Organic sales growth - possible or not?
Frank Belzer is the Sales Archaeologist and Author of Sales Shift.
I was speaking with another sales development person a few days ago and we were getting pretty deep into subjects related to the organic growth of a business. Interestingly it is an expression we hear pretty often when we are talking to a CEO regarding the ways we help. We usually hear the phrase being used to explain how a company has got to where they are – “all of growth has been organic to this point”. I think that sometimes we hear this because so many people think it sounds good, but does it?
The definition of organic growth is “growth that comes from a company's existing businesses, as opposed to growth that comes from new businesses. It may be negative”
Many times organic growth is the result of just having a great product at the right time and the market demand drives the increase. In those cases even really bad sales people can appear to do well. We have been approached by a number of companies that had been doing well at some point for one of these reasons, then when things changed – suddenly the sales issues rose to the surface.
So from a business perspective organic growth is fine, good and healthy. But from a sales perspective it could be horrible. Most companies simply cannot afford to have sales reps that are not capable of hunting or that refuse to hunt. If sales people are only selling to existing clients then that is not true growth – more like organic maintenance.
If there was an application to the organic growth definition it would be related to generation of referrals and introductions. Sometimes we get pushback from the sales ranks and one of the things we might hear is the “we focus on building relationships not finding new business” – at that point I usually ask how many referrals they generated last week, last month or last year. The answers never match the bombastic complaining. The fact is if you are a truly GREAT relationship builder then you should have almost limitless referrals!
On the other hand we also hear complaints about sales people that try to buy the business by offering extreme discounts or negotiating down on every single opportunity (whether needed or not) One of my clients had this problem - 52 sales people with a tendency towards discounting. What happens if they all discount by just 1%? Answer, in their case that amounts to a 1.2 million dollar problem.
These are the kind of issues we help resolve all the time - and this case study on a technology company might help you understand even more about what we do.
So there is definitely such a thing as organic growth when we look at a business and it is usually a good thing. However when we look at a sales organization the idea of growing organically must be treated with more skepticism.