Vilfredo Pareto was an economist who is credited with establishing what is now widely known as the Pareto Principle, or the 80/20 rule. When he discovered the principle, it established that 80% of the land in Italy was owned by 20% of the population. Later, he discovered that the Pareto Principle was valid in other parts of life. In general:
80% of process defects arise from 20% of the process issues!
20% of your sales force produces 80% of your company revenues!
80% of delays in schedule arise from 20% of the possible causes of the delays!
80% of customer complaints arise from 20% of your products or services !
How is it for you and your solutions ? Do 20% of your solutions produce 80% of the results?
How much of your company’s resources do your sales reps waste by taking 100% of your product offering with them on a sales call, but onlyselling 20%?
It doesn’t take much effort to realize that one of the critical methods for increasing your revenue is to sell some of those other products that never get much attention. Whether your product line is comprised of new releases, a broader product offering due to an acquisition, or your portfolio has been around for some time, generating untapped revenue is at your disposal. Like it or not, most sales organizations suffer from this 80/20 rule when it comes to selling across abroad product line. One of the most painful components is the introduction of new products. Most organizations pour a tremendous amount of resources into speeding up the development process and measure themselves on time to market; however, most organizations do not measure “time to revenue”, which is a critical look at how fast the revenue ramp is for new products once they are available.
Tuesday, 29 April 2008
Monday, 21 April 2008
Managing Sales in a Down Market
I am not sure if you can remember when Dennis Connor was out to recapture the America’s Cup in 1988? The race was scheduled for the California Coast just off of San Diego. Behind a veil of secrecy, the American team shocked the sailing community by building and sailing a catamaran that met the specifications of the 100-year-old design standard. Even under the protest of the opposing teams, the committee had to allow the boat since it did meet the specification formula, albeit not the intent.
Dennis and his team realized that sailing in the gentle breeze of California was much tougher than the strong winds of the East Coast or other popular venues for the competition. It was a condition that favored the light wind planing design of a catamaran over the displacement design of a sloop.
Try as they might, the opposing teams could not present a challenge to the catamaran. Even if they were the best sailing crew, their vessel design was best suited for high wind, not the slow gentle winds off of San Diego. Connor and his team easily defeated the New Zealand challenge 2-0.
If we consider the boat as the analogy for a sales management framework, the wind has changed. The slowdown in the marketplace has taken the wind out of our sails, but it doesn’t mean we can’t win a race. Most sales managers have less than 5years experience, which means they have developed their management skills during a growth, or high wind, market. Many of them may have never faced a tough market as sales people, or as sales managers.
Much like sailing in radically different weather conditions, the skills required to succeed in a growth market are much different than the skills required to succeed in a slower market.
www.paul-cunningham.co.uk www.messagemanagement.com
Dennis and his team realized that sailing in the gentle breeze of California was much tougher than the strong winds of the East Coast or other popular venues for the competition. It was a condition that favored the light wind planing design of a catamaran over the displacement design of a sloop.
Try as they might, the opposing teams could not present a challenge to the catamaran. Even if they were the best sailing crew, their vessel design was best suited for high wind, not the slow gentle winds off of San Diego. Connor and his team easily defeated the New Zealand challenge 2-0.
If we consider the boat as the analogy for a sales management framework, the wind has changed. The slowdown in the marketplace has taken the wind out of our sails, but it doesn’t mean we can’t win a race. Most sales managers have less than 5years experience, which means they have developed their management skills during a growth, or high wind, market. Many of them may have never faced a tough market as sales people, or as sales managers.
Much like sailing in radically different weather conditions, the skills required to succeed in a growth market are much different than the skills required to succeed in a slower market.
www.paul-cunningham.co.uk www.messagemanagement.com
Saturday, 5 April 2008
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