Last week I spoke of five dimensions of a sales organisation: company results, customer results, activities, sales people, and sales effectiveness drivers. Today we will look at the first, and probably most important of them-company results.
Company results are about our sales, market share, and profitability targets. Are we growing faster than the competition? Our sales are growing, but are our costs in line with industry average? These are typical questions.
As a point of reference I looked at the 2014 annual report for one of my favourite Jamaican public companies, GraceKennedy. Their Consolidated Income Statement showed an increase in revenues of 15.9%. But a closer look (Note 23) showed that the sale of products (not including financial and other services) was up by 20.2%. Some sales managers within the Group may have good reason to smile: for how many can boast that level of growth in our tight economic space?
As Zoltners et al (2012) remind, “Sales leaders are interested in results. After all, they are evaluated on, and rewarded for goal achievement, and results are the most visible and objective indicator of achievement.” They continue, “Company results are the organisation’s financial outcomes, in which the efforts of the sales force play a major role. Such results can be measured using sales, profits, market share, return on investment, or some other metric, and they can be expressed as absolute levels, percentage of goal achievement, or growth over last year. It is useful to evaluate results from both the short term and long term perspectives for the performance of the sales force affect both.”
Questioning Sales Success
So we know that the efforts of the sales force play a major role in company results in this era of product parity and oversupply in almost every category of product or service offering. Well, you may ask, “My company experienced triple digit growth over the past month. Shouldn’t we rejoice?” Not so fast. For looking at short-term sales growth alone can be fatal. Indeed, shrewd sales managers have long known that in the face of apparent sales success they must always ask:
“Where did this recent growth come from?”
“Did we merely borrow some customers through a short-term sales promotion, or a difficulty being experienced by a competitor? Or is our target market responding to a better value proposition communicated by our marketing and sales people?”
“Is this growth sustainable? Does my organisation have a powerful sales force that will consistently deliver above average profitable growth for the long term?”
Indeed, shrewd managers take it one step further, for recognising the value of their key accounts and the need for interdependency, they ask another critical question, “I’m achieving my desired company results: but what about my customers? Are they better off from doing business with me: and will they still love me tomorrow?”
Can we discuss how our sales organisation might affect our customers’ results next week?
Herman D. Alvaranga is president of the Caribbean School of Sales Management. Shrewd managers call us instead of looking outside the region for world-class sales and marketing education, consulting and training.