September has been a critical revenue month in animal health for decades. Companies seeking to grow by 10 percent to 15 percent annually race to achieve last year’s revenue numbers by the end of September. If they do, they draw closer to making their growth goal.
Data shows that sales reps give better terms to customers who wait until the last minute — with both sides knowing they can rely on dropped prices and a sure closing, thanks to the end-of-the-month company push writes Ken Krogue. It is a vicious cycle. And companies know it. Yet they continue the practice, perhaps unaware of how much it’s really costing them.
Source: Harvard Business Review, August 25, 2017.
These inappropriate end-of-month behaviors are costing companies millions. Fixing the problems requires support from the highest levels of the organization with the largest adjustments coming from sales. Teams must be educated on the full impact of their end-of-the-period behaviors. Action plans and compensation schemes that reward appropriate, long-term behavior must be created. Here are some specific places to start:
- Focus on weekly forecasting, not monthly quotas
- Use smarter financial incentives
- Focus on the customer’s timeline, not yours
- Increase the skills of your sales force