April 25, 2024

Staying Alive: How Our Sales Process Broke Down

Staying Alive

The struggles of a business trying to survive.

Editor’s note: Paul Downs is writing this week about his decision to hire a sales consultant. The series started with this post.

At the beginning of 2012, I had set a sales target of $200,000 a month, and in the first two months of the year, we hit that number. But March came in weak: we sold only $135,732. April was almost as bad, with just $146,677 in new orders. And May was even worse: $114,042. By the end of May we were $200,000 behind our target, and I was worrying about running out of work.

We can generally handle a down month now and then without difficulty, as these are often followed by months in which we far exceed the quota. But three weak months in a row means a serious mismatch between our production capacity and the amount of work we actually have on hand. That’s bad in two ways: first, the missing sales mean less cash coming in from deposit payments, and second, we will eventually have no work to do. I had hired five people in 2011 to ensure that I could get $200,000 worth of work out the door each month. That was now looking like a big mistake. Would I have to lay off all of those people?

Naturally, I spent a lot of time thinking about what was happening, and eventually I decided that my problem was the economy. In the spring of 2012, there was quite a lot of chatter in the media about poor job growth and the possibility of a double-dip recession. I latched on to that story and convinced myself that the problem was out of my hands. I was ignoring the possibility that we simply weren’t doing a good job with sales, mostly because my method had worked well in the past. I hadn’t changed anything about how we made sales, and it just seemed as though that couldn’t be the problem.

But now, when I look back at what was happening, it’s clear to me that there were danger signs I ignored. In particular, I downplayed a couple of big jobs that slipped through our fingers. One, for a large company in California, had seemed to be a lock. Our contact at that company had even told us that we had the job and promised a deposit the following week. But it never came. Instead, I got a call from an office furniture dealer who was providing furniture for the rest of the project, a major office expansion.

He had seen our proposal and said he was very impressed. He called to see if there was some way we might work together on future projects. Or so he said. I spoke to him about how we might collaborate and left with the impression that we would work together soon. But I never heard back from him, and the job we had been counting on didn’t come through either. Eventually, we heard from the client that it “had decided to go in another direction.” The dealer had simply bought the job out from under us. Having seen our product and our pricing, he had come up with a competing offer and price that the client accepted.

In another instance, we put a great deal of time into working with a military client, doing extensive design work, revision after revision, that the client took and used as the basis for its bid package. It went on to award the job to another company, one it had worked with previously. Both of those jobs were large enough that, had we received either of them, we would have exceeded our targets for April and May. And in that case, I might not even have noticed we had a problem. But we are vulnerable when we lose the big ones, because a bunch of smaller orders may not take us to our target. And in this case being played for chumps made a real difference.

As I wrote in my posts last fall about my AdWords debacle, I took my sales problem to my Vistage group in May 2012 and got some good advice — namely, that the problem was not the economy and that I needed to look within my own organization. At this point in my AdWords posts, I spoke about what I did with my campaign to restore a particular type of incoming call.

But I left out the other big change I made in response to a recommendation from one of the members of my Vistage group, Sam Saxton. Mr. Saxton owns a custom stair-making company, Salter Spiral Stair, that is in many ways similar to mine. It manufactures custom items and sells them over the Internet. He told me that he had hired a sales consultant who had helped him double his sales volume in the previous two years, and he suggested that I follow his path.

Wednesday: Meet the Sales Consultant.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

Article source: http://boss.blogs.nytimes.com/2013/06/18/how-our-sales-process-broke-down/?partner=rss&emc=rss

You’re the Boss Blog: How Our Sales Process Broke Down

Staying Alive

The struggles of a business trying to survive.

Editor’s note: Paul Downs is writing this week about his decision to hire a sales consultant. The series started with this post.

At the beginning of 2012, I had set a sales target of $200,000 a month, and in the first two months of the year, we hit that number. But March came in weak: we sold only $135,732. April was almost as bad, with just $146,677 in new orders. And May was even worse: $114,042. By the end of May we were $200,000 behind our target, and I was worrying about running out of work.

We can generally handle a down month now and then without difficulty, as these are often followed by months in which we far exceed the quota. But three weak months in a row means a serious mismatch between our production capacity and the amount of work we actually have on hand. That’s bad in two ways: first, the missing sales mean less cash coming in from deposit payments, and second, we will eventually have no work to do. I had hired five people in 2011 to ensure that I could get $200,000 worth of work out the door each month. That was now looking like a big mistake. Would I have to lay off all of those people?

Naturally, I spent a lot of time thinking about what was happening, and eventually I decided that my problem was the economy. In the spring of 2012, there was quite a lot of chatter in the media about poor job growth and the possibility of a double-dip recession. I latched on to that story and convinced myself that the problem was out of my hands. I was ignoring the possibility that we simply weren’t doing a good job with sales, mostly because my method had worked well in the past. I hadn’t changed anything about how we made sales, and it just seemed as though that couldn’t be the problem.

But now, when I look back at what was happening, it’s clear to me that there were danger signs I ignored. In particular, I downplayed a couple of big jobs that slipped through our fingers. One, for a large company in California, had seemed to be a lock. Our contact at that company had even told us that we had the job and promised a deposit the following week. But it never came. Instead, I got a call from an office furniture dealer who was providing furniture for the rest of the project, a major office expansion.

He had seen our proposal and said he was very impressed. He called to see if there was some way we might work together on future projects. Or so he said. I spoke to him about how we might collaborate and left with the impression that we would work together soon. But I never heard back from him, and the job we had been counting on didn’t come through either. Eventually, we heard from the client that it “had decided to go in another direction.” The dealer had simply bought the job out from under us. Having seen our product and our pricing, he had come up with a competing offer and price that the client accepted.

In another instance, we put a great deal of time into working with a military client, doing extensive design work, revision after revision, that the client took and used as the basis for its bid package. It went on to award the job to another company, one it had worked with previously. Both of those jobs were large enough that, had we received either of them, we would have exceeded our targets for April and May. And in that case, I might not even have noticed we had a problem. But we are vulnerable when we lose the big ones, because a bunch of smaller orders may not take us to our target. And in this case being played for chumps made a real difference.

As I wrote in my posts last fall about my AdWords debacle, I took my sales problem to my Vistage group in May 2012 and got some good advice — namely, that the problem was not the economy and that I needed to look within my own organization. At this point in my AdWords posts, I spoke about what I did with my campaign to restore a particular type of incoming call.

But I left out the other big change I made in response to a recommendation from one of the members of my Vistage group, Sam Saxton. Mr. Saxton owns a custom stair-making company, Salter Spiral Stair, that is in many ways similar to mine. It manufactures custom items and sells them over the Internet. He told me that he had hired a sales consultant who had helped him double his sales volume in the previous two years, and he suggested that I follow his path.

Wednesday: Meet the Sales Consultant.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

Article source: http://boss.blogs.nytimes.com/2013/06/18/how-our-sales-process-broke-down/?partner=rss&emc=rss

Climate Talks Yield Commitment to Ambitious, but Unclear, Actions

Delegates from more than 190 nations agreed to extend the increasingly ineffective Kyoto Protocol a few years and to commit to more ambitious — but unspecified — actions to reduce emissions of climate-altering gases.

Wealthy nations put off for a year resolution of the dispute over providing billions of dollars in aid to countries most heavily affected by climate change. Industrial nations have pledged to secure $100 billion a year by 2020 in public and private financing to help poor countries cope with climate change, but have been vague about what they plan to do before then.

Only a handful of countries, not including the United States, have made concrete financial pledges for adaptation aid over the next few years. Todd D. Stern, the senior American negotiator, said that the United States would continue to provide substantial climate-related aid to vulnerable countries. But he said he was not in a position, given the budget talks in Washington and the Congressional process, to promise new American financing.

The participants noted with “grave concern” the widening gap between what countries have promised to do to reduce emissions and the growing concentration of greenhouse gases in the atmosphere. They declared it unlikely that on the current path the world would be able to keep global temperatures from rising more than two degrees Celsius (3.6 degrees Fahrenheit) from pre-industrial times, a central goal of the United Nations process.

But the group left for future years any plan for addressing the mismatch between goals and reality, merely stating an intention to “identify and explore in 2013 options for a range of actions to close the pre-2020 ambition gap.”

The accomplishments of this year’s meeting of the United Nations Framework Convention on Climate Change were modest, but so were its aims.

The meeting, formally known as the 18th Conference of the Parties, or COP 18, was always seen as a transition from the longstanding division of nations into industrialized perpetrators and developing-world victims of dangerous climate change. That division was enshrined in the Kyoto Protocol, which the United States never joined and which assigned pollution reduction targets to advanced nations but none to developing countries, including the world’s current largest greenhouse gas emitter, China.

The parties agreed last year in Durban, South Africa, to work toward a new protocol or other legally binding instrument that would require actions of all parties, not just rich nations as under the Kyoto agreement of 1997. The new agreement is to be concluded by 2015 and enter into force in 2020.

The Doha meeting did not produce even the barest outline of what that new agreement would look like, leaving those questions for future meetings.

The convention addressed the concept of loss and damage, recognizing the increasing frequency of extreme weather events as well as slower-acting threats like drought and sea level rise. The body adopted language urging more financial and technical support for the most vulnerable countries. But it did not create a mechanism to handle such aid, angering some delegates.

Kieren Keke, foreign minister of the Pacific nation of Nauru and chairman of the Alliance of Small Island States, called the package adopted Saturday “deeply deficient.”

“This is not where we wanted to be at the end of the meeting, I assure you,” he told the delegates. “It certainly isn’t where we need to be in order to prevent islands from going under and other unimaginable impacts. It has become abundantly clear that unless the work is supported by world leaders, particularly those representing the countries most responsible for the crisis, we will continue to fall short year after year.”

It has long been evident that the United Nations talks were at best a partial solution to the planetary climate change problem, and at worst an expensive sideshow. The most effective actions to date have been taken at the national, state and local levels, with a number of countries adopting aggressive emissions reductions programs and using cap-and-trade programs or other means to help finance them.

While the United States has not adopted a comprehensive approach to climate change, the Obama administration has put in place a significant auto emissions reduction program and a plan to regulate carbon dioxide from new power plants. California has adopted a cap-and-trade system for 2013.

Other countries, including South Korea, Australia and most of Europe, started earlier and have gone much further. It is those kinds of efforts that hold the most promise, at least in the short term, for controlling a problem that scientists say is growing worse faster than any of them predicted even a few years ago.

“What this meeting reinforced is that while this is an important forum, it is not the only one in which progress can and must be made,” said Jennifer Haverkamp, director of the international climate programs at the Environmental Defense Fund. “The disconnect between the level of ambition the parties are showing here and what needs to happen to avoid dangerous climate change is profound.”


Article source: http://www.nytimes.com/2012/12/09/science/earth/talks-on-climate-produce-promises-and-complaints.html?partner=rss&emc=rss