How Sales Weasels Get You – and Your Business

A Sales Management Nightmare

Picture this. It’s late in the day, the last day of your fiscal year. You are waiting to hear from your number-one sales team. They are on-site with a customer, trying to close the one deal that will assure your company of a profitable year. A deal that will trigger some generous accelerators in your compensation package.

As the clock moves relentlessly on toward 5:00 p.m., you stare at the phone waiting for word on the progress of the negotiations. Finally, the phone rings and your sales team reports that victory is theirs! The order has been submitted! You can hear loud laughing in the background and the unmistakable clinking sound of beer steins being filled at a bar. Clearly the celebration has begun.

Breathing a sigh of relief, you call other members of the executive team and tell them the good news. You then call your spouse and offer to spring for dinner out.

Life is good; you are good.

It just doesn’t get any better than this. In your mind, you’re spending the end-of-year bonus several times over. Visions of Rolex watches, trips to Maui and small, red, Italian automobiles float through your mind as you drive home.

It’s all sweet, very sweet.

Three weeks later, the end-of-year audit is well underway. Everything appears to be going fine. Your bonus will be coming through in just a few weeks. There is nothing to be worried about.

Your phone rings It’s one of the finance guys asking if you could stop by and discuss a recent order. It seems the auditors have a question or two about that big order that put you over the top a couple of weeks ago.

You wander on down to the Finance Group conference room and find your CFO, your Corporate Counsel and the Executive Vice President sitting quietly around the big conference table. Fingers are drumming impatiently and all eyes turn to you as you enter the room.

Also seated at the table is a little weasel of a man with an HP 12C financial calculator peeking over the top of his shirt pocket. He stares at you intently through his thick glasses. There is a faint expression of smug delight coloring his face.

Then the questions start.

Did you know this customer has over 100K in 90-day outstanding invoices with us … before we add on the additional 500K for your new sale?

Were your guys aware that the product set ordered is not compatible with the product set already installed?

The discount code applied to this order is reserved for federal-government customers buying off GSA. This customer is not GSA qualified. Didn’t your guys know that … what were they thinking?

Now, it’s very quiet in the conference room. It’s also very warm. The CFO looks up, shakes his head and tells you that the revenue will have to be backed off last year’s statements. The order is simply not valid.

You head back to your office in a sort of stunned state of disbelief. You think to yourself, how could this happen?

Your stomach starts churning as you realize that the deposit you put down on the little red roadster is not refundable, the tickets to Maui are subject to substantial cancellation penalties and that Rolex suddenly seems very heavy on your wrist.

It ain’t so sweet anymore.

The Sales Weasels Strike!

The CFO Nightmare

What a year! Your company is leaving the bad old days far behind and quickly establishing itself as a Must Watch on the street. The analyst community is absolutely fawning over you as every revenue target you have promised over the past two years has been hit pretty much dead center, bull’s eye accurate.

The timing is right, the market is right, the business climate is full of opportunity and the next step in your skyrocketing career is your handling the IPO for your soon to be wall street darling employer.

You have an interview with INC. Magazine slated for the next week and you’ve even had a couple of discussions with the folks at Fortune. You have an empty place on the wall in your home office that is reserved for the Fortune magazine cover featuring your picture. That dream seems to be getting closer to becoming a reality.

This past year everything has come together. A number of strategic moves you’ve guided the company through, along with an enviable sales effort, have made it all possible. All that remains is a successful audit and then the planning for your IPO can be finalized.

The little weasel from the audit firm has been going over all of the business closed in the final days of the previous fiscal year. You’ve noticed that he seems to be particularly energetic during the past two days. Out of curiosity, you decide to check in with him before leaving for a long weekend.

You drop by his desk and casually ask him how it’s going. He looks up and shakes his head. His words bring on a little shiver, “I’m fine, it’s going quite well. But, I can’t say the same for you. Frankly, you’ve got some problems.”

“What do mean?” you ask.

He chuckles and asks, “Do you guys just book anything that comes out of the fax machine? Do you check anything? Is there any effort to validate what your salespeople are bringing in as business?”

Then the examples are dropped onto the desk one by one.

This customer is bankrupt and has a Paydex rating in the single digits.

THUMP! A folder hits the desktop.

This customer hasn’t paid your invoices for the past 10 months.

THUMP! Another folder drops.

This deal features a right to return for full refund anytime, for any reason, over the first 24 months following delivery.

THUMP … SPLISH! This folder lands on the pile then slides off, its contents spilling onto the floor.

None of this business is bookable. It’s all bogus.

Can this Happen to You?

How do these disasters happen? Aren’t there systems in place to prevent this kind of thing?

You might be thinking, it can’t happen here, we have the best ERP going; we have sales automation tools and CRM systems.  All of those systems your company invested in your ERP software, the Customer Relationship Management software, your sales automation systems – all of them may perform flawlessly. But, they also all operate independently of one another.

Usually this doesn’t result in the dramatic events described above. But, the effects can be just as devastating. They just aren’t as noticeable because they happen one at a time, over the course of years.

This chasm or disconnect between your back-office enterprise systems and the front-office tactical systems costs you much more than you probably know. In our little stories above, the orders were actually booked.

But what about the lost orders that don’t ever make into your Order Management System?

* How many orders are canceled or die from neglect after multiple changes?
* How many cycles are lost in your factory because the product you are building has to be rebuilt several times to meet the customer’s expectations because sales cannot effectively communicate the customer’s needs to your engineering group?
* How much money is lost due to unnecessary discounting that eventually reduces your margin to a negative number?
* How many customers simply gave up because of your inability to generate a proposal in alignment with their RFP?
* How much are you spending having your engineering people modify a product just to make it work in some non-standard manner?

These things happen because your organization is not acting like an organization; rather it is acting like a group of separate organizations each striving to meet their own goals. The structure of your systems probably mirrors this as well. In the back office, your ERP system buzzes along cranking out reports and feeding information to your manufacturing group and your finance group.

In the field, your front office if you will – other systems, CRM systems, sales automation tools and the like -  all are operating as well. They do their jobs well, but they do not interface with your back-office systems any more than your sales personnel talk with your plant managers or finance managers.

What’s missing is collaboration – collaboration between systems, between people, and between functional units within the enterprise. This collaboration gap will manifest itself in different ways within differing business models.

The engineer-to-order and contract-to-order enterprises face unique hurdles that the traditional quote-to-order business models don’t encounter. These might include things such as special invoicing requirements, bidding and estimating needs and complex project-management challenges.

All of these can create yawning chasms in the inquiry-to-ship process. These chasms are frequently the graveyard of otherwise good business for both buyer and seller.

A good selling and business acquisition solution will bridge these chasms and facilitate quick response to unique customer demands, streamlined processing of complex product orders and the efficient communication of crucial information between the front and back office.

This facilitates accelerated growth through better service to your customer in the form of reduced response times and reduced order errors.

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