Sales Management 101 +

sales 1There’s no escaping the impact of the sales force on your company’s growth trajectory. This is the frontline group best placed to gain an intimate understanding of existing customers, to observe the forces at work in an industry, and – within learning organizations – to identify potential new business.

During the past year, various management scientists have worked closely with thousands sales executives around the world, across a range of industries, to identify the critical elements that distinguish true sales leaders from also-rans. This article partially adapted from the work of these insider researchers highlight four intriguing ideas the executives described for leveraging the sales force to jump-start growth. Together, these suggestions offer practical insights for sales groups, as well as a starting point for discussions among CEOs and other senior managers hoping to get more from sales and marketing investmentssales 2

Hunt and farm

We all know how easy and common it is for organizations to fall into the habit of seeking sales growth only through existing customers. Even though the sales force is typically best placed to find and approach potential clients, individual member of the sales force usually shun the uncomfortable task of cold-calling in favour of selling to customers they know well. Yet there’s only so much each customer can buy, so both market development and product diversification are critical for growth.

Some of the more successful companies had moved forward to deal with this problem by separating these activities. Its sales leader designated some sales people as “hunters,” who focused exclusively on finding new prospects, while “farmer” reps concentrated on existing customers. The model succeeded initially but later foundered as hunters became discouraged by the time and effort required for their relatively scant wins, as well as the perception that they were less important compared with farmers. As attrition rates among hunter sales people grew, these companies changed tack. To demonstrate the importance of finding new customers, many now designated one day a month as a “hunting day,” when all sales people would exclusively chase new prospects.

The rest of the time, they could focus largely on existing customers. The results for many of these companies were astounding: in a single day, they signed up as many new customers as it normally did in two months. Setting aside one day a month for hunting new business is now an ingrained part of these sales 3companies’ sales practices.

Motivate with more than money

The basic remuneration model for the sales force is simple: a base salary offers security; incentives and form of short and medium term bonuses provide the reciprocal drive to perform. Most companies work endlessly to optimize the balance

Money – especially in developing nations – usually matter most but money alone does fulfil the necessary and sufficient conditions for ever bettering performance. Most companies have tried need all manner of compensation plans before determining that while carrots and sticks did influence the sales performance of its sales force, lasting result comes from anything and above and beyond, and there is a consistent proof that suggest the need for periodic adjustment and change to meet the co-evolutions taking place within the company, and, with the company’s larger competitive landscape and environment. On top of this adaptive quality, any enabled sales force would also mean that their continuous skills and applied knowledge developments are deeply embedded within the strategic posturing of the company.

Boost sales without slashing prices

Companies experiencing flat or declining sales often elect to cut prices to spur demand. Yet sometimes, averages lie: a decline across a market doesn’t mean that all market segments are weakening. Sales leaders must work with price guideline which takes into account the competitive dynamics of each specific market segment (s).

The truth of the matter is that the familiar characteristics of each of the typical companies’ various market segments varied wildly from one given time frame to the next, from selected context to another.  Some might be growing fast; a few might be standing still as markets and consumers’ preference diverge and converge; others still might be flat-lining.

Complex Adaptive System perspective dictates that moving forward sales volume targets need to be strongly based on each segment’s characteristics. These targets should preferably incorporate metrics such as the economic growth rate in geographies where certain segment (s) of the consumers are strategically located, the strength of the company’s operational assets relative to those of its competitors, and a time bounded identifier of whether the company was losing or gaining customers at accelerating or decelerating rates.sales 4

 

Rudolf Tjandra (2011)

Posted in English, Knowledge & Beyond, Rudolf's Articles.