How many calls did you get from services that said they could provide the Glengarry* leads that you couldn’t find on your own? How many software ads did you view that promised your success through fun looking data rich dashboards? How many calls did you get from marketing services that provide magical customer attracting websites and promise to get you on the top of search engines?

In his book about rules, Donald Rumsfeld suggests to prune your business, customers, and employees on a regular basis.  Love the rule but, since I really enjoy the team I have, and can’t prune any more of the business than we already did during the past 16 months, I am going to focus my pruning activity on performing a sales cleansing event on our customer base.  

When your sales cleanse is performed successfully, you will:

• Identify which customers to replace
• Identify what customers to clone
• Identify where to focus your marketing efforts
• Identify pricing strategies
• Identify what activities your sales team needs to focus on first

Want to know the best part about this sales cleansing exercise? You already have the ingredients and you already have the talent to follow the directions, discuss, and analyse, so ignore the calls, ads, and pitches and continue reading. Here’s my favorite recipe for performing a sales cleanse.

Ingredients:

• 1 Sales Comparison Report (should include segmentation, at least 3 years of sales and profitability data, and your approximate closing rate for all business quoted by customer)
• 1 Sales Team
• 1 Operations Team (optional)
• 1 Estimating Team (optional)
• 1 Laptop, Screen and Projector
• 1 Well Lighted Room
• Snacks (non-healthy preferred)
• Caffeine

Directions:

• Export necessary customer data from your ERP system into MS Excel.
• Sort customer data including segmentation from greatest to least sales and profitability based on 2018 sales data. (print)
• Sort customer data including segmentation from greatest to least sales and profitability based on 2017 and 2016 data for reference. (print)
• Provide copies of the reports to the necessary team members.
• Project and be able to sort the report visually on the screen during discussions.

Analyze and discuss:

• Why were certain customers profitable and others not?
• Why did certain customers grow while others declined?
• Why did certain segments grow?
• What segments should you focus more on?
• What customers can you replicate?
• What customers need to be replaced?
• What customers did you spend more time quoting business for than entering orders?
• What activities need to happen next in each of the accounts you want to grow?
• What prospects can you target next to be able to cleanse other customers next year?
• What activities worked best to reach the great customers?
• What services are you not offering that customers are asking fo?

Serving instructions:

• Ask what the cost of not performing a sales cleanse or completing the relevant sales tasks could be.
• Develop a business case for your CFO to invest in additional services.
• Ask the team what they need from you to get started on their relevant tasks.
• Follow up regularly to drive the results you need.

Even when your sales are growing, I guarantee there are customers that are negatively impacting your business.  Completing this exercise will give you and your team time and energy to focus on better sales. It will also give you the template to perform this exercise again next year.

Think I’m nuts? This was always the first exercise as a consultant for hundreds of past projects and since taking the wheel at Allis Tool and Machine Corp., we fired 20% of our customers, replaced 20% of the others, realized a 26% increase in sales, a 50% increase in gross, have a 65% increase in our backlog over last year, and we have a bank that believes in us to foster our expansion goals. This was all accomplished without adding expenses which has been great for shareholder value.  Choo choo!

You probably have all of the ingredients but if you would like some help arranging them in the right order and getting started, feel free to contact me.  You can also hear about some of the great things we have going on at Allis Tool & Machine through an interview conducting by Katie Felten and her crew.  VIEW VIDEO

*Coffee’s for closers and nobody should want to win a set of steak knives.