As we move into what promises to be a challenging year, sales managers are facing the age-old issue: How do I make my business revenue goals amid rising interest rates and tighter underwriting guidelines? A tough combo. For many sales managers, the answer is to add “more feet on the street.”
While this strategy has long been revered by mortgage lenders as the solution to volume and revenue challenges, research reveals that “more feet on the street” is not profitable in the long run.
An excellent Harvard Business Review article, “The New Science of Sales Force Productivity” addressed what works in achieving those goals. The article stated that the traditional response of hiring more reps doesn’t work anymore because the driver of revenue growth is a fickle customer. Brand loyalty doesn’t have the same impact it once did.
When the world was simpler, adding more originators and hoping that some of them would save the day used to work. But today the wing-and-a–prayer style is glaringly out of place. Treating a client to golf or other perks does not close the sale because it doesn’t help the customer make the best decision. Customers want expert sales consultants.
What works? The savviest sales leaders recognize that as times change, so must their sales organizations. The best in the industry are reinventing their sales approaches to respond to new market environments i.e., social media is seen as the new telephone and recognized as a fundamental part of their customer contact strategy. They are boosting their sales originators’ productivity by installing processes to ensure they deliver a consistent brand image to the marketplace. Smart managers are using data, analysis and processes. They are taking a scientific approach to sales and origination vs. a strategy based on wishful thinking.
The funny thing about hiring more sales professionals is that it appears to be reasonable and it should succeed in sales organizations. But according to the Harvard Business Review article, data supports that the cheapest and most effective route to increasing sales performance is through the use of four levers:
• Customer targeted offerings
• Optimized automation
• Systematic procedures (If your sales processes are haphazard, you cannot win the sales game!)
• Performance management (This lever is the most important in my opinion because it is the one consistent with what I see in poorly run organizations where there are no standards and measurements to hold originators accountable—a fatal combination.)
Once all four levers have been installed, only then should a company put more feet on the street.
Is your sales leadership operating on a scientific basis? If not, call me to discuss how to put this strategy in place today. Now is the time is make a change.