Who Pays for Poor Sales?

It’s been an interesting 48 hours for Australian business.

On Wednesday, Canva announced a restructure affecting 1,271 positions, approximately 22% of its global workforce. On Thursday, David Jones entered voluntary administration, putting around 6,000 jobs across Australia and New Zealand in uncertainty.

Two very different businesses. Two very different problems. But both raise an uncomfortable question about sales, business performance and accountability.

When a business stops growing, when revenue falls short, when the numbers no longer stack up, the response is often to cut costs. And one of the quickest ways to cut costs is human capital.

David Jones

For those who don’t know Australia, David Jones is, or perhaps I should say was, the marquee retail experience.

Its Christmas window displays were an Australian tradition. Families would make the trip into the city to marvel at the magnificent displays. Multi floor department stores occupied some of the country’s most prestigious retail locations.

It wasn’t just somewhere to buy things. It was somewhere to get the shopping experience.

David Jones has now entered voluntary administration and receivership after financial difficulties and failed negotiations with its landlord. Its 38 stores continue trading while the administrators and receivers assess the business. Around 6,000 employees now facing an uncertain Christmas. Bah Humbug

You could blame the cost of living. People are tightening their belts and spending less on premium homewares, perfumes and brand name clothing.

You could blame online shopping. Customers can compare prices in seconds, scan a barcode and find the same product somewhere else for less.

Both are legitimate commercial pressures. But I’m blaming customer experience. Basic sales skills. Someone giving a damn.

The last 50 times I’ve walked into David Jones, I’ve either been sprayed with women’s perfume, which I’m allergic to, or utterly ignored.

David Jones was built on a premium shopping experience. The first shop to have a deli and food court, that would give you samples, the sales staff would give you that extra smile, a tailor would fit your suit, and customers felt special.

I believe they lost because they stepped away from their core customer, lowered their prices to compete in an imaginary market that wasn’t their core customer and came up short.

Gillette spit in the face of men, Nike spit in the face of athletes, Budweiser spit in the face of rednecks, Jaguar spit in the face of the elite. Get my drift?

Canva

Then there’s Canva. I do love me some Canva, I use it ten times a day. Canva does some great sales work, they teach, they give, their pricing is intentionally lean. There is little to not love.

Canva announced a restructure affecting 1,271 positions, include some job losses, role changes and relocations. The CEO Melanie Perkins explained that growth had slowed for the first time in a decade and that the business needed to reorganise itself for its next stage.

I don’t know enough about Canva’s internal operations to judge whether the restructure is right or wrong. Nor do I know whether the people leaving were contributing to poor performance.

Canva AI sucks. But why is Canva overextending to AI anyway? To me Canva is a fun simple replacement for powerpoint.

So this is also a sales problem around listening and supplying what customers want is a slightly different vector.

Steve jobs Famously said “You’ve got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to try and sell it. I’ve probably made this mistake more than anybody, and I’ve got the scar tissue to prove it.”

Canva understandably wanted to expand and develop and grow as they should, they just put the cart before the horse. One of the lessons I teach is out of Melanie Perkins own mouth that “It’s important to tell the story, because if your audience doesn’t understand the problem, they won’t understand the solution.”

Believe me I am guilty of breaching sales lessons I teach others every day.

Firing a salesperson doesn’t fix a broken sales operation

In my twenties I used to love the power of firing people. Now in my fifties I genuinely hate it because I know the impact it can have.

After 30 years being under the guillotine of sales, being the one on the hook. I know what it is like to be the one accountable. I know in my bones every dollar a company spends, my team need to make ten to cover it. Every day we have to grind hard gris of sales knowing that if I fail in 3 months my peeps lose their jobs.

While we grind cold calls and twenty ‘fuck you to death’ every day, other teams are wasting the money we earned on day spas and inclusivity programs. Then the sales team are the one to get fired.

I have written more on this topic here: https://www.outsold.com.au/company-culture-vs-sales/

More of my thinking on sales management, business development and building better sales operations is available at www.outsold.com.au/blogs.