The Executive Brief

Sales Problem? Or Strategic Problem?

Mike Frommelt Evaluation, Executive Leadership, Hiring, Private Companies, Strategy

At KeyStone Search, we have the privilege to partner with great mid-sized companies with long histories of growth and success. Frequently we are introduced to these companies when they have gotten stuck - the company's growth has stalled, and they consult us to find a new Vice President of Sales to build the top line.

The Scenario

Our initial conversations with the CEO often go 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 is the best in the world? With our amazing product, we have grown our company to $40M, primarily by selling a whole bunch of buckpresses to the construction industry. Aside from construction, we sell a few buckpresses to the medical device industry, the packaging industry and the energy industry. The fact that we have sold buckpresses to these other customers tells me there is a broad appeal for our buckpresses. After all, it is the best buckpress on the planet. It only makes sense that if we had a decent sales team and a highly accomplished Vice President of Sales, we should be able to double or even triple the size of the company.

I hired a high-priced Vice President of Sales almost three years ago, as well as a handful of new salespeople and we have implemented a very expensive CRM system, but we're not seeing any growth. I'm questioning whether or not I hired the right Vice President of Sales. In fact, I think I have to replace her. 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.

Sales Problem - or Strategic Problem?

Maybe this sounds familiar? After digging into this problem with multiple clients, I've come to learn that sales problems are often not as much about sales as they are about strategy and strategic marketing. I may have offended some of you with that nasty word, marketing, but sometimes it takes shock and awe to get people's attention! 

Before you quit reading, look at the clarifier in front of the word - strategic marketing. It's not about website building, sell sheets, trade show materials, etc. Strategic marketing relates to how and where you go to market. 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?

Understand the Market

To illustrate, let's dive back into our BP Products scenario.

You know the construction industry incredibly well. But how well do you know the medical device, packaging or energy industries? Are they buying buckpresses for the same purpose as the construction industry? Are the buckpresses being used in the same manner at an energy or packaging company as they are in a construction company? Or would a few tweaks to your traditional buckpress make it much more attractive in those industries? If so, how much would those product changes cost?

Not to mention, how large are those sectors - how many buckpresses are bought in the energy, packaging and medical 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 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 idea. Many times when we conduct our initial Discovery meetings with a new client, 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.

Why Strategy Matters

You may be thinking: wait a minute, isn't this the role of my Vice President of Sales and Marketing? Shouldn't s/he be able to create priorities for salespeople, making sure they are being their most productive?

Yes, it should be, but unfortunately, many Directors and Vice Presidents of Sales have not been trained in strategic marketing. In larger companies, sales is primarily an execution role, not a planning role. Sales leadership is typically directed where to sell by the marketing/strategy leaders.

Don't misunderstand - it's not that sales leaders are less important or intelligent than marketers. Effective selling is one of the most difficult skills to master. Effective salespeople are worth their weight in gold. But traditional sales is focused on knocking down doors and creating relationships. No matter how good a salesperson is, they can't help you grow if they're knocking down the wrong doors. 

Finding a Strategic Leader

If you find yourself stuck and are evaluating the sales function, make sure to look closely at the strategic marketing side of the equation. When adding new leadership, make sure to ask questions about:

  • how they've developed new markets
  • strategic plans they have created (and the results of those plans)
  • how they gather and interpret both customer and industry data for better decision making

True strategic marketing is not guesswork - it's a discipline that must be trained and honed. I've found that despite lofty titles like EVP of Sales, VP of Sales and Marketing, etc., some people just get strategic marketing and others don't.

Finding new leaders is challenging! You might try on your own, or seek assistance from a search firm. However, when you find, identify and hire the perfect leader with the right mix of sales and strategic marketing leadership, things will start to change. However, be patient. Better planning will lead to better execution and the roadblocks to top line growth will disappear.

And finally, when the company is outselling your capacity to produce, you can stop worrying about sales and start bugging your operations and finance leaders! 

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