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How do you increase sales in an economic downturn? 28/May/09 (Business)

How do you increase sales in an economic downturn?

Most companies I talk to are still in a state of shock! How did this recession come on so fast? What is the best tactic to protect and improve our position?

For many businesses, the days of effortlessly relying on a steady and secure sales income appear to have gone, and with a shrinking pie, it has never been more important to protect and increase market share.
As some businesses are battling to stay alive, still others are trying to avoid slipping backwards by just holding on to what they have. The temptation to cut corners and costs appeals to far too many, and many have tarnished their businesses as a result.

While it is true that the overriding principle of business is to make a profit, different companies opt for different solutions; but it is always vital to ensure that your actions are positive, that they have a positive effect on your staff, your business and your results.

There are many ways to deal with this unprecedented and difficult climate, but the most important thing is to ensure you take the right action for your business.

Some common decisions:

• Make redundancies in the sales team.
• Focus on selling higher margin products.
• Cut costs in the marketing budget.
• Optimise the distribution operation.
• Remove higher salaries from the business.
• Focus on maximising sales within the existing customer base.

Many factors need to be taken into consideration, but without continuing to optimize customers and sales, any cost cutting and other often drastic actions could cease to be effective or fail to deliver the desired results.

Don't be fooled into thinking that some of your favourite and long term customers will always buy from you. Did you know that if you are in wholesale, manufacturing or distribution, on average your "Loyal" customer will be buying from 4.5 other suppliers and buying products they should be buying from you.

Customers love to cherry pick, especially in this climate.
It is believed that the cost of new sales is nearly 8 times more expensive than to keep and look after existing customers.

The answer is not only to ensure that you look after your existing customers but that you also identify the potential additional sales within your existing customer base.

To do this your sales people need actionable information - not just gut feel and a good memory. The types of information your sales reps need to be looking at may seem somewhat obvious i.e. who's buying product A but not product B? Why has this customer stopped buying a core product from us? Who's not bought so far this month? Where can I sell higher margin product?
But how easy is this information to get at? If you have hundreds of customers and thousands of products and your sales reps don't have a degree in I.T or database management, then I would suggest it's not easy at all!

Your business relies on its IT infrastructure to ensure accurate accounting for stock, monies and for invoice production. What Financial Director or Controller could live without it? Technology and the accountant are seen as complementary. I would bet there's not an accountant in the land who could live without a spreadsheet.

We spend tens of thousands of pounds supporting the financial side our business but seem to loose focus when it comes to our sales force which for many businesses is possibly their most expensive resource.
Fortunately the time and money spent on your ERP (Enterprise Resource Planning) system means that you can double the benefits through use of intelligent information. Your sales people could now have the knowledge needed to increase sales.

So what now? What are the choices?

Do you let your sales people spend valuable selling time trawling through data looking for sales opportunities, or do you let them out on the road, or hit the phones blind? Obviously few would do either through choice. This choice is simply the inevitable consequence of having to deal with a huge volume of data. But managing data is what computers are so good at, so it makes sense to look for a way to use IT to improve the working life of the salesperson by removing this need to compromise.

Sales intelligence (S.I)

Successful sales depend on identifying the right opportunities and delivering the right package. A sales intelligence solution will automate the extraction of this knowledge and deliver it to your sales people.

Sales intelligence software monitors and analyses the buying patterns of customers by drawing data from your existing accounts and enterprise software. Irregularities and other trends in customer spending will then trigger alerts that then translate into instant, actionable sales leads delivered straight to the relevant sales representatives.

The result is a more productive sales team, an increased share of customer spend, higher profitability, improved customer retention and increased marketing response.

Companies that have implemented sales intelligence solutions regularly report a return on investment of 20 to 30 percent.

Looking at what IT can do for sales is not "rocket science" and it does not involve re-engineering your business. It's simply a question of optimizing the investments you have already made to provide salespeople with the tools they need to venture beyond their normal boundaries and become high achievers and to help your business not only survive but to prosper through the tough times.

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