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What Can the Sales World Learn from 2012?

We’re three months into the New Year, so most businesses have turned their attention to the challenges (and opportunities!) that 2013 will inevitably present.

And why not? Whether you killed it last year or struggled to live up to your lofty expectations, 2013 presents new hope. The economy seems to be showing signs of life, and both B2B and B2C buyer behavior is trending upward in many industries.

But let’s stop for a moment and reflect a bit on 2012. After all, the only way to really improve in 2013 is to better understand what held us back last year and what we need to avoid doing going forward.

So, what’s the biggest sales lesson we can learn from 2012?

Avoid sales whiplash™ like the plague.Be cognizant of it. Constantly look for signs of it. And course correct before you fall into a very dangerous sales trap. Because if sales whiplash goes unnoticed or untreated, it will cripple your company before you knew what hit you.

 

What is Sales Whiplash™?

What I call “sales whiplash™” you might refer to asboom and bust revenue production, fluctuating sales performance, or underperforming sales teams.

The most obvious symptom of sales whiplash is your company crushing its revenue targets one quarter, only to fall completely on its face the next. It’s a proverbial roller coaster ride that – unless you like drama, uncertainty, and unpredictability – isn’t much fun to ride. Just imagine going up and down hills at 100 miles per hour one moment, only to come to a screeching halt the next.

That’s not at all what I’d call enjoyable, efficient, or productive.

Ideally, sales team performance should follow a smooth, upward path that yields a perpetual sales boom. And that boom doesn’t have to be – and shouldn’t be – followed by a bust on the other side.

But that’s exactly what sales whiplash is – a boom one quarter, a bust the next. Ultimately, you might still end up hitting your annual revenue targets, but even if you do, the side effects of sales whiplash will reveal themselves eventually.

 

One Example of Sales Whiplash™

Recently, I worked with a client that had two sales teams selling into two very different markets. Team A sold very big multi-million dollar contracts that spanned multiple years. Team B sold smaller, faster transactional deals.

For much of the company’s life, profits were carried by two very large deals that Team A had closed. Team B, by contrast, never really delivered on its targets, but nobody caredbecause Team A’s success overshadowed its underperformance.

Then, in Q3 of one year, the company encountered a major problem. Its larger annuity contracts were going to end and not renew in January, and its smaller transactional business wasn’t delivering enough revenue to counterbalance the loss. In fact, only 10% of Team B’s pipeline was in place to secure deals in January.

You can probably guess what happened.

The company didn’t have enough time to react (sales whiplash), and the bust that followed its boom wasn’t fixable. Ultimately, sales teams and VPs were fired, and it took the company an entire year to rebuild its pipeline and revenue.

 

4 Causes of Sales Whiplash

Unfortunately, the example above is just one of several that I could share.

And as much as those companies would prefer to believe that their sales whiplash was caused by fickle markets, new competition, underperforming sales reps, or other extraneous factors, the truth is that it wasalways self-inflicted.

Yes, sales whiplash can be caused by those things, but those causes areoften symptoms of some much bigger internal problems. Specifically, there are four core causes of sales whiplash:

1.      Sales leadership and individual sellers only focused on one aspect of client engagement.That’s a critical mistake. Every part of client engagement – attraction, participation, retention and leverage – is important to long-term sales sustainability. For instance, if your salesperson closes a deal and then passes the customer off to someone else for onboarding (during the participation phase), and then never speaks to that customer again, they are opening the door to sales whiplash. Why? Because it becomes nearly impossible to ensure customer satisfaction when no one person is monitoring them throughout the entire engagement process.

If customers aren’t satisfied, they won’t be retained. If they are not retained,whiplash is likely. Every individual in your sales organization – whether it’s one person or one hundred – must sync up to ensure that every aspect of client engagement is given its due attention, and that the customer is never left to its own devices.

2.      Sellers only nurture one buyer relationship.To protect and retain your customers, you have to expand your breadth of relationships inside an organization. I saw too many clients in 2012lose business that they should have won because they were the incumbent; they hadn't built out a broad base of support. These sellers were relying on a single decision maker, only to find out that person was either influenced by his colleagues or people below him, or he left the organization altogether. And when you lose this “easy” business, it naturally causes sales whiplash because you’ve got to make it up with new prospects, which take time to close and require capacity you might not have.

3.      An overemphasis on closing. Now, before you freak out and think, “what the heck are we supposed to be talking about or emphasizing,” let me explain. You have to put equal emphasis on attraction, closing, and engagement. If all you say to your sales team is, “close, close, close,” and you stop paying attention to the front end of the sales cycle, you risk having an empty pipeline the next month or the next quarter. And, when you do that, you create these booms and busts in sales production. So, I'm not saying don't focus on closing. I'm saying don't stop focusing on other areaswhile you’re closing.

4.      Sales teams favor one product or service line at the expense of others. Sometimes you do this by accident. Perhaps because you receive directives from above stating, “sell this new producthard at launch, we want to make a big splash.” Or, maybe you have a new product that’s exciting and easy to sell, so you focus on that and stop paying attention to other lines of businessthat create consistent revenue. Sometimes, it’s purposeful because one line of businesscloses more quickly or results in bigger deals. Other times, it happens because you believe in one product line over another.

Either way, favoring one product or service is a big mistake. That singular focus naturally creates holes in your pipeline and booms and bustsin your revenue production. Different products have different sales cycles. To create a perpetual boom of revenue you need to focus your team (and pay them) to attract and retain customers across all lines of business. If you don't, you’llcreate bow waves of revenue rather than a consistent flow, and put your neglected business lines at risk of losing market share

OK, you should have the gist of Sales Whiplash™ and what causes it. Doing any one of the things listed above will cause sales whiplash, and trust me when I say that it’s not something you want to experience in 2013 if you didn’t go through it in 2012.

The best companies last year were set up so that the whole sales organization was focused on all four areas of the client engagement – attraction, participation, retention, and leverage. They closed new business, brought customers onboard quickly, retained, up-sold, cross-sold, and created new opportunities.

Not surprisingly, that will continue to be critical to sales success this year, as well – and, frankly, every year for the foreseeable future.

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