as featured in Minnesota Business

Dig Deep into Sales When Analyzing Merger/Acquisition

Danita Bye

Three key areas that can spell disaster for revenue growth

Prospective business buyers wouldn’t think of skipping financial due diligence. Yet the human capital responsible for top-line growth can be easy to skim over, especially if revenue growth is healthy. When merging two companies, it’s imperative to understand before the deal is done how to integrate the two sales organizations and how to leverage the sales teams to exceed growth objectives.

The following is a guideline for evaluating a sales department in a potential merger or acquisition. As you review it, keep in mind the overriding need for objective data; as in no assumptions, just facts.

Sales Strategy Profile

To learn if sales people in a company you’re considering buying can and WILL generate revenue to meet your strategic objectives, find out if they meet your sales strategy profile. The most effective way to obtain this information is through objective sales assessments of the sales force.

For example, does the pricing position of the company you’re acquiring match or complement your pricing strategy? It’s extremely difficult to transform salespeople from price-sellers into high-value sellers. If you make an acquisition and inherit a price-selling sales force they may have to be replaced in order to maintain the margins you expect.

Sales Mindset

It’s imperative that a sales staff have the mindset required for supporting your sales strategy. You might fully expect to kick-start revenue growth as soon as your deal is complete. If you have the right salespeople on staff, that may be the case.

However, you certainly don’t want to wait for a post-purchase assessment of the sales team to reveal that the sales staff’s strong “hunter” belief set for effectively finding new prospects was not accompanied by the “qualification” mindset needed for a high-value sale. Nor do you want to find they also lacked the “closing” mindset needed to seal deals.

Sales Management Processes

Sales organizations that are consistently successful despite market fluctuations are built around strong sales management processes. These processes help sales people get better month after month.

Accountability: Are goals and objectives clearly articulated, and are metrics measurable? The three main goals of a sales organization – increasing year-over-year sales, market share and margin profitability – should be defined by measurable objectives for departmental and individual performance.

Motivation: Is the compensation plan aligned with growth objectives? This can be one of the most powerful tools for motivating production and achieving organizational objectives.

Recruiting: Look for a consistent sales recruiting process that is based on objective sales assessments and behavioral interviewing. In addition to meeting objectives, acceptable ramp-up time and turnover indicate a successful recruiting system.

Coaching: Do coaching processes demonstrate effectiveness in helping sales people leverage their strengths and overcome weaknesses? Are pre-call planning and call debriefing meetings consistently conducted?

Dig Around Sales

There are other areas involved in the customer experience that influence sales and therefore should also be evaluated. Marketing’s most important sales support role is facilitating tactical efforts: shortening the sales cycle, generating leads, and building company and product credibility with sales messaging needs that articulates customer value.

In closing, if you skimp on due diligence and merely scratch the surface when analyzing the sales force of a prospective acquisition, you may not get what you think you’re getting. In fact, those scratches may mar your growth plans, so when examining the sales organization of a potential acquisition, dig deep and wide. MB

For more insights on Sales Strategy and Sales Process visit the Sales Growth Specialists website.

Danita Bye’s BIO:

Nationally recognized sales management and leadership expert Danita Bye built her reputation on building and inspiring process-oriented, no excuse, high-performance sales teams that deliver bottom line results. With her unique Fortune-100-turned-entrepreneur perspective, Danita helps CEOs and company presidents take their businesses to the next level. Her practical, no-nonsense approach to sales management, combined with her leadership acumen, enables sales leadership to increase sales, creating predictable revenue streams.

As a 10-year veteran of the Xerox Corporation, Danita consistently achieved award winning sales performance before leaving to become an equity partner and national sales manager for a Minneapolis-based medical device company. In this capacity, she increased annual revenues from $300,000 to a run rate of $20 million in just ten years.

Danita has authored numerous articles on sales management and leadership. In addition, she was a featured as a sales development expert on the TV show, “The Ruthless Entrepreneur,” which is currently airing on the Oxygen Network. Leadership Shift, Management Acceleration and a library of eBooks on critical sales management issues are available on the Sales Growth Specialists’ website.

Danita can be reached at Danita@SalesGrowthSpecialists.com, 612-267-3320 or 800-256-2799.