Your numbers never lie. If your sales are falling short of the targets you’ve set, it’s going to be right there in black and white—and maybe even some red.
The reasons for those shortfalls, however, are often mired in gray areas among your people, your processes or your vision? It’s no wonder struggling CEOs have so much trouble identifying the source of issues. Better questions lead to real answers. If your sales are running short, begin by asking these seven questions to bring into focus your problems and potential solutions.
Why do you think your sales are falling short of plan?
“Why?” can be a very powerful question, as long as you don’t settle for the first answer. The 5 Whys technique pioneered by Toyota forces you to drill deeper into your issues until you’ve identified the root cause.
- Why did our sales fall short this month? (We made fewer sales.)
- Why did we make fewer sales calls? (We had fewer leads to work.)
- Why did we have fewer leads? (We sent fewer email offers.)
- Why did we send fewer email offers? (We were short staffed.)
- Why were we short staffed? (We didn’t plan well for two people who were on vacation.)
Bingo. Turns out your sales problem isn’t a sales problem: It’s a staffing problem. Now fix it.
What are the three or four specific and measurable activities that you are measuring every day, week, and month that drive your top line growth? Can you show me the report?
It’s shocking how many blank stares I get from struggling CEOs when I ask these questions. That tells me the problem runs deeper than a lack of sales. The problem is a lack of vision. If you were clearer on where you wanted your company to go, you’d have the steps in place that will get you there. So go back to your Crystal Ball. It’s three years in the future, you’re standing in the middle of the biggest party your company’s ever had, and you’re celebrating. What are you celebrating? What is the big target you hit? Once you have that big vision locked in, write down the measurable, actionable steps you took that led to that result. Bring that list to your leadership team tomorrow and get cracking.
How are you holding yourself and the sales team accountable for hitting the numbers?
I like great big scoreboards posted in the office, where everyone on your team can see the company’s progress. That kind of visibility keeps everyone accountable and focused. But you, the CEO, need to be held accountable, too. Check in regularly with trusted members of your leadership team, mentors and your coach to make sure you’re acing the key tasks only a CEO can manage.
On a scale of 1 to 10, how effective do you think your sales leader is?
Why do you rate him or her at that level? What do you think it would take to make that person rate as a 9-plus? Do you think this person is one of the best in the country in that role? What would it take for them to be the best in the country in that role?
7? 8? Can you coach this person up? 6 or lower? Why is this person still working for you? Top companies hire top talent. They don’t fret about paying for a top salary. They identify the best people in the business and make the proverbial “offer you can’t refuse.
Is your sales team properly trained and equipped. Do they understand your sales goals? Have they adopted them?
Forget all those emails and bulletin boards. There’s only one surefire way to make sure your staff is working toward achieving your goals for the company, and that’s with an annual planning session.
And no, you can’t run this session on your own. Bring in an outside facilitator like a CEO coach to run the session. Doing so sends an important message: you, as CEO, are doing your part to right the ship and set sail for BIG.
If you participate rather than facilitate, chances are good that your staff will be more open with their feedback, and much more receptive to the plans you put in place.
Is your sales compensation plan 100% aligned with the sales results you are trying to achieve?
To quote my good buddy and colleague Chris Larkins, “Your salespeople are going to do exactly what you compensate them to do.”
A one-size-fits all sales comp system allows your sales people to follow the path of least resistance to their commissions. Make sure your sales comp is focused on your goals for the company, not your sales team’s desire to get paid. Consider a 50/50 salary and commission structure.
Incentivize new sales that boost your earnings before interest and taxes (EBIT) and broaden your customer pool over small repeat sales to existing customers.
Who are your best customers and how are you taking care of them?
Five-star customer service, including speedy product delivery and billing, are the important day-to-day considerations.
But the customers who can make or break your business aren’t just customers—they are key relationships that the CEO has to own. When was the last time you took your big buyers out for dinner, or offered some marquee sports tickets? Strengthening those bonds strengthens your business, and can lead to new opportunities, new connections, new products and new markets. As for your smaller customers, what percentage of their business do they do with you? Can you bill in advance annually or create a loyalty program to get those sales up?
If you ask these tough questions, you’re going to arrive at solid answers. Some fixes might be as simple as streamlining your billing process. Others will be hard, like replacing popular but underperforming sales people. But if you ignore the conclusions that these seven questions lead you to, you’re just headed for another round of sagging sales, more questions and more trouble.
Mark is an EO Orange County member. His firm coaches more than 160 of the world’s top high-growth entrepreneurs and CEOs from 20 countries. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity.
Mark Moses has been an EO member since 1995. Check out why successful enterpreneurs like Mark have chosen to join EO.