Publicity February 2016

The death valley of sales

The Sell Japan Series

Sales cannot run like a manufacturing production line. It is more like an artisanal pursuit, closer to art than science. Yet, every sales force has targets that are usually uniform. Each month, they have to deliver a specified amount of revenue, rolling up into a pre-determined annual target. The construct may be logical, but sales is far from logical, as it is steeped in emotion, luck and magic.

Having said that, sales is also a numbers game and, to some extent, pseudo-scientific. There are accepted algorithms that apply. You call a certain number of people, speak in detail to a lesser number, meet a few and, from that residual group, you conclude an agreement.

There are ratios which, when calculated over time, apply as averages linking activity with results. So we call 100 people, speak to 80, see 20 and strike a deal with five. In this construct, to make one sale, on average we need to call 20 people.

With this type of precision available, you would think that we could industrialise the sales process and confidently set annual targets, neatly divided into units of 12, to arrive at a consistent stream of revenue achievement.

Sadly, it doesn’t work like this. Sales flow is without rhyme or reason: some months we exceed the target and other months we miss it completely. Some sales people are consistent producers and others are unpredictable, while some are annoying because they don’t seem to be doing much. Why is there this perplexing inability to automate the production of results? The valley of sales death is the problem.

This is the plunge between sales peaks. It is the lull in the fighting, the quiet before the storm, the brief interlude in the war of sales. Sales people work hard, usually because they are on commission structures that guarantee not very much if you don’t get results.

Japan is a little different—basically the system has either a base salary and commission or salary and bonuses. Few sales people in Japan are on 100% commission. Why? Because they don’t have to be and the Japanese preference for risk aversion means forget it.

Commission structures vary, but many industrial structures specify that you have to hit a monthly or quarterly target before your commission kicks in. If this is too industrial, it may fail to take into account seasonal downturns, because each target unit is the same throughout the year. This is hardly motivating and probably needs a bit more nuance around expectations and reality.

Sales people cannot be consistently successful unless they have two great professional skills. They must be machine-like time managers and highly disciplined. The two interlock. The ebb and flow of sales is based around customer activity. Networking, cold calling, following up with previous clients, chasing leads that come through marketing activities and so on takes time.

If we do enough client contact activity we will get appointments and sales, thereby generating follow-up. Time starts to disappear from the mining activities that made us active in the first place. We can’t do the prospecting work, because we are too busy executing the follow up. Once the fog of being busy clears, though, we suddenly see that we have a very pitiful pipeline ahead of us so we work like a demon again to kick-start generating new leads.

Downturns in activity lead to massive holes in revenue. This is the death valley of sales. It is the messy counterpoint to industrial sales production, which is consistent, uniform and, when graphed, is balanced and ascetically pleasing to upper management.

To avoid this phenomenon, we need to make time to keep prospecting every week. Sales people who do not block out time in their diaries for prospecting every day will be death valley dwellers in short order. They will be joined there by those who don’t plan their day in detail. That means planning the necessary activities with numbered action priorities.

Failure here is permanent, because the consistency of production will elude us forever. We will get lost in the harsh environment of the valley and perish by the wayside.

Let’s commit to build the pipeline every day and avoid the valley of sales death at all costs.