Why Marketing Blackouts and Brownouts Kill Sales Growth!

by James W. Obermayer

We walked down the long hallway to the sales manager's office when he stopped and pointed to a chart on the wall. "That," he said, "is the problem. Sales in Q1 were fine, right on track, but in Q2 we started to weaken and Q3 we hit new lows. We're dying and I have run out of reasons." With that we continued walking to his office.

The first quarter grew, the second quarter tried and faltered and Q3 dropped further and was flat.

As we passed a doorway he motioned, "That's the director of marketing's office." And just outside the door, on the wall was another chart.

Sales inquiries started their precipitous decline at the end of Q1.

I stopped in front of the chart and looked while the VP of Sales continued, then stopped and came back to me. "Oh yeah," he said, "And on top of it all, the lead volume is down." "Just a moment," I said. I went back down the hall, took the sales chart from the wall and brought it up to overlay on the sales inquiry chart. "That's the issue," I said. "Yeah, I know the leads are down," he grunted.

This is what the two charts, sales and inquiry volume looked like when overlaid on each other.

"What you are missing," I said, trying to lessen the blow of the obvious, "is that three months before your drop in sales the inquiry volume dropped. He had a sales inquiry blackout. While he was aware that the inquiry count was down, he was only vaguely conscious that the two were intimately connected to each other. A blackout, I explained, was a sudden drop in sales inquiry volume. A brownout is simply a lesser but still noticeable reduction in inquiries sent to salespeople.

I have found that the first place to look for the reason behind a dip in sales is the sales inquiry volume in the months running up to the sales failure. If there is a dip in sales inquiries, it is usually because someone has asked marketing to reduce spending. When the marketing budget is cut, for the first two or three months sales continue to grow because salespeople drain their immediate pipeline. But when the pipe has been used up and is no longer growing, sales begin to drop. Within the next three months sales volume is in a tail spin until it levels out to reflect the new realities of fewer sales inquiries and salespeople who are now almost going it alone. Demand creation drops and sales drop.

For this company, when we built the inquiry volume back up to historic levels to support sales growth, sales climbed and the company emerged from the blackout. Unfortunately, the cost in lost sales, plus a few sales territories that lost salespeople because they couldn't make a living and quit, was expensive. It took three months to rebuild the inquiry volume, and sales started to rebuild three months afterward as the pipeline got fatter. Altogether it took nearly a year to get back to where they were in sales growth. In the meantime they lost salespeople and gave several million dollars to their competitors.

The lessons are:

What so few managers suspect but fail to heed is that sales and marketing are in an elegant dance together. The lead in the dance is marketing, which creates demand. Sales only take the lead when it must, when marketing fails to build demand. Do not let inquiry volume drop.

Jim Obermayer is a Principal and Interim Executive with Cerius Interim Executive Solutions, the largest provider of Interim Executive management services.

Cerius RSS Feed