Sales Insights September 2021

September 7th, 2021 by Nathan Hobbs

Keeping Up: A Changed Market Calls for Shifts and More Shifts (Including Paradigms)

By Dave Yoho

In early 2020, when the pandemic reared its ugly head, most businesses were not prepared for how to react. Companies that were introspective made modifications to meet the needs of a changed marketplace. Others had knee-jerk or “laissez faire” responses. Amidst the chaos, where could positive developments be found?

The more ingenious and innovative companies found glimmers of hope. Most forms of advertising were dramatically less expensive, so adventuresome entrepreneurs set new standards.

Now reality has set in. During 2020, many companies experienced higher levels of customer inquiries, more cooperative prospects, advantageous consumer financing techniques and in the end, their “new” sales were higher than anticipated or projected. In a state of newfound euphoria, many built larger sales and marketing teams, and some opened up “virtual divisions” as an extension of their workforces. In fact, business was so good, and anticipation was so high, it was a shocking development when many companies couldn’t install their products at a level that met new contracts being sold.

Taking the Bad With the Good

The home improvement industry faces unique problems in sales and marketing. Companies advertise and sell an “unfinished product” and a heavy reliance is placed on the ability to install. There is a saying in modern philosophy, “Within every good thing, there is a weakness, and from every weakness can be built a strength.” Finding methods to accommodate this paradigm shift and create strength from an inequity often is viewed as painful and expensive.

As an example, even the most competent small business owner, certified public accountant, or business expert finds it difficult to understand that a successful sales and marketing organization requires fully loaded marketing costs that frequently exceed 15% of sales revenue. Add to this the frequently overlooked need to train someone to respond to prospects (leads) with a format that enables them to understand “value over price.” The complexity of this conundrum increases when one considers how individuals are hired and trained to become qualified sales representatives.

So, what primary challenges exist? At the top of the list is the backlog of uninstalled sales and the “cycle time” (the period of time inclusive of the sale being made, scheduled, qualified, product installation, and full customer payment). Prior to the beginning of 2020, some of the most efficient organizations measured their cycle times at 40 to 60 days. Others efficiently produced a completed installation in four to six weeks. That was then. Now, the customer is often told the wait will be four to six months—the outgrowth of which creates cash flow problems, re-adjustment of consumer financing arrangements, cancellations, and all-around customer dissatisfaction.

Forward-thinking companies are finding modern ways to hire and train needed staff while structuring their systems to economize lead development, reduce marketing costs, improve the efficiency of their sales and marketing staff, and reduce cycle times. The key to your success for the remainder of 2021 and beyond will be predicated on addressing these and future challenges with a scientific approach and direction.

Dave Yoho is president of business consulting firm Dave Yoho Associates.
dave@daveyoho.com

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