Six Essentials for Sales Force Success
Written by Forum Corporation posted by Rhys Williams, Director of Consulting on March 4th, 2016.
1 comments
With the current economic environment in New Zealand, achieving success in the field of sales, leadership is more challenging than ever. Modern day corporations face rough sales landscapes on a regular basis, and as pressure builds up to fully express itself through the corporate deal making individuals, a number of key structures and elements must be in place for your organisation to take advantage of the massive opportunities that present themselves.
In this blog post I'll discuss those essential elements and structures. How does your organisation stand up against these structures and elements? Could your sales leaders benefit by reviewing your organisational sales structures in these areas? Is there a hole in your accumulative leadership consciousness or is your sales organisation being challenged by these issues. Join me now and explore these essentials and identify the best-in-class remedies to poor sales performance.According to Jeffery Baker, CEO's and Boards are examining like never before the effectiveness of every aspect of their companies, and this is extending into the sales and marketing realm, often for the first time. As CEO's and CFO's scan for the best use of capital, many are unsure of the returns they should expect for investments in their sales organisations. Meeting and exceeding sales targets is not the same as sales effectiveness.
As experienced sales professionals know (and more CEO's are catching on) there are many reasons for exceeding targets other than great selling skills. Goals set too low, poor competition, hot products, or luckily arriving in a new market just as it rapidly grows are just a few of the conditions that obscure sub-optimal selling abilities.
How then does the head of sales ensure that her organisation is delivering optimal results? That it is truly effective and best-in-class? How do sales leaders determine where to invest in their organisations to increase effectiveness that will lead to improved results? And what returns should a sales leader promise the CEO for investing in the sales organisation, whether that investment is for more salespeople or new technology?
Forum New Zealand has been helping sales organisations improve effectiveness and performance for over 30 years, primarily through building the skills and knowledge of salespeople and sales leaders need to consistently win in their markets. Our research and client experience reveals that while skillful, engaged salespeople and sales managers are critically important, they are not sufficient by themselves for a complex, commercial selling organisation to achieve its goals in today's fast moving, hyper-competitive markets. There are six essential dimensions of a complete Sales Management System needed to operate an effective sales organisation. These dimensions are interdependent, some proceed and inform the others. Their relative impact varies depending on the particular sales strategy. To download a PDF of this blog post click here
Essential Number 1:
Strategy and Structure
A clear and clearly communicated sales strategy based on the company or division
business strategy is required to achieve consistently successful sales results. It is also essential for adapting to the inevitably changing market conditions, whether confronting threats or pursuing new opportunities. Think of strategy as the rudder of a ship. maintaining direction under all weather conditions. A company or division strategy must articulate three components:
- A key business goal (such as growth, profit, market share, etc.)
- The market in which it competes (target customer and geography) and;
- Its competitive advantage (s).
- Segmenting customers and establishing a compelling value proposition for each segment
- Establish a sales channel plan, which identifies the type of sales resource (for example general sales reps, account executives, inside salespeople, independent resellers, etc.)
- Sizing the sales force for each channel
- Assigning specific customers or groups of customers with a channel and territory to each sales team
- Setting expectations for each sales team; that is, a sales quota as well as any key activity metrics
- Establishing core commercial practices and policies such as pricing, contract terms, order management process, financial policies etc.
There is a very quick test an executive can use to determine the strength of the essential Strategy and Structure dimension. Simply ask any salesperson or sales manager to describe what they are accountable for, how they select which customers to call on in their assigned territories (to meet their accountability's), what their value proposition is, and how it addresses their customer needs better than the competition. Crisp, clear answers that a consistent across several sales people and managers indicate a clearly communicated and supported sales strategy. Anything less reveals opportunities for improved sales results as well as vulnerability to competitive threats. Only 50 percent of salespeople rated their company sales strategy as "very clear", according to a Forum study of salespeople selling complex products or services in the US and UK. What percent of your sales force can clearly describe your sales strategy?Essential Number 2
Customer Knowledge
To find, win, and keep customers, sales organisations must work to continuously understand current and prospective customers, especially as their needs and business situations continually shift. An effective sales organisation must have a robust and reliable means of collecting and analysing data about their customers’ buying behaviours and motives including knowing not only quantities and purchase frequency, but also why and how they make buying decisions.
In addition to seeing into "the mind of the customer" effective sales organisations and sales people must understand the dynamics of the industry and market (s) in which their customer competes, including the competitive forces facing the customer. Today's commercial buyers expect sellers to bring useful industry knowledge and insight to the table to help improve their business. Sales organisations that fail to continually integrate customer understanding with industry insight in order to offer ever increasing value propositions will be swept aside by more agile and information savvy competitors.
Essential Number 3
Talent
The sales force - salespeople, sales managers, senior sales leaders, sales support folks - ultimately must execute on the sales strategy and bring unique and compelling value to its customers in order to generate the revenue the company is counting on. To find, retain, and grow talent, sales organisations focus in four broad areas:
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Recruiting and hiring new sales talent: Work with your HR Team to establish ideal profiles for each sales role and insist sales managers actively participate in your company recruiting and hiring process.
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On-boarding and transitioning of new hires and newly promoted staff members: The transition period from start date to fully productive is expensive and time consuming for any sales organisation. Yet the most effective sales organisations invest in formally equipping their new hires for success with customers before they make their first sales call and to ensure they gain a strong foundation for ongoing development.
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Training and Development of Sales Leaders: A 2010 global study by Aberdeen Group of 835 sales organisations found that best -in-class performing sales organisaitons (which represent the top 20 percent of Aberdeen sample) train their people twice as much as average and laggard-performing companies. Regular consistent talent development addresses not only knowledge of company products and services, but of selling skills, tools, and methods; coaching skills: and senior-leader skills. High-performing sales organisations create and use competency models and career pathing linked to sales strategy and priorities to guide formal and informal training curriculums. Well-planned and executed talent development builds confident, high performing sales teams aligned with their company sales strategy. To identify skill gaps and to motivate salespeople to up their game, 360 degree feedback (including customer viewpoints) is frequently used in sales organisations. Coaching salespeople and coaching the coach (the sales managers) is one of the highest impact activities a sales organisation can take to boost sales performance if coaches have the skills and tools to do this well. Forum's research with 111 senior sales executives around the world found that one of the four major categories that distinguish high-performing sales organisations was developing their sales managers, particularly in three areas: coaching, setting strategic direction and motivating salespeople. In a follow up study, Forum found that only 30 percent of salespeople rated their managers as highly effective in these three areas. Finally, investing in development of senior sales leaders using a combination of formal training, executive coaching, and developmental assignments can boost sales performance throughout the organisation.
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Retention strategy and succession planning: Replacing fully productive salespeople is not only expensive, time consuming, and lowers revenue, it can leave customer and territories vulnerable to advances by the competition. Highly effective sales organisations continuously identify candidates for promotion and systematically prepare them to assume greater responsibilities.
Talent management is one area sales leaders cannot delegate completely to others, be it HR or a training department, if they expect their sales teams to outperform the competition and consistently deliver excellent results. Sales executives should partner with the specialists from HR and the training department or an outside sales training company, by clarifying priorities and setting performance standards against which to hire and develop their people. Sales leaders at all levels must actively participate in recruiting new talent and in training, coaching, and reinforcing on a regular basis what their people must know and do. Among best-in-class sales organisations 80 percent of senior executives are highly involved and supportive of sales training efforts, according to Aberdeen Group findings." To download a PDF of this blog post click here.
Essential Number 4
Climate
Employee engagement drives high performance and a positive work climate increases engagement. Everyone knows what it feels like to work in a place. That's climate. But not many leaders understand that climate is manageable and linked to performance. "A positive work climate is not a fun filled place, a lot of warm fuzzy stuff, or a place for relaxation; it is a positive, supportive climate, which is conducive to creative, productive work."
of climate. A study by Daniel Goleman of 3,781 leaders, their behaviour, and its impact on climate found
that leaders who use styles that positively affect the climate had decidedly better financial results than those who did not. His analysis suggests that climate accounts for nearly one third of the results.
A highly engaged sales force has the energy and commitment to persist in the face of all kinds of marketplace challenges, providing a strong advantage especially during times of volatility and uncertainty. A recent forum study revealed climate as one of the four main categories that distinguish high performing sales organisations from moderate performers.
Forum New Zealand and its parent company pioneered organisational climate research and for more than 35 years has helped many clients improve their climate. Organisational climate can be measured with a good deal of precision via surveys that gauge employees' perceptions along the six dimensions. Sales managers can learn to apply the specific practices to push these dimensions higher.
The six dimensions of climate are;
There are four core processes all sales organisations must fully define and consistently follow to ensure high levels of effectiveness:
High-performing sales organisations invest in the following six support practices and systems to boost the engagement and motivation of their sales teams and ensure sales force and to ensure salespeople are well equipped to serve customers and compete successfully.
CEOs want more from their sales organisations, and they want it predictably. Gone are the days, if they ever truly existed, when a sales leader could simply hire lots of high-energy, outgoing sales reps and turn them loose into territories to make customer calls from morning to night and be assured of a predictable, ever increasing revenue stream. Commercial selling is as demanding today as other business functions, including finance, marketing, R&D, and supply chain management, yet the practice of sales force management and sales force effectiveness significantly lags other business disciplines. Very few business schools have caught up to the needs of commercial sales executives. However Forum New Zealand and specifically I am ready to help you now should you feel the desire to contact me.
Our Sales Force Effectiveness Assessment can illuminate the opportunities to increase the performance of your sales force. If you have already determined how to improve your sales organisation and are in the process of either designing or implementing changes, I would be delighted to talk through the issues with you so you can rapidly execute those changes or your new sales force strategy, and sustain the gains from your investments. Contact me here or download a PDF of this blog post by clicking here;
Through 2016 I will be providing key sales leadership insights that shouldn't be missed. To ensure you remain on the cutting technological edge of this important business function register your email and make a comment below with any questions or to let me know your thoughts. Thank you.
Rhys Williams
A highly engaged sales force has the energy and commitment to persist in the face of all kinds of marketplace challenges, providing a strong advantage especially during times of volatility and uncertainty. A recent forum study revealed climate as one of the four main categories that distinguish high performing sales organisations from moderate performers.
Forum New Zealand and its parent company pioneered organisational climate research and for more than 35 years has helped many clients improve their climate. Organisational climate can be measured with a good deal of precision via surveys that gauge employees' perceptions along the six dimensions. Sales managers can learn to apply the specific practices to push these dimensions higher.
The six dimensions of climate are;
- Clarity (or Structure): Salespeople are clear about what is expected of them.
- Standards: Management sets high standards of performance and challenges people to improve.
- Commitment: Salespeople are dedicated to achieving goals and contributing to the organisation's success.
- Responsibility: Salespeople feel personally responsible for their work and accountable for solving problems and making decisions without relying on others for direction.
- Teamwork: People feel that they belong to an organisation characterised by cohesion, mutual warmth, trust and pride.
- Recognition: Salespeople feel excellent performance is recognised and rewarded.
Essential Number 5
Processes
There are four core processes all sales organisations must fully define and consistently follow to ensure high levels of effectiveness:
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New customer acquisition: High performing sales organisations consistently follow an explicit business development process. This begins with some kind of lead generation or prospecting plans and activities for finding new qualified sales opportunities. The process continues on from initial opportunity to proposal, close and follow up. This is sometimes called the sales methodology or selling system. Low performing organisations allow their salespeople to follow whatever process they want. High performing organisations implement and continuously improve a consistent and reliable selling process across their entire sales force.
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Existing customer retention and growth: Similar to new customer acquisition, effective sales organisations follow an explicit process for managing customer relationships in a way that builds value from the customers viewpoint and enables the salesperson to uncover and develop new sales opportunities. This process typically includes regular customer review meetings to discuss the supplier performance and the value received by the customer. Again, high performing sales organisations insist that all sales people follow the same reliable process.
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Opportunity management (a.k.a funnel or pipeline management): This is a core process for sales managers directly responsible for salespeople. It serves several crucial purposes: Generates a reliable forecast of orders and revenue required for both financial management and production planning. Enables sales managers to assist with advancing a sales opportunity towards closing and to allocate sales support resources to various sales opportunities. Ensures consistent application of the selling processes described above. Reveals situations for coaching salespeople for performance improvement.
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Customer service/customer care: This process ensures services/ products are delivered to customers as promised, revenue flows as forecast, opportunities to increase order size and/or sell new orders are recognised and acted upon immediately, and any problem reports from customers are fixed promptly. This process maybe managed outside the organisation, but it is nevertheless critical that sales leaders ensure it works consistently and effectively. Customer loyalty, additional sales, and referrals to new prospects depend on high quality customer care processes.
Essential Number 6
Support Systems
High-performing sales organisations invest in the following six support practices and systems to boost the engagement and motivation of their sales teams and ensure sales force and to ensure salespeople are well equipped to serve customers and compete successfully.
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Competitive intelligence: Collect and analyse intelligence about competition and provide current summaries to sales force, including advice on how to position against competitors' strengths and vulnerabilities. Identify top two or three competitors in each market, monitor their activity in accounts, seeking to understand and exploit their sales strategy. Anticipate and prepare for emerging competitors too. Although not technically a competitor, pay close attention to customers' moves to produce your product/services themselves and develop value propositions to defeat this move.
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Sales support personnel: McKinsey reported back in 2009 that, during the most severe recession in 80 years, high-performing sales organisations maintained and some even increased the level of sales support investment to optimise customer contact time for their salespeople. According to McKinsey the key to sizing sales support is to "examine the customer portfolio. How much effort really goes into each customer and transaction? Which services does each of them need? What are their real profit margins? Which customers and markets are growing and which are shrinking? Understanding customers allows companies to focus sales resources where they are needed and cut the waste, not value." Determine the percent of time your salespeople spend preparing for and meeting with customers, and consider how to increase this percentage through more effective sales support.
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Performance management (including standards and accountabilities). Set clear, achievable performance goals in at least two key areas: sales quota and sales activities. Ensure they align with overall sales organisation goals and strategy. Measure performance and provide feedback to salespeople and managers reguarly (at least monthly, although daily and weekly reporting can be effective for some goals). Apply standards consistently throughout the organisation and hold people accountable. Conduct formal employee performance reviews at least annually.
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Rewards and Recognition: Establish written sales incentive compensation plan consistent with the sales strategy and performance goals discussed above. Ensure that the business potential of assigned territory is sufficient for each salesperson and manager to overachieve their incentive compensation plan. Find opportunities to recognise formally and informally outstanding contributions to the business.
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Business scorecard with predictive metrics: Establish and publish regularly a scorecard that reports the "critical few" business results measures: financial, customer behaviour (such as wins, retention rates etc.), sales activities (pipleline quality, quantity, velocity etc), and sales force engagement or climate (see success dimension 4 above). Salespeople, sales leaders at all levels, and sales support teams should all receive regular scorecard reports that are relevant to their accountabilitiies and clearly linked to their sales strategy.
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Information Systems: All modern management systems rely on timely, robust information to operate effectively. Sales leaders should require their information systems to supply actionable data in at least the following key areas:
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Financial data: Provides a picture of total revenue and profitability (at least gross profit) that can be sorted in any number of ways, including by customer, sales rep, sales team, region, industry, channel, weekly, monthly, yearly and so on. Financial data should also supply sufficient cost information for use in managing sales force productivity.
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Customer relationship data: SFA/CRM (sales force automation/customer relationship management) platforms have become a must for any company selling multiple products in multiple customer segments. Sale reps and sales leaders can track and maintain a history of sales activity and customer interactions, as well as extensive customer contact information.
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Knowledge management: This should be easily searchable, current repository of all available information regarding a company's products, services, pricing, methods, policies, procedures, and so forth. Rather than asking sales reps to spend more precious time trying to learn and remember the ever growing amounts of company information, shift to a system that quickly enables them to find what they need quickly when they need it.
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Business intelligence: This is a collection of systems (and arguably other process) that helps sales professionals make use of data from three areas: customer specific buying patterns, industry specific trends and macroeconomic trends. At a minimum salespeople should have access to basic customer and industry data to prepare them to speak knowledgeably during customer calls. High performing sales organisations are gaining competitive advantage by crunching customer proprietary data with more widely available market information to generate insights for their customers and to uncover new opportunities to help their customers to create more value.
Is Your Sales Organisation Ready for Tomorrows Challenges?
CEOs want more from their sales organisations, and they want it predictably. Gone are the days, if they ever truly existed, when a sales leader could simply hire lots of high-energy, outgoing sales reps and turn them loose into territories to make customer calls from morning to night and be assured of a predictable, ever increasing revenue stream. Commercial selling is as demanding today as other business functions, including finance, marketing, R&D, and supply chain management, yet the practice of sales force management and sales force effectiveness significantly lags other business disciplines. Very few business schools have caught up to the needs of commercial sales executives. However Forum New Zealand and specifically I am ready to help you now should you feel the desire to contact me.
Our Sales Force Effectiveness Assessment can illuminate the opportunities to increase the performance of your sales force. If you have already determined how to improve your sales organisation and are in the process of either designing or implementing changes, I would be delighted to talk through the issues with you so you can rapidly execute those changes or your new sales force strategy, and sustain the gains from your investments. Contact me here or download a PDF of this blog post by clicking here;
Through 2016 I will be providing key sales leadership insights that shouldn't be missed. To ensure you remain on the cutting technological edge of this important business function register your email and make a comment below with any questions or to let me know your thoughts. Thank you.
Rhys Williams
1 Comments
So what return should a Sales Leader promise the CEO for investing in the Sales Organisation? Cheers.