How-To Guide Part 1 – Setting up the Sales Shop
Welcome to our MWBE How To Guide, in which we give you simple and practical steps for reaching your sales targets. This five-part series covers the fundamentals of sales, and in this first part, we will discuss setting up your sales function.
Not everyone who starts a business understands that sales must be an intentional and well planned function. “If you build it, they will come” is a misquoted line from an old Kevin Costner movie – not a business strategy.
Here are the basic steps to creating a sales department that will do the job of finding customers for your products and services.
Step 1 – Build a Sales Growth Team
As your budget will allow, build a small, cross-functional team. A good rule of thumb for compensating salespeople is that their work should generate three times their entire compensation package (salary, benefits and commission). For example, a salesperson who gets paid a $100,000 package should generate at least $300,000 in company revenue. Work with your sales team to develop a Sales Growth Team Mission. Hold a kick-off meeting to set sales planning goals, schedule meeting times, and get organized for the strategy planning process.
Step 2 – Plan Your Sales Strategy: Customer Acquisition, Retention, and Expansion
Most organizations can benefit from a simple three-pronged approach to sales strategy that everyone can understand:
- Acquire – Recruit as many new customers as possible.
- Retain – Develop a strategy to reduce churn, or loss of customers after an initial sale. Things you can do:
1. Offer incentives that encourage repeat business
2. Continuously survey current clients to gauge areas of improvement
3. Quarterly or bi-annual check-ins with current clients, by personal email, phone, or drop-in meeting (where appropriate)
4. Conduct exit interviews, via free online templates such as Google Docs or Survey Monkey, to understand when and why clients stop buying from you and determine where you can improv - Expand – Sell additional products to existing accounts. Your best new customer is your current customer. There is a good chance that you provide more than one product or service. Once you have established trust and rapport with a client, it’s time to establish an additional revenue stream with them. Always be intentional about diversifying your revenue, and start with current clients.
Step 3 – Introduce SPIN Selling Framework to Your Team
Neil Rackham’s SPIN (Situation, Problem, Implication, Need-payoff) Selling is one of the most validated consultative sales methodologies. If you have another proven method that you prefer, by all means use it, but if you are looking for a simple and easy-to-understand method, I have used this one with success and highly recommend it. Whatever you choose, do give the gift of a method to your team, so that they have a consistent framework.
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