Sustained growth in sales is often equated with profits and cash flow as a metric to determine the health of a business, and a combination of progressive demand and knowledge of the consumer base is crucial to maintaining sales growth, according to Mumbai-based management consultancy Avalon Consulting.
In some cases, according to a new report from Avalon, growth in sales might even be a priority for firms over profit, given that the former is challenging to achieve and requires constant vigilance. A number of firms have seen their promising business models made irrelevant overnight due to sudden market developments.
Unforeseen market changes – such as the current wave of digitalisation – are the biggest threat to sales growth, which has been exemplified by a number of major companies in the past. Avalon cites Kodak’s relative obscurity in the current photography economy as one prominent example, and Nokia’s position in the smartphone market as another.
So the formula to maintain growth in sales in a complex one, and Avalon conducted analysis of some of the biggest growers over the last two decades to try and devise a comprehensive strategy for sales growth. Of the firms analysed by Avalon, only 35% could maintain their high levels of sales growth between 1997 and 2017.
Combining this data with Avalon’s own experience with clients, the firm has devised four key characteristics of firms that have cracked the code for sales growth, based on which it has developed a Sales Acceleration Framework (SAF). Firstly, the business model is one that continues to generate new demand over time.
Successful firms ensure that they familiarise themselves with the nuanced needs amongst their customer base, and constantly disrupt their current operational structures to evolve with market trends and developments. To lubricate this disruption process, firms have an established mechanism to facilitate major operational change.
The first step in Avalon’s SAF framework – which is based on these principles – is to arrange discussions with a firm’s senior leadership to hone in on certain key problem areas that need to be addressed on a priority basis. Once this is done, the second step is to develop strategies to address these key issues.
These could include surveys with people involved in the problem areas. The third step is to then develop action areas, a task that Avalon has developed adept capabilities in via its own proprietary model. The last step to accelerating growth is the recommendations of quick wins or low hanging fruit that may be addressed immediately.
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