Streamlining and efficiency

We can all boost sales performance and efficiency with a healthy dose of sales training, so for a change, I am looking at ways to maximise what you currently have without the need to haemorrhage another budget. When we perform health-checks for businesses, there are a few ‘old-faithfuls’ that crop up again and again.

These are typically: increasing sales, controlling costs, and looking at your people. There are many other areas in a business that can be improved to enhance efficiency but let’s just focus on these key areas.

Increasing sales

A good start point is to look at your sales historically and perform a gap analysis. The object should be to look at what you have sold to whom, when, and for how much. Making the assumption that acquisition of new business is much more costly than existing business, it makes sense to look at your existing customer base and start there.
 
Break down your sales by product type or revenue and work out who you can up-sell or cross-sell to. Up-selling is adding new orders incrementally or extra orders of additional value, where-as cross-selling is where you introduce a new line or product not previously bought by that customer. Focus first on the gaps where clients are either unaware of your other products or services and then concentrate on increasing the average value of the sale.


Clearly you can introduce incentives that will encourage the client to buy more for the trade-off of getting a saving or extra value. The ideal incentive is something that costs you little to offer and yet is valuable to them to receive. This is always a preferable route than discounting. Do remember that the incentives or promotions you bring into play can be limited offers or linked to certain activity in a particular week or month of your choosing.

It is also good to remember that incentives can be aimed at both the client as well as your own sales teams. It is amazing how well they can work. It is also worth thinking about new business—what marketing channels have brought you past successes? Nowadays a good e-mail campaign can be a very economic and cost-effective way to generate new sales. Think about contra deals and synergistic partner-ships that you could use as new channels to reach your prospective clients.

Controlling costs

There are many ways to look at your costs and spending patterns. You could look at stock levels, payment terms, credit facilities, invoice factoring as well as incentives and more draconian measures depending upon your needs. Often the biggest savings can be found by getting additional quotes and having discussions with your preferred suppliers so you can set up ‘just-in-time’ processes so you do not have to have money tied up in stock.


Most suppliers are open to these discussions and as long as they provide decent service level agreements all should be well. Re-visit your payment terms and also your credit facilities. Sometimes it is possible to incentivise early payment and penalise late payment as well. If cash flow is the issue then you can also consider invoice factoring, which will allow you to inject cash into your business for a fee often less than afforded by an overdraft or bank loan facility. If your business offers discounts re-think the stages. Can you adjust your terms by half a percent here or there? It might not sound like much, but can add up to a very considerable sum. The same can be true with shaving off a few pounds off all your key transactions—asking for a new arrangement will often be met with an agreement if it is mutual.



Looking at your people

One of the most overlooked areas where improvements in efficiency can come from are your own people. If they are motivated and engaged they can be (and usually are) your greatest asset. Do your managers know what their motivators are and are they pressing the right buttons? According to experts like Frederick Hertzberg, the key satisfiers are recognition, achievement, responsibility, and job satisfaction—the good news is that it does not cost money to implement these changes. Staff incentives and a positive working environment make such a difference to productivity.



Many a time targets have been smashed because the will of the team despite adversity. Again incentives can cost you little to offer but worth a lot to them. You can be as creative as you like, but focus on the things they value, not the things they complain about. Improving the IT or better lighting in the office will stop the complaints about the things you fix, until their focus falls on another area. If however you concentrate on the satisfiers you will boost morale and productivity. Indeed, recently you may be aware from the news that Richard Branson has announced he wants his staff to take as much time off as they want as long as targets are met. It sounds compelling to give the staff the thing they value the most preciously—their time. Seems like a win-win?

Key actions:

• Look at your sales historically and compare current performance
• Introduce client incentives to stimulate bulk purchases
• Re-assess cash flow and how to free it up (e.g invoice factoring)
• Renegotiate with suppliers on ‘just-in-time’ delivery
• Focus on staff well-being and motivation

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