A Frustrated Business Owner

Our client had been in business of supply of office equipment and furniture for eight years by the time we first interacted. The owner of the business met with my wife in a church service and on learning what I do she asked that I call her to set up an appointment. On the following Monday afternoon we met.

The business ran a showroom near a major shopping mall in Nairobi. The showroom displayed most of the products the business dealt. A few walk customers bought also bought directly from the showroom.

The bulk of the firm’s sales was generated by the owner and sales people who went out to pitch the firm’s products and response to tender invitations that were advertised in the newspapers.

The firm’s clientele was predominantly public sector institutions and international NGOs.

The Sales Problems

Once we (Growth Partners Consultants) got in we immersed ourselves in the businesses accounting data, we spoke to employees and the owner.

We asked a lot of questions and listened hard. We picked out trends and followed problems beyond the obvious symptoms to root causes of the problems.

From this exercise we identified these four problems to be the most pressing at that point and once addressed the firm will be in a better place to address others

1. Overreliance on the owner to generate sales

The owner was previously employed in a similar business before she left to set up her own firm. She relied mainly on the experience and contacts she had made in the last to generate Kshs 58 Million of the Kshs 70million that the business did in the previous year. By the time we met the proportion was far much higher.

2.Stagnated Sales Growth

The firm’s sales had stagnated at Kshs 70million for the last 3 years and the current year did not seem like it would change positively due to post election violence that had hit the country in the year. However hard the owner and employees worked they ended up on the same ceiling.

3.Sales Hires who didn’t Stick

The business struggled to hire right sales people who had the personality, skills and motivation to hack selling to government and other organizations. Whenever they got someone who looked like a good match, the person left within a few months out of frustration or availability of greener pastures elsewhere.

4.Sales Team that did not Hit Targets

Those who stayed took years to start generating sales and none of the existing 4 sales people had done more than 50% of their sales targets since employment.

As a result of these sales challenges the firm was experiencing major cash flow problems. It was unable to service many customer orders. Customers were furious and rarely did they buy again from the firm after the first bad experience.

The firm had never engaged any consultant before but at that point they were open to any help that came their way especially if it was within their means to pay for it.

Solving the Sales Problems

After initial analysis of the situation and presentation of the business’s problem in a way that made financial sense to the firm they engaged our services for one year. Our mandate was to help them turn around the sales situation.

It appeared like a daunting task but we were willing to dare and the client had confidence that we could do it especially after we gave measurable outcomes from the consultancy engagement. Milestones were agreed upon and captured in the contract. We were willing to be held accountable for the outcomes.

Sales Consultancy Turnaround Outcomes:

  • Achieve 10% Sales Growth in the year;
  • Get sales team generate 80% of sales and the owner and showroom the rest;
  • Get 2 sales people producing as much as the owner;
  • Have all the sales people achieve at least 70% of their monthly sales targets.

With this confidence we picked out the areas where we could achieve the rapid results. From our analysis we understood that the firm was sending out quotations amounting to Kshs 0.5 Billion a year. The conversion rate was less than 3%. Taking this closing rate to 20% was easy. This information lay in the organization and no one had a clue it existed. From this data lay an easy route to great success.

We put in a programme and within 3 months we had the closing rate upto 15%. The top performer had a closing rate of 33%.

In the time 2 of the longtime sales people left abruptly as they could no longer hide when number focused tracking was in place. They used to run their side businesses while still in employment since they were the most trusted employees and also prided themselves as top producers.

We helped the firm hire three new sales people. Previously, the firm hired from within its industry. These new people were from outside the industry. The owner was not convinced this was right decision but, with some persuasion she reluctantly allowed it. One of the candidates was a fresh diploma graduate while the other two were from retail banking sales. They adapted easily into the results oriented culture we were creating.

As part of the recruitment we put in place a sales programme on board that would help new sales people start producing within the shortest time possible and achieve Kshs 1 Million monthly sales within 6 months. The industry average of a great new sales person achieving this production was then 24months.

We devised a manual system to record and tract every person’s daily activity. All potential prospects were captured and every quotation was tracked to conclusion. Every month every sales person had a performance evaluation-cum- coaching session with a sales consultant.

Initially the employees were scared of the moments but one year after we stopped this programme the sales people demanded for its re-introduction. They attributed this performance management programme to their great improvement.

The Sales Results: SME Sales Turnaround

After one year of engagement the client had experienced the following results:

1.Sales Growth

The firm’s annual sales grew from Kshs 70 Million to Kshs 98Million. This was 40% growth compared to the 10% we had targeted.

2.Productive Sales Force

Of the Ksh98 Million turnover the owner was responsible for only Kshs 29Million which was about 30% of the total revenues. The sales force was generating over 70% of the revenue.

The sales force had grown to 7 sales people with 5 of them having joined during our engagement.  Of the 2 who were there their sales had grown by over 300%. The new ones had achieved a combined performance of 70% of their consolidated target.

3. Enduring Sales Structure

There were clear sales management structures upon which to build future success for the business.

Although our involvement with the client remains, we are called upon to assist in specific areas such as strategy development, selection, management coaching and training since the building blocks for a sales success we put in place years ago are in place.

The business is no longer reliant on the owner to generate and grow its revenues, it has sales people who have been performing at high levels over the last four years and new hires start producing within the shortest time.

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