The Sales Paradigm – Changing the What, How, and Who
Provided by Doug Tate, Interim/Part-time CFO
We are seeing an unprecedented number of business pivots in today’s business environment. When a business is pivoting, many things change but can be categorized into three primary segments:
- What the company sells
- How they are selling
- Who they are selling to
When reviewing how to pivot and which of the above should change, many experts comment that this should not be exclusively done during some type of a crisis whether it was 2001, 2008, or 2020. It should be an on-going activity of the CEO to continually be watching market shifts and changes and adjusting or pivoting as needed.
I agree with this and would counsel that the “need” to examine a company’s sales paradigm should not be either an isolated exercise or limited to a unique crisis response.
Regardless of the severity of the current environment’s impact on the broader economy or a narrow sector of customers, business leaders must realize the pace of change in their markets and customers will continue to occur at an ever-increasing pace. The cycle of strategic change will continue to spin with opportunities and risks being separated from the norm. These opportunities and risks will only be seen if a company’s internal strategic processes are positioned (i.e. free to explore) to consider them. Ultimately, a company and its leaders’ success will be determined by their willingness to challenge their own perspectives.
I have experienced this battlefield in several companies over my corporate career, but I can point to a recent example in a small start-up client. While the client’s impetus for changing the sales paradigm may not have been directly instigated by the current market conditions, the urgency of market changes certainly catalyzed the reaction.
The company’s primary sales channel has traditionally been the independent contractors and homeowners to whom they sell. As such, the client was defined as merely a sales broker for the larger entities in its sector. Unfortunately, the company suffered a cathartic failure of a critical business partnership which forced the CEO into base level survival. This situation opened up an opportune strategic space for the company to refine its business model. However, that space was much larger than the CEO could visualize.
At the outset of the pandemic situation, the company’s primary sales process, face-to-face appointments, was closed off due to many states’ lockdown orders. As a result of asking a few simple questions, the company created a unique virtual sales appointment process and the associated training. These virtual sales meetings became very popular. Previously, the company had been selling in-home sales appointments with homeowners exclusively to its own independent contractors and dealers. The combined need to survive coupled with the new “rules” precipitated by the current environment, made the CEO receptive to the opportunity of selling to 3rd Party customers.
I reworked the company’s strategic business plan to include a larger mix of 3rd party customers. This “unleashing” of strategic opportunity has redefined the company’s profile to potential investors and provided a critical competitive advantage in a largely “Stepford wife” industry positioned for growth. While the potential strategic investment advantages are immense and fortuitous, the tactical cash flow benefits are real and bankable! The company has transitioned from a “nail biting” crisis to a calmer “breathing room” urgency about cash flow. The consideration and implementation of new sales processes and expanded sales channels has given new life to the company’s potential for a successful Series A equity raise.
Though market conditions can drive change, no one person or one thing can force a leader to change. The fact that the leaders were open to the consideration of potential strategic sales channel changes is what created the opportunity. As Thomas Edison once said, “Genius is one percent inspiration and ninety-nine perspiration.” Yes, continued execution will be key to the ultimate success of the company’s new sales paradigm, but at least the sweat has begun to glisten!