At the origin of HeadsUp is the will to share a point of view:
1- What if Profitable and Sustainable Growth was ALWAYS possible ?
2- What if harmony between employee, shareholders, and leadership, at the service of customers was ALWAYS possible ?
3- What if we ALREADY have in our hands all the knowledge we need to succeed ?
However, that is not exactly what we perceive from the media, and in the corridors of our companies … Instead, without too much effort, we can hear things like:
1- “Growth comes from market and economical context”; “Growth depends on investments (new products, competitiveness, hirings …)”;
There is a belief that Growth happens independently from us, that there is a need for something else to trigger it. In some languages, like french, the verb ‘to grow’ (fr: ‘croître’) is intransitive, so that it is grammatically impossible to grow anything.
2- “What benefits to shareholders can only be at the expense of the employee”; “What leadership decides is not always to the benefit of the customer”; “What serves employee development is often perceived as decreasing shareholders benefits”.
There is a belief that in the four variable equation of business (Customers – Employee – Leadership – Shareholders), what serves one deserves others.
3- “In order to make that decision, we need more information about the market”; “I do not have access to the necessary data”; “I only have my guts to trust for this call” …
So … let’s agree to take these three postulates as true for five minutes.
I) So … So if it is true that Profitable and Sustainable Growth ALWAYS exists, then it means it does not only depend on those things that fluctuates (economical context, product offering, services, markets …). And the hints are there : every company that equips its sales force with a sales intelligence application will see its conversion rate rise from 44% to 57% (2013 averages), that is 30% growth! Without changing products offering, nor hiring, nor market !
There is a reason why these applications have such an impact on results:
– 73% of Requests for Quotes are not ready and mature enough to lead to an order … however 44% of companies do generate the quotes without having any sort of consistent qualification process in place … That is a potential for Growth!,
– 82% of companies do not take job or customer profitability into account until the last stages of negotiation. They do quote and follow-up on their jobs and customers without giving priority to the profitable ones, nor excluding the unfavourable ones … That is more potential for Growth!,
– 48% of sales persons never call back on a prospect. Never. Not because of a conscious decision they made, but simply by lack of time / priority management (in 2013: 59% of working time of sales people is spent on task that are NOT related to sales) … This is more potential for Growth!,
The untapped potential for growth is here. For any sort of business: Improving conversion rate by 2 points (from 44% to 46%) will result in 4.5% of Growth and 1 point additional profit (EBIT). Try this maths on your P&L.
II) So … So if harmony amongst the company and between employee, shareholders and leadership, at the service of Customers is ALWAYS possible, then it means there is a place where everyone’s expectations are met. Let’s take the sales teams as an example: they do have Orders targets. This point where everybody meet expectations is right in front of us: When sales people make their targets, then Leadership delivers on plan, and shareholders are satisfied. Just like dominos … as long as the cascade starts in the right place: Sales people … and employee in general.
The employee are the players who must win to ensure everybody wins. Harmony between all depends on enabling employee to reach and exceed their targets. That will enable Leadership and Shareholders to reach their plans and invest a part of benefits back into the company to keep up the momentum. Some in Customer satisfaction, some in product innovation, some in employee development and motivation …
III) So … So if we ALREADY have in our hands all the knowledge we need to succeed, then it means this knowledge is present in our various systems, ready to be used when we need it, where we need it.
With this postulate in hand, we went searching for the data available in every companies. We’ve defined the key business decisions to be taken, and finally we’ve developed the necessary calculations to turn these data into knowledge available at the time of decision/action. Surprise: It is possible!
Here is an example: For a sales person, one of the key decision, every morning, is to choose between Prospecting to maintain activity level, or Following up on existing jobs and customers in order to close enough orders to reach the month targets, or finally to go to the office (meetings, proposal reviews, support …).
The sales person cannot do all three at the same time … so which one should be today’s priority ? If he/she focuses on following up on jobs, when his/her prospecting level is insufficient, then he/she will take care of the wood and miss the fact that the tree is the problem. And vice versa …
The necessary knowledge to make the right decision here are:
A) Which of the three actions will have the greatest impact to reach targets ?
B) Which sales actions have most potential to exceed plans ?
What are the data, available in every business, that will get us to this information ?
1- Every month, somewhere, we store :
- The identified leads,
- The quotes sent to customers,
- The orders we won,
2- Somewhere we have the orders plans for the month/year,
3- Someone has an idea about the estimated date when the current pursued jobs will close,
4- Someone knows on which jobs Sales persons work as Risks and Opportunities to reach plan,
From the first item, and available basic stats tools, we can calculate the historical rate for converting identified leads into orders, adjusted for seasonality. For each sales person in the company.
Compared to the second item, we can see if the current average prospecting level is sufficient to deliver on future plans. If that is not the case, then we can calculate by how much this person should rise his/her prospecting level to allow for future targets.
Introducing the third and fourth items, we can calculate the potential residing in the current pipeline in order to close gaps to plan, and the relative impact of on-going sales actions.
And Voila: we now can tell which of the three actions will have the greatest impact to reach targets. Of course, such calculations would take months by hand, even with the help of excel spreadsheets … However, with the help of current databases technologies it only take but a few seconds.
Moreover, as we store requests for quotes from customers all year long, we can build a view of the (minimum) potential these customers offer on a yearly basis. And that can be done by product line, by vertical market … Taking it from there, we can cross reference with the items above and we can now tell which actions have most potential to exceed plans. And here we are: At any time, any sales person can know what will best allow him/her to reach and exceed targets. This person also knows how much prospecting has to be done every month to ensure future plans, and how much potential is hiding in the pipeline …
Similar approach can be applied to numerous sales decisions such as:
– Out of X requests for quote, which should be handled in priority? —> We can cross reference the customer average margin levels with the historical conversion rate for this customer, and with currently available information discovered on this job. We can plot all RFQ’s and now compare them in a visual way on the values they represent for the company versus the cost/effort it will take to close them. Suddenly selecting the jobs with the best Value vs Effort ratio is a straightforward process,
– Out of X market segments, where to go prospecting? —> We can calculate the markets where customers have the shortest buying cycles, with the best margins compared to business average, and where you have the best success rates with positive growth. Would that help?
– Out of X customers to be called back, which one to call first? —> We can tell you which have the most active profitable quotes with the highest historical success rates. Now everybody is calling these first. How would that affect your business profitability?
– etc …
There have never been so many data available in our companies. It’s not data that is lacking … we are inputing data every minute, every day. Some of these data, like customer name, job name, product reference are even manually input over 40 times during the job lifetime! What we lack is the conversion of the data into knowledge!
At the end of the day, the most difficult is to believe in these postulates and act upon this belief … It’s to take the risk to believe in our untapped reserve for Growth through Productivity … It’s to make the effort to providetools that are centred around the missions of our employee to put their success first … It’s to demand our Systems and data bases to give us back the knowledge we need to succeed.
That point of view is the foundation of HeadsUp, and one we share with our customers: Let’s take profitable and sustainable growth back into our hands!
Have a brilliant day, and make it count !
Your HeadsUp team.