Sales Performance Associates LLC

Like every business, media technology companies balancing stakeholder value against the challenges of an economic constriction have two choices. You can cut expenses or increase revenue and profit. It’s easy to say “let’s cut where we can and find ways to sell more.” But in the end, many end up making across-the-board cuts that actually have a negative impact on the bottom line.

During the 1982 economic downturn Management Guru Tom Peters said “mindless cutting in the face of a downturn is often counterproductive. Tough times are in fact golden opportunities to get the drop – and the long term drop at that – on those who respond to bad news by panicky across-the-board slash and burn tactics and moves that de-motivate and alienate the workforce at exactly the wrong moment.”

The same warning holds true today.

Cut Expenses or Improve Sales Execution

As example, let’s look at a company with annual sales of $25 million and a 60 percent cost of goods. The company generates a $10 million gross profit. The company delivers a respectable 10 percent net profit margin ($2.5 million) after fixed facility, general and administrative and sales and marketing expenses are subtracted.

Now, let’s look at some options.

One option is to reduce sales and marketing expenses by an across-the-board 10 percent (Scenario A). While easy to implement, the impact on pre-tax profits is minimal – only six percent - and assumes the reduction has no negative impact on sales.

In Scenario B, the company invests in a sales conditioning program that enables the sales team to shorten sales cycles, increase competitive wins and boosts sales close ratios through improved deal qualification and coaching. The result is a 10 percent increase in gross sales generating an increase in pre-tax profits of 27 percent.

In Scenario C, the sales conditioning program allows the sales team to reduce discounting by selling strategic value to higher level executives. Although they close the same number of deals, sales margins (reflected as a higher average selling price) are 10 percent higher. The change delivers a 100 percent increase in pre-tax profit.

The more typical result of a sales conditioning program is a combination of Scenarios B and C. The number of deals won and sales margin increase. The combined 10 percent increases in sales volume and average selling price deliver a boost to pre-tax profits of more than 150 percent – as shown in scenarios B and C.

The Key Take-Away

Media technology companies that implement a sustainable sales conditioning program experience a force multiplier effect that flows straight to the bottom line.

Sales and Marketing Conditioning

Sales Performance Associates helps growing media technology companies achieve sustainable, repeatable and predictable revenue growth by improving sales and marketing processes, methods and execution. Our unique sales conditioning approach helps clients identify more and better sales opportunities; improve the size, qualification and velocity of their pipeline; enhance sales forecast accuracy; win more competitive opportunities; grow business within existing accounts and upgrade overall sales and marketing execution and efficiency.

We address the full range of tactical marketing and sales operations - from demand creation through to close. Sales conditioning starts with a Strategic Assessment workshop with your senior management team to define the who, what, where, why and how of your sales challenges. Then we deliver a comprehensive report of indicated improvements, a best practices sales process map and a customized plan to deliver the highest return in the shortest time. We work with your "live" deals in coaching and training workshops to make new methods and tactics immediately relevant. And to assure adoption, our program includes on-demand opportunity coaching and recurring training to reinforce the new methods.

Action Item: Schedule a Sales Conditioning Check-up

Your sales and marketing team doesn't need sales training...they need sales conditioning. Click here to schedule a no-obligation 20 to 30 minute telephone conversation to discuss your situation.

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