About two years ago, Jim McCarthy noticed that a lot of his customers began independently asking him for something entirely new.
That little nudge sometimes turns into a sale.
The problem? It wasn't a product his company offered. As the co-founder and CEO at Goldstar of Pasadena, California, McCarthy works with 4,000 venues to sell discounted tickets for the theatre, sporting events, and concerts. And a few of his clients wanted a way to lure back customers who had almost, but not quite, made a purchase.
So Goldstar needed to tweak its strategy. It created a system to follow up with a customer who had put a ticket in their virtual shopping basket, without purchasing. Those customers would get an email reminding them the tickets were still available. That little nudge sometimes turns into a sale.
“This is something that wasn’t part of our original concept of what we did,” McCarthy said. “In business, people have this idea that strategy is as pure as the driven snow and can’t be changed. But you have to react to what’s in the marketplace.”
You have to react to what’s in the marketplace.
McCarthy knew he had to respond quickly to what his customers wanted. But that’s not always what happens in companies where sales and strategy don't align.
The reason many companies fail at matching their vision or strategy with sales can be as simple as poor communication. But sometimes the problem is far more nuanced, a mixture of unproductive goals, egos, and bureaucracy.
Aligning the company mission
Consider the company mission as the overall goal of the business, anything from, say, retail transactions to producing an app that improves productivity. The strategy then is how the company will achieve that goal. And quite often, the method the salesforce is using to cut deals is something else entirely.
Luckily it can be fixed, sometimes the solution can be as simple as encouraging lower-level managers to work together more effectively, said Patrick Shea, co-founder of AdDaptive Intelligence. Shea’s Boston-based company produces software that uses data and artificial intelligence to merge advertising and marketing strategies. He has worked with companies where the sales departments are selling something that isn’t part of the company’s mission.
“You can imagine how it happens: a start-up scales up quickly, and the sales force comes on without a lot of communication about the bigger mission,” Shea said. “Then, from one sales person to the next, you don’t get a consistent message about what the company does.”
Change begins by making sure everyone understands the company’s mission, no matter how big or small the organisation might be. That involves making sure sales staff are informed and talk to, say, people on the development side, a task that can sometimes be made difficult if some employees work remotely or are in different office locations. Good managers, Shea said, will also ensure there isn’t unhealthy friction between the sales staff and the people designing the products.
“Everyone in the company needs to know, this is who we are and also why we are here and why it matters,” Shea said. “When there’s passion through the company, it’s much easier to teach the mission.”
The problem frequently arises when ambitious sales goals are set for sales staff in high-pressure environments, said Lionel Sitz, professor of marketing at EMLYON Business School in Lyon, France. “In most cases, strategy and sales are torn apart by trying to balance long-term strategy with having a sale at the end of the day,” Sitz said.
In most cases, strategy and sales are torn apart by trying to balance long-term strategy with having a sale.
A sales team that’s rewarded simply by hitting a monetary target will sometimes promise things that aren’t part of a company’s strategy, Sitz said. That can change by adjusting the way people are evaluated, with more long-term goals and metrics that involve more than just a new sale.
“This is often, for a lot of companies, a widespread change to the office culture,” Sitz said. “There are two things that go hand-in-hand. You have to start with a new metric to measure success, and when you have that metric, then you can change the culture.”
McCarthy saw that at a former job he held, working at a software startup company. The CEO had been in the top 1% of sales people at one of the world’s largest computer companies. He was a renowned closer, McCarthy said, with the ability to convince the person sitting across from him to sign a contract. But the problem was, he could never say no.
He had promised an advanced system that went beyond current technology.
“At one point, he promised a potential client that the product would include a sophisticated artificial intelligence,” McCarthy remembered. The problem was not only that the company hadn’t been working on A.I. – he had promised an advanced system that went beyond current technology.
Still, watching his former boss, McCarthy realised the need to react to what customers wanted. At McCarthy’s current company, most of the software he has built was the result of feedback from his 35-person sales staff, like the nudge email that now goes out to people who stopped shopping mid-purchase.
“If you think of strategy as the main idea of a company, then sales should be out there selling that strategy,” McCarthy said. “The problem, as they say, is that no strategy ever survives contact with the marketplace.”
So a good manager will learn how to adapt to the marketplace – while also keeping everyone in the company passionate about the new strategy.
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