Getting to the Root Cause of Sales Stagnation

Introduction

I often get called in by businesses when sales are not moving in the right direction, and people want to understand why. This issue can be especially confusing when working in a culture different from your headquarters. Sales stagnation is a common problem that many businesses face, and solving this problem requires a thorough examination of various business aspects to pinpoint the root causes and apply effective solutions.

Recently, I hosted a live stream where I shared my insights on how to tackle sales stagnation. The session highlighted five key areas businesses need to investigate to understand and overcome stagnation.?

My advice is based on extensive and varied experiences working for the US affiliate of technical companies based outside the US. ? First, as an application engineer, then a salesperson, and a US based commercial leader.? I’ve sold direct, as a distributor, and through distribution.? Then I moved to Europe, to the great global systems that would support the local affiliates. This gave me a variety of perspectives to understand the issues that both the affiliates and HQs face.??

So I try to bring these experiences to our approach at G.E.T. Global as we help clients identify what could be blocking success and then implementing new strategies to reach their objectives.?I believe there are 5 key areas to investigate when identifying and addressing the root causes of sales stagnation. By focusing on five critical areas—market data, sales performance, team skill set, leadership perceptions, and customer feedback—I provide a comprehensive framework for businesses to diagnose and solve their stagnation problems.? In this article we’ll discuss the importance of each key area, some common pitfalls, and some solutions.??

It doesn’t cover everything, but will give you some insights into where you need to look to really identify the problems in your business.?

The power comes when you’re able to take insights from each of these 5 areas to integrate and apply to your making the few targeted changes that will allow you to get back on track.

1. Market Data

Importance: Understanding market trends and consumer behavior is crucial for identifying potential issues that might be causing sales stagnation.

Market data provides directional knowledge, helping businesses understand where to go or where to look for many problems you can face. It's essential to grasp market trends and general consumer behavior to gain a clear direction.?

However, the answer to your problem is rarely, if ever, found solely in market data. It's essential because it points you in the right direction, but these tend to be obvious data points.? Instead of following market trends, businesses need to seek deeper insights beyond general consumer information.

Here are some common pitfalls businesses encounter:

• Relying too heavily on general market trends: These trends are typically skewed by large players, which can mislead smaller or mid-sized companies that do not necessarily follow the same patterns. Instead of merely following market trends, these companies should aim to exceed them, so you have to think “how do we exceed the trend?”.
• Using generic consumer information: Many businesses rely on broad, generic consumer data rather than obtaining specific feedback from their clients. This approach fails to capture the nuances and specific needs of their customer base.

Solutions:

• Utilize existing market data effectively: Leverage the market data you already have, making sure to draw meaningful connections and understand the broader market context.
• Conduct interviews with clients and analyze lost opportunities: Direct conversations with clients and examining missed opportunities can provide valuable insights into your performance and areas needing improvement.
• Test and pilot adjustments to your value proposition: Regularly test and adjust your value propositions to ensure they align not just with market demands, but also with specific client needs.

2. Sales Performance

Importance: Sales performance data provides hard evidence and indicators of how well your sales team, products, and services are performing.

Sales performance is critical because it offers clear, hard evidence and indicators of performance. This data is crucial for evaluating your sales team, products, services, and regional performance. It is not just about the numbers; the real value lies in the insights you can derive from them. Sales performance data helps in understanding the fundamental issues rather than just assuming that good results indicate the right actions. It emphasizes the need to delve deeper into each sales stage and not just focus on the final outcome.

Common Pitfalls:

• Assuming good results indicate correct fundamentals: Sometimes, a good sales year might be more of an anomaly rather than a sign that the underlying sales strategies are sound. Businesses often mistakenly assume that good results mean everything is being done correctly, without investigating the real reasons behind these results.
• Not assessing conversions by sales stage: Many companies look only at the final sales numbers without analyzing the conversion rates at each stage of the sales process. The real story often lies in these conversion rates, which can reveal significant issues or opportunities for improvement.
• Expecting salespeople to excel in all areas: Sales teams are often expected to be proficient in all aspects of the sales process, which is unrealistic. Each salesperson may have particular strengths that should be leveraged, rather than expecting uniform performance across all areas.

Solutions:

• Focus on the basics and continuous improvement: Return to foundational principles regularly. Simplify business processes and emphasize continuous improvement to enhance performance at each sales stage.
• Provide targeted training by sales stage: Offer training that is specific to each stage of the sales process, rather than general training, to address the unique challenges and skills required at different points.
• Consider restructuring the team based on market and client needs: Align your team structure with the specific demands of the market and the needs of your clients, which may involve reassigning roles based on individual strengths and client requirements.

3. Team Skill Set

Importance: Understanding the skill set of your team in relation to customer needs can help optimize performance and create value.

Understanding the skill set of your team is essential because it directly impacts how effectively your team can meet customer needs and drive results. It is not just about having a team in place but having a team whose skills align with the specific needs of your clients. Building a team based on customer needs rather than personal preferences ensures that you are better positioned to serve your clients effectively. Additionally, recognizing and adapting to regional dynamics and the team's adaptability is crucial when implementing new processes.

Common Pitfalls:

• Hiring based on personal preference: Instead of focusing on the skills needed for the job, companies sometimes hire individuals they personally like, which can lead to mismatches in skills and job requirements.
• Neglecting regional dynamics: There's often a disconnect between regions, especially for companies operating internationally. This can lead to inefficiencies and a lack of understanding about local market conditions.
• Changing processes without considering team adaptability: Implementing new processes without assessing whether the team can adapt to these changes can lead to resistance and failure. It's essential to understand the team's current skill set and adaptability before making significant changes.

Solutions:

• Structure the team based on client needs: Design your team structure around the specific needs and preferences of your clients rather than adhering to traditional or historical structures.
• Hire based on core skills and objectives: Focus on recruiting individuals with the core skills and objectives that align with your client needs, ensuring a better match between job requirements and employee capabilities.
• Foster open communication across all levels of the organization: Encourage regular and open communication between all team members, from corporate headquarters to regional managers and front-line staff, to ensure everyone is aligned and informed.
• Pilot process changes before full implementation: Test new processes on a small scale before rolling them out organization-wide to ensure they are effective and that the team can adapt smoothly.

4. Leadership Perceptions

Importance: Internal confusion and misunderstandings among leadership can lead to broader team confusion and hinder performance.

Leadership perceptions are vital because any internal confusion or misunderstandings among leadership will trickle down and cause broader team confusion. Clear, aligned leadership is essential for setting the direction and ensuring everyone is on the same page. Misunderstandings or inconsistent messaging from leadership can lead to confusion and a lack of cohesive strategy. Aligning leadership perceptions and maintaining clear communication is critical for a motivated and focused team.

Common Pitfalls:

• Delaying focus on sales objectives for new leaders: When a new sales leader or commercial leader comes on board, there's often a grace period before they are held accountable for sales objectives. However, focusing on sales objectives from the beginning can help build the right habits early on.
• Inconsistent messaging within the organization: Different messages from headquarters and affiliates can lead to confusion and a lack of cohesive strategy. Consistency in messaging is crucial for maintaining alignment and clarity within the team.
• Lack of understanding of key blockers to success: Without an open dialogue, leadership may not fully understand the obstacles their team faces. This lack of understanding can prevent effective problem-solving and support.

Solutions:

• Ensure consistent messaging throughout the organization: Develop and maintain a unified message across all levels of the organization to ensure that everyone is working towards the same goals and understands the priorities.
• Conduct regular strategy and listening sessions: Hold frequent strategy sessions and listening meetings to understand the concerns and insights of various team members, ensuring that leadership is aligned with the needs and challenges of the team.
• Consider external support such as coaching or consulting: Engage with external coaches or consultants to provide an objective perspective and support leadership development and alignment.

5. Customer Feedback

Importance: Customer feedback is invaluable as it provides direct, free insights that can improve loyalty, marketing messages, and competitive research.

Customer feedback is invaluable because it provides direct, free insights from the people who matter most—your clients. Engaging with customers and understanding their feedback is a powerful tool for improving client loyalty, refining marketing messages, and conducting competitive research. Feedback from customers, especially from lost opportunities, offers an opportunity to make real corrections and drive improvements based on their needs and experiences.

Common Pitfalls:

• Not engaging with customers enough: Companies might not seek feedback as frequently as they should, missing out on valuable insights directly from their clients.
• Misinterpreting feedback to fit preconceived notions: There's a tendency to hear what they want to hear rather than what the customer is actually saying, which can lead to misguided strategies.
• Ignoring feedback from lost opportunities: Feedback from lost opportunities is crucial, yet many businesses neglect this. Understanding why a prospect chose a competitor can provide critical insights for improvement.

Solutions:

• Conduct regular surveys and interviews: Implement a system of regular surveys and interviews to continuously gather feedback from clients, ensuring that you stay informed about their needs and perceptions.
• Gather honest feedback from lost opportunities: Provide free services to prospects who did not choose your product or service, encouraging them to share honest feedback about their decision-making process.
• Engage all parts of the organization in the feedback process: Involve various departments in collecting and analyzing customer feedback. Sometimes clients may be more comfortable sharing their thoughts with service personnel or administrative staff rather than salespeople.

Conclusion

Addressing sales stagnation requires a comprehensive analysis of five critical areas: market data, sales performance, team skill set, leadership perceptions, and customer feedback. The true transformation occurs when you can identify and integrate insights from these areas to uncover root causes. Prioritizing and piloting changes based on these insights can create maximum impact.

We utilize a proprietary system we call DEEPs to guide clients through this process, offering a structured approach to derive actionable insights and growth strategies from comprehensive data. With these insights and a strategic plan for growth, businesses can make informed decisions to overcome stagnation and drive sustainable growth.

I hope this article provides valuable knowledge and practical advice to enhance your sales strategies. For more detailed guidance, feel free to contact me directly via email at [email protected] or connect with me on LinkedIn.