There is no such thing as a “Magic Bullet” for increasing sales. A quick fix. A genius idea. The “one thing” that makes a business successful by generating huge sales and enormous profits.
I wrote about “There’s No Magic Bullet for Increasing Sales” and I was amazed at the response! There were two types:
So, I lied. There is a “magic bullet.”
In my article, I explain that even the best company's outstanding performance can't be explained by one single activity, department, promotion, product, etc. What I failed to mention is that there IS something that every company can do that ALWAYS leads to improvements, and long term, will lead to success:
Consistent effort to implement incremental improvements.
Consistent effort to...
...achieve and exceed key performance indicators.
...improve products and services.
...communicate to key stakeholders.
...maintain brand message and positioning.
…implement improvement plans.
…identify and correct problems.
…measure key leading performance indicators.
You get the idea. An organization that has a culture of consistent improvement in all areas will improve over time, every time.
Let's make sure that we are on the same page. I am NOT talking employees getting “in trouble” when a mistake is identified, or simply finding out whose fault it is when something goes wrong.
What I AM talking about is encouraging and even rewarding identification of potential improvements, and having a culture that accepts change when it makes sense and that spends the time, effort, and resources to do things better.
Let me give you some examples of consistency and persistence leading to improvement…
- I was on the Board of Directors for a non-profit music organization and there was always a seasonal cash flow issue. Donations came in waves 3-4 times a year after specific fundraising events. During a board meeting the Board Secretary (who hardly ever said anything because she was always so busy taking meticulous notes) spoke up and said, “Why don’t we accept monthly credit card donations?” While she wasn’t ignored, the idea wasn’t embraced by anyone. Well, this retired university professor knew when she had a good idea, so she worked with the Executive Director to be the first credit card donor to make monthly, automatic donations.
$20 came in from her every month. It was a start.
The next time the question of donations came up (which was the next board of directors meeting since we were always facing financial challenges), the Secretary again brought up the suggestion: take monthly credit card donations. There was discussion, the idea was approved, but it wasn’t embraced as a strategic way to have year-round funding. During the next campaign, a few additional monthly donors were added. We were now up to about $100 per month.
Finally, a new fundraising chairperson came on board. The board of directors saw that monthly donations were growing and had the potential to help cash flow and that the average monthly donor donated significantly more over the course of a year than the average campaign-driven donor. The board decided to embrace monthly donations and they became the focus of the new campaigns- getting monthly donations, no matter how small. The results over the course of the next couple of years were tremendous, with a larger and larger number of people donating monthly.
The Results: Higher contributions every month, higher total average contributions per contributor, and peace of mind knowing a chunk of cash (broken into lots of small pieces) would come in each month.
-I was given the responsibility to restructure the Latin America region for the business-to-business division of a world-famous Fortune 100 company. The directive: Get profitable in a year or we are simply going to shut down the region. Wow! This was a challenge!
There were a lot of big, obvious changes that had to be made. The product line focus was shifted dramatically, which resulted in a change in the sales and distribution model and massive changes in human resources. Expenses were cut overall, and new investments were made in appropriate areas. But it wasn’t enough.
We needed ideas from everywhere. The obvious changes were “top down” directives. We also needed changes that came from every member of the organization, so we held meetings and asked for ideas. Here is an idea that made a big difference on profitability:
At one of our team meetings a sales person told me about a very widely known “secret.” If we moved part of the product production process to Brazil, the government would eliminate the 55% import tax we were paying on the finished goods of certain products. With that much saved, he could be more competitive and stop losing market share.
He had suggested this to management before, but this business product line volume was small compared to the huge consumer product line volumes that were being finished in Brazil and no one had paid attention to the sales rep before.
I paid attention. Discussions were held. Forecasts were made. Numbers were calculated. The decision was obvious and product finishing was moved to Brazil.
The results? The Brazilian government gladly stopped charging us the 55% import tax. We became price competitive in the market. Even with price cuts to the market, we gained significant gross margins. By making ongoing, consistent changes throughout all parts of the operation the region went from a 25% loss on sales to a 12% gain on sales in 18 months.
-I was running a mortgage bank that focused on a specific niche: real estate investors who buy, fix, and flip single family homes. We started out small, processing a couple of loans a month. Suddenly, we received an influx of capital to lend and we shot up to doing 6 to 8 loans a month in just a few months.
We should have been thrilled but the result was chaos. Each transaction needed to be accounted for, properly documented, paperwork completed, etc. and it was taking up to 45 days to complete all the loan document processing that happens after the money goes out.
This was a huge problem because consumer lending for real estate is highly regulated and the company was at risk of an audit with significant deficiencies and losing our license. We had to fix the operations to ensure we could support the huge sales growth.
So, we went to work analyzing what happens after the money was sent to the borrower. We identified about 10 steps and assigned the steps between finance, loan officer, administrative assistant, and me.
Result: Over the next couple of months, we went from 45 days down to 2-3 days to do all the paperwork. Most importantly, we were able to maintain the sales rhythm and had a process that could grow as more loans came in each month.
Every great company with huge sales growth will be backed by dozens, if not hundreds, of smaller but critical company activities that support the growth. Here is a partial list:
You get the idea.
Everyone in an organization contributes to sales growth.
Everyone works together to make a consistent effort to implement incremental improvements. Magic.
Give me some feedback. Do you see any “magic bullets” out there?