A recent survey of sales executives at more than 200 companies, conducted at the close of the first quarter, revealed continued concern about sales prospects in 2009.
At the end of Q1, only 29 percent of the reporting companies were reaching their year-to-date sales objectives, and only 59 percent expect to reach the annual goal by the end of the year. While 43 percent think sales prospects will improve for 2009, 19 percent are pessimistic and 36 percent "just don't know" what's going to happen for the rest of the year.
Here are four suggested actions, the one you pursue dependent upon your sales department's expected performance in 2009.
Growing. Congratulations! You are among a rare group of sales executives who are thriving in a down market. This is not the time to become overly conservative. Take market share, increase revenue, and grow your customer base. And yes, hire people. Your active leadership message is "keep up the good work." Keep your current performance management system. Raise quotas as necessary. (Surprisingly, the survey noted 12 percent have already raised quotas since the beginning of 2009.) Undertake necessary process improvement efforts. Make prudent investments such as an enhanced console Web-based sales reporting system for field sales. Add headcount to take advantage of this positive market opportunity.
Flat. Okay, things aren't so bad. While you aren't growing, at least you aren't declining. Your leadership message to the sales force is "stay the course." Run sales campaigns. Provide special rewards for top performers. Search and eliminate excessive "time sinks" in your sales organization. Cut unnecessary sales expenses. Hold off on hiring.
Declining but optimistic. Your results aren't where you would expect them to be, but you're still optimistic about your 2009 opportunities. You need to communicate this optimism to your sales force. Tell them to "be patient, things will get better." To jumpstart sales success, keep a weekly tab on sales funnel progress. Better yet, host telephone calls with your regions/districts to review the list of sales prospects and opportunities.
Help the sales force focus on the best sales opportunities and avoid sales prospects with low close chances. Delay any expensive investments, such as new IT infrastructure solutions. Trim marginal performers. Ensure your "keepers" don't "lose hope." If necessary, develop retention strategies for your best sales folks.
Declining and pessimistic. At the end of the first quarter, many companies are facing a dire 2009. There is no avoiding the consequences of this recession year. You need to tell your sales team to "brace for tough times." Overcome irrelevant measurement systems such as out-of-date sales quotas, use "stack ranking" measurements to reward best performers, and de-select the bottom performers. Increase sales productivity by offloading non-essential activities to lower-cost internal personnel. Freeze base pay increases for all personnel, both HQ and field. Swiftly reduce headcount to reduce the cost burden of the sales organization.
Sales force morale is not an economic condition, but a leadership imperative. Your sales force will be loyal and motivated if you are honest, communicative, and inspirational. Keep your team informed on what is going on. Let them know your view on the market conditions. Provide the leadership they expect from you. And take note of your next planning action: how to prepare for the coming recovery!
Note: To download a free copy of the "2009 Sales Quota Update Survey—Executive Summary," visit www.salescompsolutions.com.
David J. Cichelli is senior vice president of The Alexander Group in Scottsdale, Ariz. He can be reached at email@example.com.