Scaleup Business February 19, 2019

Building a sales engine for business growth

Building a sales engine for business growth

When it comes to accelerating growth and scaling up businesses, there are few people who know more than Nicola Cook.

The writer of two international bestsellers and a recent addition to the Smith and Williamson Power 100, Cook’s Vistage talk, ‘Building a Sales Engine for Growth’, gives business leaders a strategic, methodological approach to managing growth and scaling up.

We caught up with her to find out exactly what that method is and why it works.

Vistage: Thanks for speaking with us, Nicola. The first thing we wanted to talk about is the terminology you use. Your talk is called ‘Building a Sales Engine for Growth’; why ‘sales engine’ as opposed to ‘sales process’ or ’sales team’? Is there a specific reason for the term?

Nicola Cook: Absolutely; it comes from experience. The first ten years of my career were spent in a big corporate. I followed my nose through the sales channels and ended up as Director of Sales and Marketing at quite a large blue chip. Then, I made the crossover when I got a phone call from a friend of mine who had a small service-based business. When I say small, I mean there were five employees at that point, just about to move out of his house into an office. I took the job because it fitted with my life at that moment - I was getting married and I was in a big job where I was up at 4am every morning, driving for 6 hours before I’d even started the day.

I thought, ‘This is local, this will be easy. It’s a small business, how hard can this be?’ Of course, I walked in there on day one, and I found out. I was asking what I thought were very straightforward questions, like: ‘What’s the marketing strategy?’ They’d go, ‘What’s one of those?’ I’d say, ‘Who’s our ideal customer?’ They’d say, ‘Well, anybody who’ll spend money with us’. ‘Where’s your data?’ ‘You see that big pile of paperwork in the corner? Those are feedback forms for every programme we’ve ever run.’ I suddenly realised that, actually, most small businesses don’t know how to scale an engine for growth.

In that start-up, I couldn’t use the same strategies that I’d used when I was in a big corporate, because I didn’t have the weight of a very big brand behind me - I didn’t have a long runway of cash. I call it an engine because I realised that at the big corporate I had been part of an existing engine, one based on four key principles: strategy, team, tools and tactics. When you combine those four things together, that’s when you can really start to accelerate your sales activities and sales performance.

V: Did working for that start-up make you realise there was a gap in the market for what your company now offers?

NC: Yes. We grew that company into a multiple and it was at that point I recognised there was a need to solve this problem that small businesses have. There are a lot of people doing ‘sales consultancy’ and there are a lot of small businesses spending a lot of money trying to solve this problem. This mistake is usually down to one of three things, which I see time and time again.

The first is that they’ll go out and hire a really expensive sales director who they think can implement the change, but unless they come from a background where they’ve taken a business through a scale-up, they won’t have the experience or the knowhow to do that. What they’re most likely to do is spend a lot of money building a pipeline - in theory - that does nothing, and you’ll be out of cash before that pipeline converts.

The second mistake people make is they try and hire a “sales team”, whatever that sales team might look like. If you don’t have the strategy, the infrastructure, the processes, the leadership and the foundations in place to create and scale, again, they’ll be lost, and they’ll underperform. The call that I often get is, ‘Nicola, I’ve already got a sales team, but they’re rubbish, can you come and train them?’ The answer is, ‘Yes but that’s not the only thing that we do’. We have to fix the fundamentals first before we work out what sales training they need, because not all sales people are equal, and it depends on the market, your sales process, the route to market and your buyers’ journey.

The third mistake is that they try to fix the problem by implementing a massive bit of technology, so I get a call saying, ‘We’ve just spent £50,000 on Salesforce but it’s added more complication to what was already a complicated process’, and I go, ‘Well, have you mapped the process first?’ They go, ‘Uh,’ and I go, ‘Right, that’s where we need to start, we have to backtrack’.

V: So you offer a system for getting the fundamentals in place before trying to scale and grow a business?

NC: Exactly. The sales engine is built on a model that we’ve named ‘SAM’. We’ve copyrighted that, and it stands for ‘Sales Acceleration Model’. It’s built on the four key building blocks, the first of which is sorting out your sales strategy. The question is: ‘How the hell do we actually deliver?’ I go into companies and they say, ‘Right, well, we’re a £3.5 million company and we’ve written a vision, we’re going to get to £6 million in the next three years,’ and I go, ‘Great, how?’ They go, ‘Well, we’re just going to sell some more stuff,’ and I go, ‘How?’ That’s the bit where I come in and go, ‘Right, now we need to start breaking this down into a plan’.

V: So where do you begin? How do you create that plan?

NC: I start with six key questions, and these underpin the need to understand your sales strategy. Number one is: do they have a UDP (unique differentiating proposition), and is it understood by everyone in the business? Do they have something, even in the form of a differentiation through IP or a position in the marketplace or a combination of the way in which they deliver their services or their products, or a niche of some way that they absolutely own? It’s about finding something that is ‘their thing’, that allows them to accelerate and elevate above their competition.

It’s not the same as a USP. A USP is the benefit of the product or service you deliver; a UDP is more strategic. You might have lots of products and services in your business and each one of them will have a USP. A UDP is one, single thing that overarches everything and differentiates you from your competition. It needs to be clearly defined in visual form, in words, through actions and through proof. That’s the first thing that I look at.  We say ‘Okay, that’s the vision, so how do we take that vision and put it into something tangible?’

How do you take your business vision and turn it into something tangible

Number two is: do your sales force understand your target avatar? This is all about priorities. If you give your team a choice of four tasks that need to be completed by 5.30 and it’s 4.50, which one do they choose? Unless your team understand who your most profitable opportunities and avatars are, they’ll do the easiest thing. They won’t make their decisions and choices based on profit and growth. That’s something that I call ‘profit priorities’ in business. If you’ve really taken those personas and put them into my avatar system which is: ‘We understand that we have three different types of avatar and they are ranked in this order in terms of profit for the business,’ then it’s very clear. For the company, I would normally name them after real customers.  They’ll go, ‘Well, that’s Bob,’ and everybody knows who Bob is. When you see a Bob, you’re going to prioritise him over John. Then it becomes really easy to implement.

The third one is, have they mapped and understood their route to market or their business channel? What’s their business model, how are they going to reach their customer? The way that people buy has changed dramatically. I come from a world where, in B2B, if you wanted to grow a sales team, you just hired more reps, stuck them in cars and sent them out of the office. If you were in retail and you wanted to reach more customers, you either went to more exhibitions or you walked to more stores.  That was how you scaled. These days, it’s a lot more complicated, because there’s an irony in the psychology of how customers want to engage with you: people hate being sold to, yet they love the experience of buying.

Number four is, can they deliver this at a profit? You have to ask: How much does it cost us to win a piece of business? How much does it cost to win a lead? Number five, do they have control over and an understanding of the timescale within which sales activity turns into profit? Then, the sixth one - once you’ve answered all those questions - is it resourced well? That’s when you start thinking about team: team structure, team competencies. What will the marketing function look like? How do we pass things over? It’s definitely not just about hiring that sales person who’s apparently going add x many noughts to your turnover. It’s about breaking this down and then working out where the key resources need to be. All of these six questions lead into processes.

V: Does all of this filter through to the entire team? Not just the sales team, but everybody in the business?

NC:  Absolutely, yes. The key frustration in scaling up businesses for entrepreneurs is ‘How the hell do I get all this stuff that I do instinctively out of my head and into the day-to-day decision making, operations and function of the team?’ In the olden days, there was a really clear crossover between the function of marketing and the function of sales. Marketing’s job was to find the market, create the messaging, raise brand awareness and generate more leads. As soon as those leads were generated, it was ‘boom’: over to the sales team.  

Now, because so much of this happens online, because people are doing all their own research, it’s created this grey and muddy area, where the middle part of the sales journey is now happening in the digital space and customers are on a journey where they do their own research.  They’re not raising their hand saying, ‘I want my questions answered’. Normally, they’re starting the sales conversation at the point of negotiation. The first time your business knows that this is a prospect is when somebody gets in touch with you and asks, ‘What’s your best price?’ Meanwhile, your “sales team” are going, ‘Well, hang on a minute, can I just ask you some questions because I need to re-qualify you to find out what the best solution is for you’. Your customer’s going, ‘No, no, I’m not interested in that, I’ve educated myself. I know what your prices are, I know what your competitor’s prices are, I’ve done my own homework, just give us the best price.’ It’s created a problem in the middle of the sales process that I have a word for - no surprises. Are you ready?

V: Yes, tell us.

NC: I call it ‘S’marketing. Who owns that bit of marketing: marketing or sales? Actually, it’s a combination of both those skillsets. That’s the challenge with understanding the new routes to market and how to build a process behind that.

V: How granular does this process get?

NC: All of this stuff has to be mapped out in detail. You have to define the language that you’re going to use. What is a lead? What is a prospect? What is an opportunity? What is a customer? What is a sale? What is an order? Depending on your sales model, some people don’t invoice revenue until after something has been delivered or goods are out the back door. Is that sales and then revenue, or is it orders and then sales? You have to be clear about this, otherwise you just can’t scale. That comes from that bit of the process, if you like. After that, it’s really just about understanding the metrics of your company. I say that within every business lies an algorithm. Your job, as the sales growth champion, is to understand that algorithm so that you can then scale it. That obviously comes from measurements and reporting and process and making improvements, and then measuring those changes.

Things like understanding your lead pipeline are not just about knowing the time it’s going to take from sales activity to turning profit, it’s things like: ‘Can we do this at a profit-basis?’ ‘What is the lifetime value of a customer?’ These are all the numbers that I’ll start digging into. Things like average order value, average order frequency, product penetration across an existing client base. So, when a company says to me, ‘We’re at £3.5 million, Nicola, we’re going to get six,’ I go, ‘Great, how?’ They go, ‘Well, we’re going to sell more,’ and I go, ‘What does that mean?  Are you going to increase your average order value? Are you going to increase your average order frequency? Are you going to go out and get more new customers? In what kind of market? How much is it going to cost you to win those customers?’ That’s when they start to look at you with goggle eyes and go, ‘Oh, okay. It’s not just about training our team on closing skills then?’ I go, ‘No, it’s a little bit more than that.’ You’ve got to understand all of those numbers to make sure you can win business at a profit over the lifetime of the customer. You’ve got to understand the timescale, so you know what the run rate for your working capital’s going to be in order to turn an investment and resources and time and energy and marketing into profit.

V: What is the role of the leader in this whole process?

NC: The role of the leader in implementing the SAM model to grow a sales engine depends on the size of the company when they’re at this point. If they are an owner-managed company, which a lot of Vistage members are, they might be wearing the MD hat and they might have a finance director and an ops director, but very often, they are also the sales director at this stage.  Therefore - and this is where the heroic sales leader problem comes in - they’ve basically built the engine, as it stands, around them. They don’t know how to disseminate that in order to remove themselves from that part of the process. They’ve built a system where, basically, all the key client relationships are with them, everything goes through them.

They are involved in so many touchpoints of the customer journey, and their relationships are so valuable to the business that they think it’s impossible to remove themselves. There can also be some ego stuff in there like: ‘nobody knows it better than me’, ‘nobody knows the client base better than me’, ‘nobody knows the benefits better than me’. Maybe they’re the God, as we would say up north. Maybe they’re the personality or the front man. You often get MDs that have big personalities. They would maybe not call themselves the sales person, they’ve never worn that hat, they’ve never had that career, but because they’ve grown their business up from where it is, they’re passionate about it, and that passion comes across. That’s the first big challenge.  

V: So how do you talk leaders down from their ‘heroic leader’ positions?

NC: I have to work with them to build the foundations to allow them to remove themselves from the sales engine. The important thing is not to just cut them out and hire somebody else, but to do all the other little pieces first, and then we start to build it up to the point where they’ve got a team that are experienced, and we can start to hand relationships over. If it’s a slightly bigger company where we already do have a sales director or head of sales in place, this can’t happen without both of those key decision makers’ input and influence. This isn’t something that MDs can just delegate down into their sales team and not have any awareness of.  

The great thing about Vistage is that they really encourage that.  When I do my Vistage talks, I often find, in the workshops that I run, they’re double numbers. Everybody brings along their sales guy, and they go through the material together. It might be that the head of sales is responsible for implementing the actual stuff, but under and with the collaboration of the MD’s strategic direction. The last thing you want is a sales maverick going off and setting up something that doesn’t fit with the company vision and the company strategy. You have to work together on this. I might say something quite controversial now. I once had a very heated standing argument with a leader of another membership group. He basically argued that sales was a function of marketing.  I argued the point back that no, in my head, marketing is a function of sales, and the reason I say that is, you can get quite a long way in a business without a marketeer or without a marketing function, but you can’t get anywhere without the sale. Every business has to have a sales engine, even if it’s not even identified as that yet, in order to operate.

I get really frustrated when, again, a lot of people put a lot of faith and a lot of money in “marketeers”, thinking that’s the way to solve this problem. Marketeers are fantastic, and they are needed, and depending on what you sell, they have skills sets that I absolutely can’t replicate. But, if they don’t think about how their suggestions will actually convert into something that turns into profit, I get a bit, ‘Oh, what’s the point?’ It doesn’t have to be perfect. ‘Stop redoing your website. You’ve had five websites in three years, this will do.  It will do for what we need to achieve.’ It’s never going to be perfect, just let’s get on with it. That’s the message that I sometimes have to give to people: let’s just get out there and get on with it.

V: Looking at the four elements: strategy, team, tools and tactics, how do you define these four principles and how do you apply them?

NC: Strategy is just the six questions we talked about. Once the strategy is in place, that opens up the question of team; namely ‘What type of sales team do I need?’ Just to give you a visual on this, the sales teams that we used to build, particularly in B2B, looked very much like carrot beds. At the top, you would segment your market, or your sector, based on client criteria. You would normally have platinum, silver, gold and bronze customers, based on value or some other parameters. There’d be a key account team at the top that would take the platinum customers. The gold and silver customers were normally split geographically through a field sales team of some kind. Then, often you’d employ a telesales team that would look after the bronze accounts. That’s what most people did.

As I said before, the challenge is that people don’t want to talk to you, right? The way that I build sales teams now is from left to right. That old model was built on a personality-led sales relationship. You had one rep and one customer. These days, you can’t get a scaler to do that because you’ll have a lot of very highly trained and expensive key account managers or sales people who are doing a lot of very wise work. If you go from the left of the sales journey right over to the close, they’ll be going, ‘Right, Google Analytics, who’s been reading blogs today? Right, who’s new on the newsletter? Right, they’ve opened this, they’ve opened that. Now I need to speak to them,’. If you give them a qualified lead, they’ll go in, do a brilliant presentation, and bring home the bacon.  

If you give sales people a qualified lead, they’ll go in, do a brilliant presentation, and bring home the bacon

What I advocate is to build what’s called a PAM: ‘Passive Account Management system’. Instead of having a one-to-one relationship between a sales rep and a customer, you have a customer who has a relationship with the company. What that does is break the skills sets down from left to right. You’ve got lead generation which is marketing, then that crosses over into a new team.  I call these people ‘inside sales people’. That’s an American phrase that’s been coined in the last few years.

V: Inside sale? We’re not familiar with the term...

NC: Inside sales as opposed to outside sales.  The inside salespeople can be working 10-2, they could be mum workers. I advocate employing a lot of very highly skilled professional women who just happen to be at a point in their life where they’ve got young kids but they’re good at organisation, they’re great at building rapport, they’re commercial. Their job is to pull out the qualified leads and nurture them, and to use that avatar scale to understand which ones need to move forward, and which ones just need to be kept in the holding pattern and nurtured along. Only when they’re ready would they then be passed over to the “outside salesperson”, who would be your more traditional-type salesperson. In a very simplistic way, that’s how I look at sales teams now. That can be replicated based on various factors. You might have different routes to market, or you might have different sectors, or you might have different product specialisms. The key thing is flipping it from a one-to-one relationship to a PAM, a Passive Account Management process. That’s teamwork.

V: What about tools?

NC: Tools are where we start to really map process and to understand the business algorithm.  We ask: what do we need to enable the sale? There’s another phrase from America: ‘sales enablement’. Basically, that just means trying to remove as much friction as possible in the process.  

What customers are demanding, now, is an omnichannel customer journey. They want to be able to connect with you and to communicate with you through their channel of choice, their communication channel of choice - be that Facebook, Twitter, email or telephone. The customer holds the power in the relationship now. We can’t say to them, ‘Well, you have to follow our process, our process is this. We have to design the toolkit to fit the customers’ desired journey, and to enable our sales team to fulfil that in the most efficient way possible. That crosses over into, where is the data? How do the systems all link together?  

We’re not an IT firm and we don’t make any recommendations on CRMs or anything like that. What we do is help clients understand what their needs are in that area, so they can then find the best solution and the best functionality that fits with their legacy system. The other thing that comes out of that is reporting; what metrics to use and what we need to be measuring. Then, the last one is tactics.

V: Just before you get onto tactics, can we ask you about the omnichannel customer journey? How does that work when you’re in a high growth business with a small team?

NC: My advice is to fish in the pond where you have the most most clients. Even if there are other ponds, unless you can do it well, stay away from them. If you try to be everywhere, you’ll spend your whole day doing it. A sales person can spend 80% of their time doing nothing but faffing about on social media if you let them. If your key clients are on LinkedIn, make sure you’re on LinkedIn. Everybody needs a digital footprint, just make it as focussed as it needs to be in order to find that market.

V: Does it come back to advertising?

NC: Yes, it does. I’ve come off Twitter, for example. I still have a profile on there, and I maybe post once or twice a quarter. If people find me there, they can see that we are present but they’re going to realise pretty quickly that Twitter’s not the space to connect with us. If you want to connect with us then come to us via LinkedIn or Facebook or go via our website.

When we do the mapping of the customer journey and the avatars, one of the questions I get clients to really think about is: just before somebody comes into your sales cycle, where else are they looking?  Where else are their eyes? What are they buying or searching for? It could have nothing to do with the value proposition that you have, but it’s the trigger point that leads them into then needing whatever it is that you do. Let’s be visible there.’

V: Thanks. So back to tactics…

NC: Tactics is the final piece of the jigsaw. It’s basically the skill sets and competencies and tactical application of what your team do on a day-to-day basis to execute the strategy. In my world, there’s a mapping exercise that goes on between, ‘What people do we have?  Have we got them in the right roles? Have they got the right competency framework for what we now know we need to build?’ There’s often a gap there. So you have to decide how to fill that gap. That’s where we might introduce some form of skills set learning.

I’m all about culture, and right from recruitment we put the responsibility of learning onto the individual, not on setting the expectation that it’s our job to teach. We use things like knowledge sharing and putting templates in place as learning resources. Every business should have what I call a sales bible. Most business have some form of bible, but we go right down to the nth degree. I always make the joke when I’m talking that if I came into your company and I was writing something and I needed to find the logo for your business, how easy would it be for me to find that as a new person? Would I go into a folder and would I see it there? Or would I see a selection of logos called ‘logo’, ‘logo old’, ‘logo new’, ‘logo 2018’? Which is the right flipping logo?

Then we look at things like: who in the team has the absolute best LinkedIn one-line introduction that gets the most connections? Capture that. Who is the best at lead qualification? Who is the best negotiator? Template all of that, and that goes into your sales bible. Tactics are about implementing best practice in the business. The actions that get you to where you want to go are the tactics. We don’t just say we do this, we define how we do do it.

One of the problems with scale is consistency. One of the definitions of a really good brand is delivering on a promise of consistency. McDonald’s might sell awful burgers, but they are the same awful burgers no matter what’s in my stomach. You know what you’re going to get. You get the same flavours, because they’ve absolutely codified the entire process.

You can do the same with your sales engine so that it doesn’t matter whether somebody first reaches out to you on LinkedIn, or they talk to somebody from your team at a networking event, or they ring up. It doesn’t matter how they come into your company, everybody gets the same consistent sales experience. We always think about this stuff in operations. We always think about, ‘How do we ensure we have quality checks in place and adhere to our own standards?’ Nobody does that, until they meet me, obviously, and they think, ‘Well, how do I make sure that a client that meets Dave gets the same experience as a prospect that meets Nicola? How do we do that?’ It’s not just through training. It’s not just by putting people in a training room and teaching them skills, it’s about asking: ‘How do we tactically apply that on a day-to-day basis?’

V: So what should our readers do next? They’ve read this interview, but what’s the next step?

NC: The first step is, obviously, get to a Vistage event, and start to take away at least the questions you need to raise internally. I think UK Limited is about to have a bit of a shock. All the indicators show that business is going to get tougher before it gets better. That creates both a challenge and an opportunity. If your business’ growth pattern is tied to your market growth, you’re vulnerable. Of course, a truly accelerating business will outperform the market. The good news is that a bit of a shock in the next eighteen months may sweep out a bit of dross out of your market sector. Hopefully not you. There are always the cowboys at the bottom; in every market, they're making a quick buck on squeezing margins and delivering mediocre services and products. They will be the ones that will suffer.  Now is the opportunity to really start to think about this in your business - to not only outperform a market that might be shrinking, but to create a platform so that when the market conditions do return, you are going to be stronger.

My advice would be to start right at the very top with strategy and UDP, and to really be aware of your own market conditions. Your business may be built on a legacy product, or a family business, but really ask yourself: ‘Where is the market going and how can we position ourselves so that we emerge as the leading light in that particular area?’

People worry in sales that if they don’t act quickly, they’re going to lose out. Obviously, I work fast, but twelve months is not a long time in the lifetime of a business. You need to appreciate that you’d be better off taking steady steps over a twelve or a twenty-four-month period to allow you to grow exponentially for the next ten, fifteen years, than trying to rush any of this. All that actually does is drain cash and cause more pain in the medium-term, that you then have to fix.

By 2020, a third of the buying business population, middle management, will be Millennials.  Millennials are the people who don’t remember a life before Google. It’s only another ten years when they’ll be replaced by Centennials, and Centennials are the generation that don’t remember life before a smart device. People like me - I’m in my late 40s - we remember a world before the internet and mobile phones; that was the business world we entered. A lot of MDs who are over the age of 40 who have business processes that they run, that they’ve created, that will become outdated. Now is the time to really address that.  

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