The Executive Brief

Sales Problem or Something Else?

Mike Frommelt Strategic Marketing, Strategy, Private Companies

Here at KeyStone we’ve been privileged to work with a number of great mid-sized companies with long histories of growth and success. Often, we get introduced to these companies when they have somehow gotten stuck. The company’s growth has stalled and they consult us about finding a new Vice President of Sales to build the top line.

In our initial conversations with the CEO/Owner we often hear something like this:

“Our company [BP Products] makes the highest quality buckpress in the world. Our primary customers for the buckpress are in the construction industry.  They love us, by the way, did I mention our buckpress was the best in the world?  We’ve grown the company to $40M, primarily by selling a whole lot of buckpresses to the construction industry. However, aside from construction we sell a few buckpresses to the medical device industry, the packaging industry and the energy industry respectively.  The fact we have sold buckpresses to these other customers tells me there is a broad appeal for our buckpress.  After all it is the best buckpress on the planet!  It only makes sense to me that if we had a decent sales team and a solid VP of Sales creating plans and driving the right sales behaviors, we should be able to double, or even triple the size of the company.”

“So, I hired a high priced VP of Sales almost 3 years ago, a handful of new salespeople and implemented a very expensive CRM system, but I’m not seeing any growth. I’m really questioning whether or not I hired the right VP of Sales, in fact, I think I have to replace him.  But I also hate the idea of conducting a search for a new one.  Last time it took me six months and I’m not confident a new one would be any better than the current one.”

Maybe this sounds somewhat familiar? After digging into this problem with multiple clients, we’ve come to learn that these “sales” problems are not as much about sales as they are about strategy or strategic marketing. Of course, I realize I have just offended many of you with the use of a nasty word (marketing), but sometimes it takes a swear word to get people’s attention. Sales Problem or Something Esle?

However, before you quit reading, please look at the clarifier in front of the word marketing. Strategic Marketing is not about website builds, sell sheets, trade show materials or anything else you may view as the giant fireplace which burns company funds. Strategic Marketing relates to how and where you go to market.  Said another way, it’s the discipline of making solid/educated bets in the market. Where do you spend your time and money to get the greatest return?

To illustrate, let’s dive back into our story from above (BP Products):  You know the construction industry incredibly well. But how well do you know the medical device industry, the packaging industry and the energy industry? Do they buy buckpresses for the same purpose as the construction industry? Are buckpresses being used in the same manner at an energy company, or a packaging company as they are in construction? Or, would a couple tweaks to your traditional buckpress make it much more attractive/sellable in those industries? If so, how much would those product changes cost?

Oh, and how large are those sectors/markets i.e. how many buckpresses are bought in the energy, packaging and/or med device industry each year? If you made and sold every single buckpress bought by energy clients next year, how much would it improve your top line, your bottom line? Based on this is it a worthwhile investment to go after that market, or is there something else altogether that would be a better fit?

Of course, answering these questions is just scratching the surface when it comes to creating an overall strategy, but you get the gist. Many times when we do our initial discovery with new clients we see sales teams trying to develop new markets without a basic understanding of the overall market. As a result, they are spending time in the wrong places, selling the wrong products to the wrong people.

You may be thinking, “wait a minute, isn’t this the role of my VP of Sales/Marketing? Shouldn’t he/she should be able to create priorities for salespeople, making sure they are being their most productive?

The short answer is “yes, it should be,” but unfortunately many Directors/VPs of Sales have not been trained in strategic marketing. In larger companies, sales is primarily an execution role, not a planning role. In essence the salespeople (and sales leadership) is directed where to sell by the marketing/strategy leaders.

Don’t misunderstand; it’s not that sales types are somehow less important or less intelligent than marketers. Effective selling is one of the most difficult skills in the business world to master. Effective salespeople are worth their weight in gold.  But real sales is focused on knocking down doors, creating relationships, “shaking hands and kissing babies.” And, no matter how good a salesperson is, they can’t help you grow if they are knocking down the wrong doors or kissing the wrong babies.

So, if you find yourself stuck and are evaluating the sales function, make sure to look closely at the Strategic Marketing side of the equation. In regards to leadership candidates, make sure to ask questions regarding how they’ve developed new markets, strategic plans they have created (and the results of those plans), and how they’ve gone about gathering/interpreting both customer and industry data for better decision making. Real, Strategic Marketing is not guesswork, it’s a discipline that must be trained and honed, just like any other. I’ve found that despite lofty titles (EVP of Sales, VP of Sales/Marketing etc…) some people just get strategic marketing and others simply don’t.

When you identify/hire that leader with the right mix of Sales/Strategic Marketing Leadership, things will start to change, but it does take patience. Better planning will lead to better execution and the roadblocks to top line growth will begin to disappear.

And then, when you’re outselling your capacity to produce you can stop thinking about Sales and start bugging your Operations and Finance leaders.  :)