clients and 20% from new, yet, companies spend about 80% of their time going after new clients and only 20% following up with existing.
DM: Is there something that companies today are overlooking that warrants their close attention?
JF: A favorite saying that a friend once shared with me is, “A successful company always drives for revenue, but they putt for profit.” In 95% of companies, most people outside of the C-level don’t think about cost and saving money. If you ask how much a lead costs no one knows. Then ask how many meetings were arranged and other expenses to enable that sale—no one pays attention. When you consider the cost of making a sale I think most companies would be surprised to find that they really haven’t profited, but most companies don’t know this because they look at gross profit instead of net margin.
I feel that at my company, it’s like family, no matter what your position you have as much responsibility as I do to look out for the budget and what’s best for the company. Don’t just leave it to the men in finance. If you do that then there won’t be a company to leave to the men in finance. The perfect business strategy is that each year if you can reduce costs and increase profit then it’s a success.
DM: Are there any last items that have been on your mind?
JF: Leadership. If there is one huge black hole in most organizations it’s leadership. If you show me an underperforming sales team I will trace it back to a poor sales manager. They don’t have the skills and commercial bandwidth and have been inappropriately trained. Most have been put in this position because when the job opening came along they were given the role because they were the most successful salesperson at the time. This is such an error because they’re two completely different positions. I don’t blame the person wholly; these companies assume if you know how to sell then you know how to manage.
Companies need to train these new sales leaders and give them the necessary skills before they’re put in the position. TSW is doing what we can to address this issue with the Top Sales Academy. If a sales manager asked me what they should do to improve themselves besides getting the right coaching and training, I would advise get it right at the front end. Hiring the right people is crucial and if not done right can be a costly mistake. Don’t base your hire on a subjective interview alone. Talk with previous employers, existing clients, and run profile assessments.
The best sales managers have a turnover of about 1% – 2% per year. If you have a team where 80% of the team is making quota then you’re doing great, but the reality is that on most teams it’s 20% of the team making up 80% of the sales. Every time a salesperson fails, we as a sales manager have also failed because we were hired to train them, coach them, and manage them.
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