How to Spot Hidden Opportunities for Sales Growth

SEPT15_17_573930617

In the hunt for sales growth, profit growth, or share growth from the sales force, every sales leader, whether new or seasoned, whether from a growth-stage or a mature-stage company, faces the same question. Where will the growth come from?

The best answers are frequently unearthed by looking at differences in performance, sales activity, and market potential across different pieces of the business — certain customer segments, selected products within a broad portfolio, or specific groups of salespeople. Better analytics, as well as improved data storage and organization technologies, are enabling companies to get more creative in the way they analyze data to discover and take advantage of these hidden pockets of growth.

Here are several examples:

Novartis gets more out of its average performers. Working first with the U.S. sales force, global healthcare company Novartis identified a group of salespeople who were outstanding performers and isolated a set of behaviors that differentiated their performance from that of average performers. The company developed a new sales process that was derived from the behaviors of the outstanding performers, and it aligned sales hiring, development, and other programs to support the new process. A key part of the initiative was a selling skills training program called Performance Frontier — The Next Generation in Sales Excellence. In a controlled study, newly trained previously “average” salespeople realized twice the growth rate in sales when compared to a control group of “average” salespeople who were not trained on the newly identified behaviors. Based on this success, Novartis replicated the approach globally.

A manufacturing company accelerates growth among new hires. A manufacturing company tracked performance of salespeople over their first 20 months with the company to understand how quickly new salespeople became effective and why. A key finding was that the quality of the first-line manager (FLM) had a large impact on new salesperson performance. Salespeople reporting to top-performing FLMs performed much better in their first 20 months on the job compared to salespeople working with average-performing FLMs. Top-performing managers did two things that contributed to the performance difference: they spent more time coaching in the field and they arranged for mentorship from experienced team members. Based on these findings, the company established new coaching expectations for FLMs and implemented a tracking system to ensure accountability.

A medical supply company boosts profits by reallocating sales effort across products. A medical supply company had several products in its portfolio. The amount of sales time devoted to each product varied by salesperson. By analyzing differences in the amount of time that salespeople spent by product and the resulting product sales and profits, the company determined a vastly improved way to allocate sales effort across the portfolio. The company aligned the incentive plan to reflect that effort allocation, and educated the sales force about how to spend sales time in order to optimize performance. The result was a measurable increase in sales and profits without any change in sales force headcount.

A business services outsourcing company improves performance in non-metro geographies. A business services outsourcing company compared performance of its 50 least urban (i.e. non-metro) sales territories to that of its 50 most urban territories. Sales per territory averaged $1.2 million in both groups. Yet when compared to urban territories, the non-metro territories had 79% more prospects and 49% more overall market potential. Salespeople in urban territories visited good prospects on average four times a year; but in non-metro territories, that average was just 2.8 visits. Salespeople in non-metro territories were not realizing opportunities because they were stretched beyond their capacity. The company reduced the size of non-metro territories and assigned coverage of many prospects in outlying areas to an inside sales team. This led to increased market share, reduced travel costs, and improved sales force effectiveness outside of metropolitan areas.

A telecom company gets more business from its low performing, high potential customers. A telecom company took advantage of an emerging way to hunt for opportunities by using a collaborative filtering model, similar in concept to algorithms used by companies such as Netflix and Amazon. The company found “data doubles” for low performing, high-potential customers – i.e. other customers who had a similar demographic profile (for example, the same industry and scale), but who were buying much more. The company analyzed the purchase patterns and sales strategies at these more-successful data double accounts and shared the insights gained with the sales force. The information enabled salespeople to improve targeting of the right products for under-performing customer accounts, thus driving stronger uptake of new product lines and dramatically improving the realization of cross-selling and up-selling opportunities.

Together, these examples provide great lessons about how to find sales growth opportunities. It’s not enough to look at aggregate performance across the sales force; aggregation hides insight. Finding opportunities requires observing and understanding differences within specific customer segments, products, or groups of salespeople, including differences in:

  • Performance outcomes. Novartis observed that salespeople with similar market potential had dissimilar sales results, and realized opportunity by understanding what those salespeople did differently. Similarly, the manufacturing company observed performance differences across new hires and the telecom company observed differences across demographically-similar customers.
  • Sales activity. The medical supply company observed that salespeople allocated time differently across products, and realized opportunity by understanding how these differences affected sales.
  • Sales potential. The business service outsourcing company observed differences in territory sales potential and realized opportunity by understanding the impact on sales activity and results.

Companies will always be thinking about their next source of growth. Today’s world of big data enables companies to creatively slice and dice historical sales force data to find new and better sources of insight.

Go to Source