THE DANGER OF LOW HANGING FRUIT

MORE COMPANIES WILL GROW THEMSELVES OUT OF BUSINESS THAN WILL STAGNATE OUT OF BUSINESS

It’s referred to as low hanging fruit. Most start-ups see it on day one, or even before day one. There are all those anxious customers out there just waiting for what you have to offer. All you need to do is to run through the orchard (market) reach out and grab the low-hanging fruit and your baskets will be full.

It’s one of the most sinister traps for new companies. And it can be a trap for even the most seasoned companies when:

-New products or services are introduced that are clearly cut-ting-edge
-Competitors falter
-Markets or economies boom

When there is low-hanging fruit, the prudent, seasoned leadership teams know they need to capitalize on it. “Make hay while the sun shines”, they say. This is prudent – capturing market share is almost always a good thing and high sales volume usually leads to good earn-ings.

There are some dangers, however, and the CSO needs to be aware of them and develop the strategies for addressing them. Remember, the CSO position is the strategic/visionary level for sales, the vice president and sales manager are the tactical levels of sales and the sales professionals are the task level.

Who is setting the sales strategy for your organization? Do you have a true CSO in place?

Using the “low hanging fruit” analogy, let’s look at how this common sales phenomena plays out. Since the author is from Georgia, we will be using peaches as our fruit. Peaches are grown in orchards which are rows of trees. The orchard represents our target market.

The primary risks to consider when addressing low hanging fruit are:

-Some good fruit will be missed
-Some good fruit will be dropped
-Vertical growth is ignored
-Competitors will be following behind
-Salespeople and sales leaders develop bad habits

This White Paper gives the CSO some guidelines to consider when formulating the strategies for a sales organization experiencing low hanging fruit. Strategies are for tomorrow, not today. Strategies deter-mine what your team will be doing next. The prudent CSO understands that at some point the easy sales will be gone and real, professional salesmanship and sales leadership will be necessary.

 

 

 

SOME GOOD FRUIT WILL BE MISSED

“We’re growing at 300% per year,” he boasted, “and we’ve been doing that for three years!” He leaned back in his chair, wing tip shoes on his desk, and took a deep puff on his cigar. Nine months later he had a low five-figure buy-out check in his pocket and he went looking for a job.

There it is! A ripe orchard of seemingly unlimited opportunity. Tree af-ter tree of ripe fruit ready to drop off the limbs and we have baskets. All we have to do is run through the trees, grab what we can, fill the bas-kets and go back for more.

If we miss a peach or two on a tree, so what? There are many more on other trees.

Translating this to the world of sales, here are the fatal flaws of missing fruit.

The fruit left behind will either be picked by the competition or it will rot, ceasing to be an opportunity.

Not all trees are the same. In a peach orchard there may be different types of peaches. Some are succulent and perfect for eating immediately, but have a short shelf life. Others are better for shipping long distances and still others are best for canning. By grabbing whatever fruit is available, we find our baskets are mixed with different types. The CSO must be prepared for this and have a plan for sorting these out and finding the best way to capitalize on them. But what if your organization makes more profit on one over the others? Will you be skipping over high margin or high-potential fruit to grab others?

SOME GOOD FRUIT WILL BE DROPPED

In our haste to grab as much “good stuff” as we can, occasionally a piece of fruit will be dropped. It’s no big deal, we think, because there are plenty more where that one came from. Besides, in the time it takes us to go back and pick it up, we could pull in two or three other low hanging peaches.

In sales, this is when we let the difficult or troublesome account go away because they require too many resources from us. Frankly, they’re not worth the bother.

Again, we’re leaving it behind for the competition or we are allowing the opportunity to spoil. A spoiled, lost opportunity is never good for an industry and it is not good for a company.

New businesses have sprouted up and been very successful by catering to the fruit that was dropped. For instance, when some manufacturers began ignoring small hardware stores and letting them drop off because of their low volume, the store owners got together and formed a co-op. Today they compete strongly against the big-box stores under the Ace Hardware name.

VERTICAL GROWTH IS IGNORED

This is the greatest danger. While running down the low hanging fruit, salespeople ignore the less accessible sales and this usually comes back to haunt them. In the orchard, the other fruit is usually higher in the tree; in business, the other fruit is usually higher in the organization. It takes more time and more effort, but picking all of the fruit from a single source not only helps fill the basket now, it prevents the loss of future sales.

left the more difficult sales for “later”. In the real world, later rarely comes and even when it does, the salesperson finds that the competition has beat them to it. Remember, the competition follows behind the low hanging fruit picker.

In sales, the equivalence of going higher in the tree is vertical growth. Vertical growth is almost always more profitable than horizontal growth. Once we are in an account, it is easier to penetrate the ac-count by leveraging our existing relationships and our knowledge of the customer’s business. The reduced time and other resources needed to penetrate and, ultimately, saturate the account makes subsequent sales even more profitable. The true cost of sales declines as we grow existing accounts.

Once we stop and close a sale with a client, it is in everyone’s best interest that we gather all of their potential business.

When we hear people talk about leaving money on the table, this is usually what we’re talking about. They grabbed the quick and easy and

Once we stop and close a sale with a client, it is in everyone’s best interest that we gather all of their potential business.

-Our cost of sales and time-to-close on subsequent sales is lower
-Profitability of subsequent sales is higher
-There is a greater likelihood that we will become Sole Provider thus locking out the competition
-The customer enjoys the benefits derived from single sourcing

COMPETITORS WILL BE FOLLOWING BEHIND

Like you, your competitors need fruit. While being first to market may mean that you reap an initial lion’s share of the business, your competitors will not sit back and let you have as much business as you want. They will compete just as you would if the situation were re-versed.

Initially, they will go after the remaining opportunities – the ones you left behind or dropped. These will be slower and more difficult sales. It will require them to use more professional selling skills like positioning, solution selling, consultative selling, etc. They will begin with a thorough needs analysis and they may build more relationships and better relationships inside some of your existing accounts.

As a result, your competitors will focus on moving from Alternative Provider to Preferred Provider, the position you initially attained with your customers. In other words, the game is yours to lose.

 

Grabbing the low hanging fruit and then running to the next opportunity can leave you vulnerable to the activities of the competition who follow behind you.

Remember, at one point IBM had a 95% market share. After it dropped to 5% they made some changes in their sales system which had been the best in the world.

The Swiss had 95% of the world’s watch market until they decided to leave behind the battery-powered timepieces. They were toys, fakes and only a fad, they thought. Their market share also dropped to 5%.

SALESPEOPLE AND SALES LEADERS DEVELOP BAD HABITS

This is the most expensive result of building a business on low hanging fruit.

Because sales seem to come easier, salespeople develop the habit of reaping. They are less likely to be planting new seeds for the future. They do not see the need for honing their skills since they are making their quotas fairly easily without using many of them.

What happens when the low hanging fruit runs out? The sales team is ill-equipped and unprepared to revert to professional value-added sell-ing.

What the CEO or sales leader usually tells someone like me is, “We have created a bunch of farmers, now we need hunters.” In fact, they have not created farmers, they have created pickers. Yes, they need hunters now. However, some farmers can be taught to hunt; few pick-ers can.

Salespeople and sales leaders develop bad habits during boom times. It is human nature. Once you recognize that the low hanging fruit is running low, you need to make some tough decisions.

-Which players (pickers) on our team can be taught to hunt?
-Can we make the tough decisions if they involve changing out some of our “best” people?
-How do we need to restructure the sales force?
-What will our new sales approach be?
-How do we change both the compensation plan and the in-centive plan to drive the results we want?

THE SOLUTION
Make hay while the sun shines includes planning for the new business model – the one that will supersede the current one.
During the boom, the corporate culture can be one of invulnerability, excitement, fun, benefits and consecutive wins. However, when the growth rate tapers – and it will – there needs to be a plan in place to address all aspects of the business, including the personal impact on the employees. This plan needs to be so well developed that it can lit-erally be pulled out of a drawer and implemented right away. Any delay caused by the need to stop and develop a plan will only take the or-ganization further down the slippery slope.

-How will you immediately modify your sales process meth-odology (SPM) to address the changed sales environment?
-What financial changes can you make immediately to pre-serve cash?
-Cuts in perks (the fancy cars go first)
-Reduced personnel (toughest for most
-Sell smarter – use technology more effectively
-Sell smarter – grow existing accounts
-Sell smarter – use sales analytics to address the most viable and most profitable opportunities

 

© 2009 Chuck Reaves, CSP, CPAE, CSO

Chuck@ChuckReaves.com www.ChuckReaves.com

770.965.5595 1.800.677.3283 (800 MR. REAVES)

 

 

 

 

 

 

 

 

Chuck Reaves

Former top salesperson for AT&T Highest producer out of 1,100 Account Executives High producing sales manager Author of eight books Spoken in all 50 States; 7 Countries 3500 speaking engagements Pioneering advanced sales concepts Kaizen for Sales Supply Chain Selling Sales Analytics Real Sales Automation (RSA) Chief Sales Officer Curriculum Awards Speaker Hall of Fame (CPAE) Certified Speaking Professional (CSP) Impact Speaker of the Year Outstanding Georgia Citizen Veteran's Advocate of the Year Invited to the White House twice Bronze Star Recipient (Army/Vietnam)

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