Over the past five years of investing in small and medium enterprises (SMEs) in Ethiopia, RENEW has observed that one consistent challenge faced by many companies is to build a sales department with the discipline and skills needed to rival Western companies.
Sales and marketing are key areas where we work to add value when managing our portfolio companies. Over the years we have gained a lot of first-hand experience on what has and hasn't worked. One thing we are certain of is that most of the SMEs in Ethiopia don’t give the necessary attention and importance on developing sales teams and system they need to win and keep customers.
Sales is the most important activity in each and every business, it comprises the process of acquiring customer up to closing deals! Without customers, there is no business. The ability to attract and retain customers is a key differentiator that helps turn SMEs into market leaders.
Last week, RENEW hosted an event for selected Ethiopian business executives titled
Strategies Successful Companies Use to Win and Keep Customers.
We highlight below some key takeaways of that workshop. Many of the world’s fastest growing companies make use of these strategies:
Spend time on lead generation and the systems to track them
Apply methods to qualify your leads
Increase your customer touch points
Under promise, over deliver
Selling more to existing customers is more profitable than acquiring new customers
It takes 12 rights to make up for 1 wrong with a customer, so do it right!
Learn what your customers want; be obsessed with your customer
One of the key discussions a team should be having related to sales is how much time a company should spend attracting and converting strangers into potential leads. At RENEW, we would say typically a lot! This is an area where the marketing team overlaps with the sales team. Not less important is the process of qualifying the leads. There are many methodologies out there that companies have been using for decades. For example the well-known BANT method, that IBM started using 30 years ago. It is still a very effective way to understand if your lead has budget/money to pay, and the authority to make decisions, and whether the organization or customer has a need for your product/service.
After you qualify a lead, it times to plan the steps to close the sale. One of the most effective ways to do this is to increase the touch points you have with your potential customers. According to some research it takes 7 to 11 touch points on average to close a deal. Planning your touch points is a proven technique that increase conversion rates substantially, and makes a company stand out from the competition.
One of the mantras every sales team should remember is under promise and over deliver, the so-called FedEx Rule. It is a key strategy to improve customer fulfilment. Get this right as studies show it takes on average 12 positive actions to make up for 1 wrong. It is very costly to make up for a mistake during the customer journey.
Sales and marketing teams should be obsessing about the customer, including ensuring systems are in place to retain them. Repeat customers are the most profitable, costing a company six to seven times less than acquiring a new one and spending 67% more than new customers
Sales and Marketing are essential activities in all businesses both in business-to-consumer (B2C) and business-to-business (B2B) models. The difference is often that in B2C sales serves marketing and in B2B marketing serves sales. In any case, the gist is that marketing and sales are very different functions and each should be given the importance it deserves. In many businesses in developing countries, such as Ethiopia, the sales process is often more reactive to market demands than proactive. Companies that are applying strategic approaches to their sales efforts will out perform the competition, especially in markets that are growing in double digits for the past decade.
Contact us to find out about the next sales seminar.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.