UK: Sales – Making the Step Change For The Smaller Company

Last Updated: 5 December 2012

The primary driving factor in high-growth companies is the acquisition of new accounts. However, there are two parts to fast growth: creating it and managing it. If you don't have the ability on the back end to scale the business, it doesn't do much good to grow it quickly.

How do you rate on the elements of sales?

Consider the following elements of your sales organisation:

  • marketing, branding and messaging
  • prospecting process
  • sales process
  • process for growing exciting accounts
  • sales management
  • sales staff
  • sales information dashboard.

Then rate yourself on each element, using the following scoring system:

  • 1 = a fatal weakness
  • 3 = same level as our competitors (me-too)
  • 5 = a unique competitive advantage.

If you want to grow quickly, and you score three or lower on any one of these elements, you have a problem. Three or lower means you are no better than the competition, and the best you can do is rise and fall at the same rate as your industry.

Focus on sales process, not sales training

To grow quickly, it's important to focus on sales process rather than sales training. Most sales training is about one-to-one communication. It emphasises ways to become more effective in the one-to-one relationship.

When you buy sales training for your company, the salesperson benefits the most. However, that asset (the salesperson) regularly leaves you and goes to the competition or out of the industry altogether. So you're investing in something that has the potential to dramatically deteriorate.

When you improve the sales process, the vast majority of the benefits stay inside the business. As you add sales staff, they have a process to follow – and you have a greater and more predictable potential for success.

It is also important to distinguish between marketing and selling. Marketing is about pushing your message out to the marketplace and seeing how many respond. It is a broadcast approach that carries one message to many. Selling is about going out and communicating a message one-to-one. Both are important, but they need to be used appropriately in order to generate fast growth.

The characteristics of smaller and larger companies

Less than 1% of all companies in the UK are bigger than £10 million. They tend to have very different characteristics from larger companies. With smaller companies (£10 million and under):

  • The market is local or regional.
  • The culture is entrepreneurial. Smaller companies will do just about anything they have the people and resources to do.
  • Management style is unilateral management, meaning that sooner or later most decisions come across the CEO's desk.
  • Most small companies practise avoidance when confronted by a big competitor, and try to stay under the radar.
  • Everything is driven by "magic, culture and relationship".

With larger companies (£50+ million):

  • The market is national or international.
  • The approach is more solutions focused. The message is: "Here's what we can do and will do, and we won't do a lot of other things unless the deal is really big."
  • Management style is professional. There are systems, processes and metrics in place throughout the company.
  • When a big competitor appears, they confront it head on.
  • Everything is process driven.

Crossing No Man's Land

The area between the £10 million company and the £50 million company is called No Man's Land. Very few companies manage to cross it. Even fewer manage to cross it in one generation. However, most entrepreneurs are very creative, motivated and driven, so they try to get across by cheating.

The cheating route

Entrepreneurs typically cheat in one of three ways:

  • Merger or acquisition. The goal with this strategy is to quickly add professional management and all the pieces that larger companies have as a natural part of their business.
  • The miracle product. If you can just get the right product or service it will take you to the moon.
  • Change the market. If you succeed in one market, other markets must be just like it.

In reality, these three approaches are not the best way to cross No Man's Land. They require large amounts of money up front and have a low probability of success. In effect, they are like gambling with the success of your business.

The incremental growth route

Another approach that doesn't work very well is incremental growth, where you bet on better management, better people and better sales technology. The problem with betting on "better" is that you can only get so much better. If the market rate of growth is 5% and you get 5% better each from your salespeople, management and sales technology, at most you will get 20% better.

If you're a £5 million company, it will take you a long time to get across No Man's Land. Eventually you get to the point where "better" no longer works and you have to change dramatically in some way.

The "whale hunting" route

The best way to cross No Man's Land is by focusing on larger deals, or "whale hunting", which involves developing a sales process that enables you to consistently and more predictably bring in more business.

The belief exists in small companies that it is very hard to get big when you have to compete against big companies. Big companies prefer to do business with other big companies for these reasons:

  • Safety.
  • Capacity.
  • Service.
  • They understand each other.
  • Pricing.

Yet big companies also work with small companies. They do so for the following reasons:

  • Innovation.
  • Control.
  • Speed.
  • Leverage.
  • Flexibility.
  • Service.
  • Better pricing due to lower overhead.

In essence, big companies buy from other big companies out of fear. Big companies buy from small companies out of advantage. If you're a small company, all you have to do is take away the fear and you can do business with more big companies. If you're a big company, you have to convince the other big companies that you are really a small company that is fast, flexible and willing to let them control you.

Fear versus advantage

The issue of fear versus advantage is very real. As a small company, you can compete against bigger companies, but not by selling your advantages first. Instead, you must address the fear issue.

Most small companies start out talking all about their flexibility and speed, and then wonder why they never win the deal. You must start with their fear issues, and you have to develop that into your sales process. For example, if the big company doesn't believe you have the financial resources to handle their business, bring your banker into the meeting.

How to succeed at whale hunting

The elements necessary to have a successful whale hunting culture are the same as those in business. It involves skill, teamwork, vision, leadership, courage and training, so that everyone knows their role on the team.

However, deciding to hunt big whales also requires real culture change, and most people don't like to consider themselves part of sales. But if you're going to get big deals, the customer doesn't want to talk to the salesperson. They want to talk to all the people who are going to make it happen after the deal has been signed.

Therefore, everyone in the company has to know their role in the overall sales process.

The key is letting your people know they won't have to "do sales". Instead, let them know they will be involved in the sales process at the point where their expertise will have the greatest amount of impact. They will use their expertise to provide credibility and "credentialisation", not to make the sale.

Choosing your whales

Whale hunting is a process of carefully defining the customers you want and going after them. If you can define the market closely enough, you can guarantee the customer that you are the best solution. This requires a one-to-few, not a one-to-many, approach. That's what whale hunting is all about: picking exactly what you want, and going directly after it using a process orientation.

When defining your market, keep in mind that there are no perfect whales. In any business there will be A, B and C whales. Go after the As, but don't necessarily reject the Bs and Cs.

Using target filters

Target filters help to define your market. Ideally, you want to operate with no fewer than 12 and no more than 20. The first five target filters are things like size of revenue, geography, industry, etc. These do not define a whale, because they don't give you a tight enough market. Plus, your competitors are using the same filters. To define a whale, look for more discrete and discerning characteristics – ones that your competition probably isn't using.

The kill ratio

Once you have identified your whales, look out into the marketplace to identify the market behaviours of those types of companies. This allows you to look for companies that meet all your requirements.

It will also focus your hunting on only 5% to 10% of all the companies that could buy what you sell.

What is the benefit of filtering out 90% of your marketplace? It's all about the kill ratio. Hunting whales is expensive. The idea is to get rid of those whales that you have a low probability of winning as early as possible, so that you can generate very high closing ratios. That's where a good target filter is invaluable.

Looking for whale signs

Once you have a very specific list of whales to hunt, start figuring out whale signs. Just as the Inuit scout looks for signs in advance of the normal whale signs, you need to do the same in your business.

Whale signs:

  • are predictive of upcoming changes that may trigger opportunity
  • are not obvious – if everyone else can see the same opportunity, it is too late
  • are simple
  • are factual, not emotional or interpretive
  • need to signify opportunity, timing, scope and location – they have to tell you it is time for a deal.

When you have a closely targeted market, scouting isn't very difficult. If you're listening to the entire marketplace, you don't know whether the guy in charge of procurement lost his job or not. If you're listening to only 200 whales, it's easy to get that kind of information.

By figuring out the indicators that your competitors can't see, you know when it is time to launch a boat, get out there and sell.

Building a whale hunting sales process

Building a whale hunting sales process starts with five basic steps:

  • qualification
  • first meeting
  • needs analysis
  • prototype
  • close.

Obviously there are more steps in the sales process, but these are the most basic. Each step in the process must have a unique and distinct owner, and each step must have clearly defined roles and responsibilities.

In addition, you must clearly define the resources needed for each step, especially if you use outside resources. Figure out when to use them, how to use them and why you use them, and measure their performance.

Each step has sub-processes. For example, the "close" step has sub-processes such as legal review and signing the contract. Be sure to include these in your process.

Make sure your process measures cycle time, as it is one of the most critical factors. As a small company working against big companies, time never works in your favour. You have to know how long each step in your whale hunting process takes. That way you can tell when the process is getting off track and/or people aren't performing within the process.

Tracking your whales

Use spreadsheet or contact management software to build in a whale tracking system that looks at each step in your process. Developing the rigour and discipline to do this is very challenging because it requires a very different approach from sales management.

It is much less emotional, and more oriented towards movement and less towards motion. It is less oriented to the conversation and more to empirical evidence around how many deals you are moving along and whether you are doing it within the appropriate cycle time.

To get started:

  • Think of sales in a different way. Think of sales as a process, not an event, department or person. Otherwise, all you do is chop heads and swap bodies. What are the steps in your process?
  • Solve the power problem. When whale hunting, many companies make the mistake of focusing solely on the economic buyer. However, in a large, complex sale, the person who can say Yes is not the person who has the most power. The people in IT, safety and supply chain management are the ones who have the power, because they can say No.
    In smaller deals, the person who can say Yes or No has the power. In larger deals, it is the person who can say No. Get your salespeople to identify all the people who can say No and figure out how to take away their Noes before investing too much time working with the person who can say Yes.
  • Define a target list that meets your criteria. This takes a lot of time and effort. However, it is the discrete pieces after the first four to eight that end up being really important. That is the part that takes you from knocking out 60% of the marketplace to getting down to the ideal 5% or 10%, where you can really hit some home runs.
  • Identify the steps of your sales process. There is no magic number to the number of steps in your sales process. Have as few as possible but as many as necessary. In long buying cycles, it is especially important to have discrete steps because it gives your salespeople things to focus on and celebrate when they accomplish them.
  • Keep score. Decide how to keep score at each step in your sales process. Then keep score at every step, all the time.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.