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What happens to a company with no sales people? How do they continue to grow?

On a recent trip visiting Midwest store fixture manufacturers, I found several that were doing well, growing fast and yet had no salespeople.

We all want a business that is growing at a reasonable pace; one with good customers that come to us, rather than making us search for them.

When I asked how the new sales were coming in to the companies, the responses were very similar:

— “Word-of-mouth has built our business;”
— “We do such a good job for our customers they keep giving us more to do”; or
— “We started small and then proved ourselves; now they want us to do everything.”

But there is a dark side to this growth — and it was obvious to each of the manufacturers: One or two large customers accounted for a very large percentage of their business. They were aware of it and consistently asked: “How do we get out of this dilemma? We are very concerned.”

DIVERSIFY: IT'S IN YOUR BEST INTEREST

The same dark shadow hit my company. I was working as a salesman for a manufacturers rep firm that had been very successful in the wood coatings industry. We started small, but built the business in the Midwest to over $11 million in sales; with coatings accounting for over 80 percent of our sales. We hired technical coatings specialists, wrote much of the literature and technical data sheets, and gave dozens of training seminars. Just like the store fixture manufacturers I visited, we did such a good job for our customers, they kept giving us more to do.

And then it stopped.

The manufacturer we represented was bought in a corporate merger. Within six months, they had hired their own salespeople and technicians… and we were out 80 percent of our business. The company I worked for split up. One group tried to blend and mix their own coatings brand, but after several months, it all ended and went bankrupt. My team bought the rep side of the business and, after a few very lean years, succeeded.

Our mistake was not investing in an insurance policy. We were so focused on our current business, we didn’t look at or accept new ideas. We wrongly assumed that our large vendor could not live without us.
The store fixture manufacturers I visited with saw the same problem we encountered, and our discussions centered on what to do. The owners of the companies were acting as president, national sales manager and salesperson. The project managers were centered on the logistics of the jobs, were in daily contact with the customers, and handled the role of customer service. Those major customers needed the attention of everyone, all the time.

A few had tried to hire a salesperson, without success. Common reasons were:
• “He didn’t understand our culture”;
• “She brought in a few people, but they were not the right fit for us”; or
• “We just didn’t have time to devote to the new projects they found.”

One of the companies I met had found a solution. About two years ago they saw the “Large Customer” dilemma as a threat, not a blessing. They invested in an insurance policy by hiring a sales manager to focus on new activities. They devoted a portion of their profits to trying new projects and researching new areas.

KEEP AN EYE ON THE FUNNEL

About 18 months into its investment, the “Large Customer” was caught in a market slump and took a sizable part of its business in-house. While initially the new business created problems — and was a challenge to accept — the company was ready with a full funnel once the “Large Customer” bubble burst.

In sales, we are always looking at what’s in our funnel. The funnel represents all the possible projects, quotes and prospects that have a good likelihood of turning into business.