N2Growth on Leadership: Set Sales Priorities

Ten bad ways to choose sales opportunities—and a tool for doing it right.

One of the most critical choices that an executive or entrepreneur can make is to determine which sales/revenue opportunities to pursue vs. which ones to pass on. How do you determine where you will allocate your time, your resources and your talent? Do you use a rational decision-making process to arrive at the right conclusion or are you the person that is often second guessed or proved wrong because your decision was made irrationally and you arrived at your conclusion by default, osmosis or some other unknown process?

It has been my observation that many sales plans simply evolve for no quantifiable, qualifiable or tangible reason other than “just because…”

Here are the top 10 reasons not to pursue a particular sales opportunity:

#10: Because a strong sales or product manager flexed his/her muscles and pushed their bias. #9: To seek static gains in a vacuum by just looking for increases in quarter over quarter sequential revenue growth. #8: To buy business in order to gain market share. #7: Because more marketing budget exists for Product A vs. Product B. #6: Because the sales force can’t seem to get traction with Product X. #5: Because the sales force is getting traction with Product X. #4: Because the ad agency made a good pitch. #3: Because the market research says we have a competitive advantage. #2: Because the competition does it. And the No. 1 reason? #1: Because it’s always been done that way.

Some of those reasons, if they’re encapsulated in an overarching strategy, may not be altogether bad reasons to pursue a sales opportunity. On their own, however, they will result in wrong choices more often than not. To avoid the common mistakes outlined above, conduct a thorough comparative analysis of all product and service lines assessing the following key metrics:

Cost of sales and profit margins

Length of selling cycle

Sales/revenue obstacles

Competitive analysis

Current market demand

Potential for future market growth

Ability to further brand recognition/growth

Quality and quantity of available talent and resources supporting a particular product or service line

Execution and delivery capabilities

Post sale costs of service

Ability to add to lifecycle value

Recurring revenue vs. one time revenue

Creation of additional revenue opportunities

Take the above metrics and plug them into a grid ranking each category from highest to lowest for each product or service line. In addition to individual rankings also create a weighted rank based on the metrics that are most important to your business. Lastly create a blended score for each product or service line. Conducting this type of analysis will help you determine where you should be placing your emphasis for the purpose of moving you toward a best practices approach when creating a well-engineered sales plan.

N2growth, a Portland, Ore.-based strategy and consulting firm, helps small businesses grow their talent, revenue and brand equity. Click here for more information.