Sales are the lifeblood of every company on earth. And, once you’ve been around the block a couple of times, you start to notice patterns that reproduce across practically all industries – simple sales mistakes that are either holding firms back or, in the worst cases, bringing them to their knees.
The good news is that many of the most common problems are eminently avoidable if you’re capable of spotting them early and taking effective action. Here are five particularly pernicious ones I’ve spotted time and time again over the years. Add them to your “must avoid” list starting today.
- Over-reliance on a single customer.
Ok, admittedly there are occasions where this is simply unavoidable. You will experience times where you are forced to lean on one customer in particular for the majority of your income but you should remain keenly aware of the risks involved when doing so.
One large customer paying over 50% of the bills is fine and dandy if things continue to progress smoothly but that’s a big if in a lot of cases. One billing dispute, one better offer from a rival firm, one delivery gone wrong and you could suddenly be facing a significant cash crisis.
- Tying yourself into one industry.
This is a related problem to our first one but on a wider scale. The reality of business generally, and sales in particular, is that everything is cyclical. Entire sectors of the economy will go through boom and bust stages on a regular basis. Winters roll around and summers follow spring. That’s simply the way of the world.
If all your sales eggs are in one particular basket, you’re adding a completely unnecessary level of risk to your overall pipeline. As with our first point, it’s not always possible to avoid this danger entirely but diversification and multiple revenue streams should always be on your mind.
- Getting dragged down by toxic customers.
Contrary to popular belief, the customer is not always right. They should always be treated with respect and attention but they’re not always right. Some customers, in fact, are downright dangerous for your business.
As soon as possible, you should get into the habit of running quarterly reviews on your customer base to see where you are really winning or losing profit and revenue. You’ll often come across a specific customer or type of customer who are simply not worth servicing according to the reality of your bottom line.
This could be for any number of reasons. Maybe the margins don’t add up, maybe they’re chewing up half of your sales team’s time with endless haggling over tiny amounts of money, maybe the post-sale support burden is too great.
Don’t be shy about dropping customers who are more trouble than they’re worth. It simply frees up more of your time to service and sell to higher-value prospects. Your future customers, and your finance department, will thank you.
- Making every time like the first time
One of the huge advantages of having any kind of established customer base is that you’ve already pushed through a certain amount of learning experiences with each sale. The amount of companies that fail to capitalise on that learning is enormous however.
There are naturally certain types of high-touch sales environments where success or failure will come down to hard to quantify factors. Nevertheless, every sale should still be considered an opportunity to improve some type of existing documented sales procedure.
We’ve probably all met a sales person or department who are more comfortable flying by the seat of their pants. It’s a strategy that can admittedly work in the short term – through a combination of luck and skill – but it’s a recipe for disaster over the long haul.
- Taking liberties with potential customers’ time
There is a time and a place for experimentation and testing in every business but the sharp end of the sales cycle is not that place. Don’t be one of those cliched sales teams promising the earth just to get the signature and then hoping the people in product can somehow sort out your mess.
Again, you might get away with this as an individual salesperson for a certain amount of time, possibly even over the course of a career. It’s a dreadful strategy for a company to take though as the inevitable end result is disappointed clients who are only too eager to share their poor opinion of your company with others.
The five sales mistakes we’ve outlined are simple common sense things to avoid that you’d assume every company would naturally take on board as a matter of course. Sadly, it’s a rare breed of firms that actually do that.
Follow our suggestions in avoiding these sneaky sales traps and you automatically put you and your firm near the front of the pack.