How to double revenues with half the effort

Let’s revisit the fact pattern found at public companies with a market cap >$75M:

• Top down, risk based approaches to SOX compliance free time to monitor the effective operation of those controls that prevent/detect material weaknesses over financial reporting.

• SOX control activity counts are declining.

• SOX requires the adoption of a framework (e.g. COSO).

• COSO requires the monitoring of control activities impacting financial reporting.



Sadly, monitoring sales activities isn’t required by SOX.



The benefits of monitoring sales activities include:

• Early identification of sales best practices worthy of replication

• Ability to identify/reward the 20% of the sales force producing 80% of the results

• Ability to identify the bottom 20% of the sales force in need of training

• Alerting management to training needed by the sales force



How closely should sales activities be monitored? In SOX, control deviations should occur less than 5% of the time. Contrast this with most sales monitoring mechanisms and you find inconsistent (ineffective) operation of the behaviors that lead to sales (antecedents). The best sales monitoring I’ve seen includes daily/weekly monitoring of the antecedents to revenue growth.



Antecedents defined: those activities (meetings held, calls made, accounts opened) that result in increased revenue. Antecedents for products/services with longer sales cycles generally include counting the number of interactions held with the prospect and posting it for all to see (7 meetings are needed to make pursue/don’t pursue decisions).



Like COSO, effective operation of any activity is enhanced by training and monitoring. In sales vernacular, this means coaching and reporting. Let’s revisit these concepts.



COACHING:

• Coaches push the sales force to sell.

• Coaches solicit common objections originating from accounts and prospects around why they don’t need or want a given service.

• Coaches are aware of service offerings, what is selling and how these are sold in the marketplace.

• A coach’s role includes:

o Understanding how the sales force approaches the marketplace

o Collecting objections provided by prospects and current customers

o Showing how to overcome objections

o Holding a series of focused, targeted calls with the sales force assigned to all program accounts and pre-identified prospects on a weekly/bi-weekly basis.

• The coaches drive monthly or bi-monthly sales campaigns to gauge how program accounts and prospects respond to a new service offering by region. Coaches identify program accounts and prospects that match defined success criteria and discuss how to introduce new services.

• Coaches hold the sales force accountable for bringing ideas to program accounts and prospects by following up with individual sales people. They ask questions around 1) why a given offering is not relevant at the program account or prospect and 2) why the offering is not getting sold?



REPORTING:

• Daily or weekly reports are sent comparing the aforementioned antecedents. Voicemails to the salesforce recognize and name successful sellers. The individual/regional reports include:

o # of meetings held with individuals at program accounts and prospects for a given product/service

o $ revenue generated

• Results are published regionally / nationally on a weekly basis via voicemails by Leadership to link sales metrics to an individual

• Winning individuals or geographies receive special recognition on a quarterly/annual basis (e.g., dinner with President in NY)



Questions & Actions

1. Has your company redirected the effort spent monitoring control activities over financial reporting to monitoring the behaviors of your sales force?

2. Do you have a tactical plan to actively monitor the identification, pursuit and closure of sales opportunities?

3. How frequently does Leadership assess the success of its sales force? Specifically, the success of expanding services to those accounts that produce more than 80% of the company’s revenue?

4. What mechanism exists to identify and replicate the behaviors of successful sellers?

5. Do you know which techniques are most successful in closing deals?

6. Do you know the common objections to selling your product/service?

7. Do you brainstorm ways to overcome objections?

8. Do you rehearse these?