Last week I was speaking to a colleague and that was the main topic. ‘The Sales Prevention Department’, is this you?
In this article, I’ll try to be nice and answer: Who is this? Why? How does it play out? And what is the impact on the sales team, sales managers, and where the rubber meets the road, in day-to-day sales calls?
However, this is a warning – this article is not for the faint of heart. All the names have been changed to protect the innocent and the guilty.
Maybe you recognize an example similar to this one? A very large distribution company lost 40% of its 1st quarter sales because a Leader in Operations decided it was cheaper to ship with a different carrier. This decision was driven by the C- suite to cut costs partly because the current economic drivers and the way it is disseminated by the (News Media) creates confusion. Sales for this organization were also down 8% for the first quarter of ‘23. This is also partly because the products and services they provide are no longer in great demand. Demand dropped a while back when the PPP and the Government handouts dried up. But it took many months to show up on the balance sheet. This caused a lot less expensive luxury items like boats, planes, and toys to be purchased and used. Gas is up significantly as well which means the products and services are not as in demand because it’s cheaper to look at your boat on the dock or fly first class than pay for fuel. That is another topic we will not go into here.
It’s not just the big toys. Average Joe/Joline is paying more for eggs and clothes to take care of themselves and their families. Mortgage rates are up so fewer houses are being sold. In other words, there is less money in the economy today than when this company was experiencing double-digit growth the past 2 years. I agree with the decision to cut the fluff and survive this next period. I don’t agree with the mandate to cut without considering the impact of the cuts on the health of the sales department and the impact of putting long-term relationships in jeopardy.
Example 2. A large Telcom company provides training from external resources, (like me), for Sales Managers, Sales Staff, Sales Enablement, and SVPs for three years with an average increase per salesperson within 120 days of 25-30% in monthly recurring revenue. This is an exponentially huge ROI considering a couple of hundred sellers, the average life cycle of a client and not to mention leadership was empowering sales instead of enabling them. (You do the math). Then a rough 1st quarter of ’23 and the C-suite meets and then mandates are made to cut non-essentials. However, whoever is in charge of ‘Corporate Image’ is better at selling internally than SVPs and Sales Leaders. What did you say? Yeah, they cut sales development but spent several millions of dollars on donations to the community to make themselves look better. While this may create brand awareness and soften the market, the newer salespeople and the newer Sales Managers are having to deal with price increases and win rates are now down significantly. When you are the price leader and you raise prices but your sales team is not capable of asking the right questions to create value, they have to compete on price. The Sales Managers accept excuses because they make excuses and they don’t know what they don’t know. They don’t know how to coach to help salespeople to take responsibility and identify what they could have done differently to get their desired outcome. So, their revenue is down, and their stock is down because some bonehead in marketing internally sold a campaign to create brand awareness. The decision was made without thinking of the day-to-day, face-to-face, voice-to-voice of salespeople, Sales Managers, new client acquisition, and revenue.
I could go on for days about the STUPID decisions I’ve seen made by leaders who are protecting their fiefdom and lead the Sales Prevention Department. But instead, I’ll leave you with this.
If you had a farm with all types of cash-producing animals like cows, sheep, pigs, chickens, and 2 Golden Egg Laying Geese, and the bank said you have to reduce your expenditures by 20%. What would you do? I hope first you would identify which farm animals carried the most expensive. Then, I’d hope you’d identify which ones bring the most net profit. Then get rid of the most expensive and least profitable.
So here is the final question: Would you stop feeding your Golden Egg Laying Geese?