Generally Accepted Selling Principles: Is Your Company GASP-Compliant?
It is an absolute given that your organization needs to be GAAP-compliant. No company ignores Generally Accepted Accounting Principles, at least not for long, and not without penalty. The same is true of Sales. So, is your company GASP-compliant? If not, you’re losing potential revenue.
Review the Top 10 GASPs below, to see if you are in basic compliance.
Principle 1 – Sales Lexicon
Is your organization a Sales “Tower of Babel”? For example, how many times have you heard your Salesforce refer to a Suspect as a Prospect or worse yet, a Prospect as a Customer?
Many companies fail to maximize Sales simply because there is no commonly understood sales vocabulary or common sales definitions. What constitutes a Lead? A Prospect? A Suspect? A call to action? Unless everyone is working from the same definition and understanding, they are literally speaking different languages. In that “fog of communication”, things get lost and fruitless debates abound.
Though the bigger danger lies in wildly unreliable sales forecasts, which nonetheless must form the basis of Senior Management decision-making. Forecasting is a somewhat inexact science at best, but it becomes positively whimsical when several sales definitions are at play. For any sales forecast to be valid in the eyes of Senior Management or Shareholders, there must be an absolute adherence to the terms used when referencing probability to close.
Everyone involved in the sales effort (and this includes Sales, Marketing, Customer Service, and Product Development, at a minimum) have to be speaking the same language if you want to maximize revenue.
Principle 2 – Posted Targets
If your Salesforce aims at nothing, they can hit it 100% of the time. But you will not maximize revenue.
No sales effort is optimally productive unless everyone knows what the sales targets are, and who owns the responsibility for delivering them. And at all times, everyone must know where the company is at, relative to the targets. This means everyone involved in the sales effort, especially of course those who have direct responsibility for closing deals.
As a hint we suggest breaking down targets into smaller pieces (quarterly or monthly) than the all-in annual target. This supports more effort on the part of the Salesforce to actually get the revenue in earlier in the year.
Principle 3 – Inspection
Expect what you inspect, it’s that simple. What gets measured, gets done. End sales are vital to measure, to be sure. But so are the activities that produce them. Management needs measurements and reporting that tells them how many leads are being generated, how they are progressing in the sales pipeline, how they are being closed, and delivered. This measurement system needs to be both comprehensive and simple. Striking that balance is a major key to sustained sales success.
Principle 4 – Coaching
Sales is a team sport. Some players may be more skilled than others, and some may garner more attention. But even the best players need coaching to consistently deliver their best game, and to work productively with other team members. And this need exists across management layers. The Coaches need coaching as well.
Principle 5 – Lead Generation
Leads are the lifeblood of any sales machine. They fuel it. This is largely the province of Marketing, and while there are many methods that can work depending on the market a company is in, a steady supply of leads must be provided to produce a steady stream of revenue.
What is most important here is to not let your company fall into the trap of what we call “the baton drop”. It goes like this. Marketing generates Leads which the Salesforce fails to follow up on (or worse still, discards). To save face, Sales, complains that the Leads are either of low quality, or not numerous enough. A spirited game of “blame tennis” ensues. Revenue remains sub-standard.
Leads must be generated from a pool of suspects agreed upon at Senior Management levels, and those leads must be consistently “worked”. Each Salesperson must be measured in terms of their end closure rate. Marketing must also be measured in terms of the quantity and quality of leads created.
Principle 6 – Compensation
Paychecks must match results. In fact, it is hard to say what else you should pay for. Compensation has to be linked to clearly defined and posted targets (see Principle 2), and those who meet or exceed their targets have to benefit accordingly. With cold, hard cash.
In our experience, commission is best paid out monthly. When salespeople know that the clock is reset every month, and have probably spent at least a good portion of their last month’s earnings, they are more motivated to keep selling to maintain their income.
Principle 7 – Incentives and Recognition
Yes, you have to pay for performance. However that is defined (see Principle 2 and 3). But cash is not the only incentive that’s important. You also need to recognize success publicly. Never underestimate the power of celebrating and recognizing achievement. Likely the most sought after incentive in a highly competitive Salesforce is being #1. As not everyone can be #1, the formation and recognition of a top Salespersons group often provides optimal incentive for top performance.
Principle 8 – Pricing and Packaging
Never underestimate the power of perception. How you package and price an offering, whether a product or a service, has a big impact on how it’s perceived by potential Customers or Clients. That, in turn, can have a big impact on how much you sell. So listen to what your Customers, and your Salespeople who deal with them day in and day out, are saying about how you and your offering are perceived. React accordingly, to maximize revenue.
Principle 9 – Integration
Everyone is in Sales, in one way or another, because everyone’s paycheck in the end comes from something having been sold. Everybody in the organization has to understand that, and act accordingly. Their efforts must be coordinated and integrated. This need is relatively obvious with respect to functions like Sales, Marketing, Customer Service, and Product Development, but all other functions have roles to play. How Accounting collects, for example, has an impact on sales effectiveness.
Principle 10 – Automation
We live in an electronic age. Technology still has it’s limitations in terms of directly selling, but it must be used to support the sales effort. Some form of Customer Relationship Management (CRM) is an absolute requirement, to win and retain Customers. And of course, maximize sales.
Achieving full GASP-compliance is often more complicated than simply fulfilling the above Principles, but it is always a good start. Where exactly the greatest revenue leverage for your organization might lie, is best determined by a broader Revenue Optimization Audit.
– Software Delivered as Promised. No Surprises.