The better part of a decade ago, I’d just taken on a new sales territory, with a new company. It was in a market place I didn’t know with a product I knew nothing about and customers I’d not yet met. In other words, I was starting from scratch with no real idea.
That particular morning I’d picked up the keys to my hire car and headed to meet my new boss to discuss the company and the territory.
We sat for a couple of hours discussing the intricacies of the business and I left that meeting with three things. Firstly, a product catalogue with lots of numbers and descriptions and prices which meant almost nothing. Secondly, a crumpled piece of paper from a spiralled notebook with a list of my new accounts on. And thirdly a feeling of, ‘where do I even start?’
I’d taken this role because I wanted something new – something that would be an exciting challenge – and had left behind a job which I knew how to do, in a company in which I was well-known, and with lots of opportunity in front of me.
It didn’t start well.
That first year was a disaster as measured by pretty much every metric. At a time when we were expected to grow at 10%, I finished the year negative 10%, got kicked out of accounts, struggled to see existing customers, lost legacy business, couldn’t recruit to any events, and ended up in the bottom handful of sales people in the company. On sales performance alone I should have been fired.
However, fast-forward 12 months and my territory had grown by 23%, I was being invited back to accounts that were previously lost and was being proactively called by customers offering me business. In addition to recruiting for events, I was running my own and ended the year as one of the top handful of sales people in the company.
The third 12 months followed the same pattern.
So what had changed over that first year to so significantly impact performance in subsequent years?
Sure, I knew more about the company, the product and the customers. But those weren’t the things which made the difference. The difference came after learning the following four lessons. And then doing something about it.
Results will always lag activity
Regardless of the length of the sales cycle, there’s a lagging effect between energy (activity) and results. In some businesses where there are higher switching costs or higher value purchases and the cycle is longer, then the lag can be greater; conversely in an industry where purchases are of lower value or there are lower switching costs, the lag can be shorter. Regardless though, there is a delay between the activity and the net result.
Whilst it may be obvious that this exists when starting out – the reason why sales people are often given a period of grace or why new start-ups should have a cash reserve – the same is true during times when results are good and growth is on the up.
At these times, it’s often the cases that the individual’s activity can drop – either because they’re seeing the positive results and thinking they’ve made it, or due to some seasonality – yet results continue to increase. It’s only when there is a noticeable decline in performance or results that there is the incentive to accelerate activity again by which point there’s a large delta and prolonged lag before results can follow and pick up again.
So the key here is knowing that there is a lag in the first place and being willing to allow for that period initially, but also ensuring that activity is maintained at a steady constant in order to realise continuity in performance.
Note also that current results are therefore not an accurate predictor of future performance. But activity is.
Frequency is the multiplier to increasing results
In the equation below, F equals Frequency, Q equals Quality and D equals Direction. In other words, results are a combination of Quality of activity and Direction of activity multiplied by the Frequency of that activity.
Put another way, you can do great stuff with the right people – but if you don’t do enough of it then results will never be what they could.
Although a rudimentary measure, it’s why call-rate and productivity metrics are so commonly used to assess performance. It’s important though to not fall into the trap of neglecting the Quality and Directional elements of the equation. After all you can be the most productive person going, but doing stack loads of the wrong stuff with the wrong people will lead to poor levels of motivation and equally poor results.
Results follow as a consequence of doing the right stuff, in the right way, with the right people
This speaks to the Quality element of the equation above and breaks it down even further.
Another way of defining Quality of activity is doing the right stuff, in the right way, at the right time. And all three parts need to be in balance.
Do the right stuff in the right way but at the wrong time in your business relationship and it’s not going to succeed. Similarly, doing the right stuff at the right time but in the wrong way will lead to poor results. And of course, if you choose the wrong activity, then no matter how good your execution or timing, things aren’t going to work out too well.
Sustainable results follow as a consequence of balancing short and long-term activity
Put another way, there’s a real need to balance activity which will pay-off in the short-run versus activity which will pay-off in the long-run.
By definition, long-term activity is often more time-consuming, costly and protracted, but on the flip side, is likely to deliver greater or more sustainable results. Short-term activity on the other hand delivers more instant gratification but is unlikely to scale or create sustainable growth.
However, both for sales people and small business owners there needs to be a mix of the two – and a mix of Frequency, Quality and Direction – enough of the right stuff, in the right way, at the right time, with the right people.
Understanding and applying these four principles made all the difference when running a sales territory and provided a method to categorise and manage activity.
For ultimately it’s activity which drives results and why getting that balance of activity right is the only way to turnaround a failing business or sales territory.
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