Introduction
If you are a business owner who has already reached a certain level of success in your business, you have probably asked yourself: why can’t my sales team grow more and faster? Why is the sales process so inadequate and slow? Why does markup pricing no longer work? Why is it so difficult to have a clear and effective commercial policy? Why does the sales team not know the market price, but only the best sales margin? Why do you feel like a hostage to your clients? Why does the sales team do everything, from sales, after-sales, technical support, returns, error correction, marketing, etc.?
These are some of the growing pains in sales teams that many companies face when they want to scale their results. In this article, we will explain the causes of these pains and how you can overcome them with some practical and efficient tips. The article takes into consideration medium to large companies.
Causes of growing pains in sales teams
The growing pains in sales teams are the result of a series of factors that affect the performance and productivity of the sales team. Some of these causes are:
· Concentration of information: when the company grows, the amount of data and information about customers, products, services, competitors, the market, etc., also increases. If this information is not organized, shared, and accessible to the entire sales team, it can create confusion, rework, wasted time, and lost opportunities.
· Inadequate and slow sales process: when the company grows, the sales process also needs to adapt to the new demands and expectations of customers. If the sales process is too bureaucratic, complex, slow, or inconsistent, it can drive customers away, reduce conversion, increase the sales cycle, and decrease satisfaction.
· Markup pricing: when the company grows, markup pricing, which is based on the cost of the product or service plus a fixed profit margin, may no longer be suitable for the market. Markup pricing can lead to prices that are too high or too low, which do not reflect the value perceived by customers, competition, demand, seasonality, etc.
· Difficulty in having a commercial policy: when the company grows, the commercial policy, which is the set of rules and guidelines that guide sales decisions, also needs to be reviewed and updated. If the commercial policy is too rigid, inflexible, or outdated, it can limit negotiations, concessions, discounts, payment terms, etc., that are necessary to close more sales and retain customers.
· Sales teams do not know the market price: but the best sales margin: when the company grows, the sales team needs to know not only the margin of the products or services but also the market price, which is the price customers are willing to pay and that competitors are practicing. If the sales team does not know the market price, it can lose sales by charging too much or fail to earn more by charging too little.
· You feel like a hostage to customers: when the company grows, you may feel hostage to customers, who are those with very high bargaining power, who demand a lot from your company, who complain a lot, who delay payments, who threaten to switch suppliers, etc. If you feel hostage to customers, you can lose autonomy, confidence, profitability, and sustainability in your business.
· Sales team without distinction of function and purpose, doing everything, sales, after-sales, technical support, returns, error correction, marketing, etc.: when the company grows, the sales team needs to specialize and divide into specific functions and purposes, such as sales, technical support, after-sales, etc. If the sales team does everything, it can lose focus, efficiency, quality, and customer satisfaction.
Here are some tips that can help your business.
Tip 1: Decentralize information
One of the main growing pains in sales teams is the concentration of information with the salespeople. This means that when a salesperson leaves the company or is absent for some reason, the client is left without service and the company loses the business opportunity. To avoid this problem, it is necessary to decentralize information and create a customer registration and tracking system (CRM), which can be accessed by the entire team. Thus, the client is not linked to a single salesperson, but to a company that offers a quality and trustworthy service.
Tip 2: Optimize the sales process
Another growing pain in sales teams is the inadequate and slow sales process, which can cause loss of time, resources, and customers. To optimize the sales process, it is necessary to define the stages, criteria, and responsibilities of each one, from prospecting to closing. In addition, it is necessary to use tools and indicators that can measure and improve sales performance, such as the sales funnel, the sales cycle, the conversion rate, the average ticket, the customer acquisition cost, among others.
Tip 3: Adopt strategic pricing
Many companies still use the markup pricing method, which consists of applying a fixed margin on the cost of the product or service. However, this method can lead to inadequate pricing, which does not take into account the value perceived by the customer in their segment, demand, competition, and the company’s market positioning. To adopt strategic pricing, it is necessary to analyze these factors and define a price that is fair, competitive, and profitable for each segment, that can attract and retain customers and that can cover costs and generate profit.
Tip 4: Establish a commercial policy
One of the difficulties of many companies is having a clear and consistent commercial policy that defines the rules, limits, and conditions for sales by market segment. A well-defined commercial policy can avoid conflicts, excessive discounts, defaults, cancellations, returns, among other problems that can harm the profitability and reputation of the company. A commercial policy should include, for example, discount conditions, criteria for granting credit, logistics deadlines, payment methods and deadlines, penalties for delay or default, conditions for exchange or return, service channels, among other relevant aspects for sales.
Tip 5: Know the market price
Many times, sales teams do not know the market price, but only the best sales margin, which can lead to loss of competitiveness and customers. To avoid this, it is necessary that salespeople have access to information about the market, such as the prices practiced by competitors, trends, opportunities, threats, needs, and customer preferences in their segments. In addition, it is necessary that salespeople in no way have access to the margins of the products sold, otherwise it will be difficult for them to know the prices of competitors and the market.
Tip 6: Reduce customer dependency
One of the growing pains in sales teams is the excessive dependency on customers, which can create a situation of vulnerability and risk for the company. This happens when the company depends on a few clients to generate most of its revenue, or when clients have very high bargaining power, being able to demand unfavorable conditions or threaten to switch suppliers. To reduce customer dependency, it is necessary to diversify the customer portfolio, seeking new segments, markets, and niches, and to increase the added value of products or services, offering differentials, benefits, and solutions that can retain customers and make them less price-sensitive.
Tip 7: Differentiate the functions and purposes of the sales team
Finally, one of the growing pains in sales teams is the confusion of functions and purposes of the sales team, which can generate disorganization, demotivation, and low productivity. To avoid this, it is necessary to differentiate the functions and purposes of the sales team, defining the responsibilities, goals, incentives, and feedback of each one. In addition, it is necessary to separate sales, after-sales, technical support activities, among others, and delegate these activities to specialized professionals who can serve customers with more quality and efficiency.
Conclusion
We thank you all for reading this article. We hope that the information and tips provided here can help you overcome the growing pains in sales teams. For more information on how our OPEX consulting can help you achieve your goals, please contact us.
