PROFESSIONAL SELLING AND SALES MANAGEMENT PROF DR DEVA RANGARAJAN Reflection
Reflection PROFESSIONAL SELLING AND SALES MANAGEMENT PROF DR DEVA RANGARAJAN WHAT IS SALES FORCE EFFECTIVENESS? 2| $800 BN VS $200 BN 120 VS GREATER THAN 500 3 4| OBJECTIVE Identify some general trends in sales force management How are companies trying to deal with generating growth using the sales force. © Vlerick Business School THE SELLING WORLD Company External forces Environment Customers Competition Company strategy • Company goals and objectives • Mergers and acquisitions • Product portfolio strategy Sales system Marketing and sales strategy • Market segmentation • Value proposition • Sales process • Go-to-market strategy Sales force Results • Customer • Company • Market segmentation • Value proposition • Sales process • Go-to-market strategy Effectiveness hunt Source: Zoltners et al., Building a winning sales team, 2009 5 © Vlerick Business School Prof Dr Deva Rangarajan INSIGHTS: EXTERNAL ENVIRONMENT Six things keeping sales executives up at night: 1. The end of the “better mouse-trap” model Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011 © Vlerick Business School 1. MOVE TOWARDS SOLUTIONS The move towards solution selling Easier said than done: 1.Resistance to change 2.Silo Mentality 3.New capabilities and skills needed © Vlerick Business School INSIGHTS: EXTERNAL ENVIRONMENT Six things keeping sales executives up at night: 2. The death of F2F transactional selling Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011 © Vlerick Business School 2. FACE TO FACE SELLING? PAST PRESENT Transactional selling Transactional selling © Vlerick Business School Consultative selling Consultative selling Enterprise selling INSIGHTS: EXTERNAL ENVIRONMENT Six things keeping sales executives up at night: 3. Unsustainable hybrid sales force Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011 © Vlerick Business School 3. HYBRID SALES FORCE “Why should my salespeople be taking business away from small stores while they should be robbing banks” adapted from a quote by Larry Ellison- CEO, ORACLE © Vlerick Business School INSIGHTS: EXTERNAL ENVIRONMENT Six things keeping sales executives up at night: 4. The ever extending sales cycle Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011 © Vlerick Business School 4. EVER EXTENDING SALES LIFE CYCLE More complex products/service offerings More members in the customer organization involved in the decision making Rise of the global customer/shared alliances Need to invest early in the sales cycle Creates more stress on salespeople and other functions internally: production, operations, finance © Vlerick Business School INSIGHTS: EXTERNAL ENVIRONMENT Six things keeping sales executives up at night: 5. The decline of RFP selling Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011 © Vlerick Business School 5. THE PROBLEM WITH RFP/RFQ SELLING The problem with RFP/RFQ selling today is that at this stage, value creation opportunity is limited 80% of the decision has been made © Vlerick Business School INSIGHTS: EXTERNAL ENVIRONMENT Six things keeping sales executives up at night: 6. Skyrocketing costs of chasing an opportunity Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011 © Vlerick Business School 6. SKYROCKETING COST OF CHASING AN OPPORTUNITY Do you know what it costs you to chase an opportunity? How can you be sure that your customer will end up buying from you after all the effort you put into chasing an opportunity? © Vlerick Business School THE SELLING WORLD Company External forces Environment Customers Competition Company strategy • Company goals and objectives • Mergers and acquisitions • Product portfolio strategy Sales system Marketing and sales strategy • Market segmentation • Value proposition • Sales process • Go-to-market strategy Sales force Results • Customer • Company • Market segmentation • Value proposition • Sales process • Go-to-market strategy Effectiveness hunt Source: Zoltners et al., Building a winning sales team, 2009 18 © Vlerick Business School Prof Dr Deva Rangarajan FIVE STRATEGIES FOR SALES GROWTH Find growth before competitors do Sell the way your customers want Soup up your sales engine Focus on your people Lead sales growth Source: Sales Growth: Five Proven Strategies from the World’s Sales Leaders by Thomas Baumgartner, Homayoun Hatami, and Jon Vander Ark 19 © Vlerick Business School Prof Dr Deva Rangarajan 1. FIND GROWTH BEFORE YOUR COMPETITORS Look 10 quarters ahead Mine growth beneath the surface Use big data 20 © Vlerick Business School Prof Dr Deva Rangarajan 2. SELL THE WAY YOUR CUSTOMERS WANT Master multi-channel sales Power growth through digital channels Involve sales early with the customers Invest in partners for mutual benefit 21 © Vlerick Business School Prof Dr Deva Rangarajan 3&4. SOUP UP YOUR SALES ENGINE Forces outside the Sales System The Sales System The Sales force effectiveness drivers Definers Sales force structure and roles Shapers Salespeople Exciters Enlighteners Controllers Activities Company factors - R&D - Operations - Finance - Marketing - Product offering - Pricing - Services - Channel - Strategy Customer results Environment - Market growth - Competition - Consolidation - Government - Technology - Random Shocks Company results Source: « Sales Force Effectiveness : A Framework for researchers and practitioners » by Andris Zoltners, Prabhakant Sinha and Sally Lorimer, Journal of Personal Selling and Sales Management, Spring 2008 22 © Vlerick Business School Prof Dr Deva Rangarajan SALES FORCE EFFECTIVENESS DRIVERS The Sales job - Sales strategy - Customer segmentation - Customer offering - Sales process - Go-to-market strategy - Sales force design - Structure and roles - Size - Territory alignment Definers Impact - Roles - Territories - Selling Process The Salesperson - Recruiting Training Coaching Culture formation Compensation - Customer Research - Targeting - Data and tools - Customer relationship management systems Impact Shapers - Skills - Capabilities - Values Enlighte ners - Customer insight Salesperso n / activity - Leadership Compensation Motivation programs Meaningful work - Performance Management - Coordination systems - Vertical and horizontal communication - Compensation Exciters - Inspiration - Motivation Controlle rs - Expectations - Success measures Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009 © Vlerick Business School INSIGHTS- DEFINERS Practices Transactional customers: channel partners and ecommerce initiatives Key customers: KAM/RAM/GAM Structure: Geographical/Matrix 24 | © Vlerick Leuven Gent Management School Issues E-commerce; no structured policy towards managing channel partners Cross/Upselling: Silo mentality Field support for RA/KA including resource allocation/sharing Cross-border pricing issues INSIGHTS- DEFINERS Practices Sales force sizing: Ad-hoc Roles: Usual suspects/new team selling roles to support solution sales 25 | © Vlerick Leuven Gent Management School Issues Workload method: Used only by some companies to size sales force Using existing sales force to fulfill new roles SALES FORCE EFFECTIVENESS DRIVERS The Sales job -Sales strategy - Customer segmentation - Customer offering - Sales process - Go-to-market strategy - Sales force design - Structure and roles - Size - Territory alignment Definers Impact - Roles - Territories - Selling Process The Salesperson - Recruiting Training Coaching Culture formation Compensation - Customer Research - Targeting - Data and tools - Customer relationship management systems Impact Shapers - Skills - Capabilities - Values Enlighte ners - Customer insight Salesperso n / activity - Leadership Compensation Motivation programs Meaningful work - Performance Management - Coordination systems - Vertical and horizontal communication - Compensation Exciters - Inspiration - Motivation Controlle rs - Expectations - Success measures Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009 © Vlerick Business School INSIGHTS: SHAPERS Practices Issues Recruit: Customers/Competit ion/General sales experience/College Graduates with experience Recruit: Customers/Competitio n- quick growth, but stagnate Training: Product/Commercial skills/leadership skills based on IDP/PDP/PDR 27 | © Vlerick Leuven Gent Management School Recruit College Graduates: Lack of university programs with sales curriculum Training: Lack of specific sales management INSIGHTS: SHAPERS Practices Issues Coaching: Increased focus/ sales manager evaluation criteria Coaching: Lack of time/span of control issues Compensation: a lot of focus paid on this issue 28 | © Vlerick Leuven Gent Management School Compensation: Incentives to facilitate crossselling. SALES FORCE EFFECTIVENESS DRIVERS The Sales job -Sales strategy - Customer segmentation - Customer offering - Sales process - Go-to-market strategy - Sales force design - Structure and roles - Size - Territory alignment Definers Impact - Roles - Territories - Selling Process The Salesperson - Recruiting Training Coaching Culture formation Compensation - Customer Research - Targeting - Data and tools - Customer relationship management systems Impact Shapers - Skills - Capabilities - Values Enlighte ners - Customer insight Salesperso n / activity - Leadership Compensation Motivation programs Meaningful work - Performance Management - Coordination systems - Vertical and horizontal communication - Compensation Exciters - Inspiration - Motivation Controlle rs - Expectations - Success measures Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009 © Vlerick Business School INSIGHTS: ENLIGHTENERS Practices Customer Research: Increased importance of strategic marketing Data and Tools: Value propositions, pricing policies, distributor management CRM: Perceived Benefits/ Ease of use, link to soft KPIs 30 | © Vlerick Leuven Gent Management School Issues Customer Research: Sales vs marketing Data and Tools: Centrally/Regionally developed CRM: Value communication, Usage rates, centrally implemented, big brother SALES FORCE EFFECTIVENESS DRIVERS The Sales job -Sales strategy - Customer segmentation - Customer offering - Sales process - Go-to-market strategy - Sales force design - Structure and roles - Size - Territory alignment Definers Impact - Roles - Territories - Selling Process The Salesperson - Recruiting Training Coaching Culture formation Compensation - Customer Research - Targeting - Data and tools - Customer relationship management systems Impact Shapers - Skills - Capabilities - Values Enlighte ners - Customer insight Salesperso n / activity - Leadership Compensation Motivation programs Meaningful work - Performance Management - Coordination systems - Vertical and horizontal communication - Compensation Exciters - Inspiration - Motivation Controlle rs - Expectations - Success measures Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009 © Vlerick Business School 32 | INSIGHTS: EXCITERS Motivation Programs 1. Sales Competition at local/regional/global level to highlight talent for salespeople/sales managers 2. Sales Contests 3. Promotions 4. Training programs for high potentials 5. Special career paths 6. Merit Increases © Vlerick Business School SALES FORCE EFFECTIVENESS DRIVERS The Sales job -Sales strategy - Customer segmentation - Customer offering - Sales process - Go-to-market strategy - Sales force design - Structure and roles - Size - Territory alignment Definers Impact - Roles - Territories - Selling Process The Salesperson - Recruiting Training Coaching Culture formation Compensation - Customer Research - Targeting - Data and tools - Customer relationship management systems Impact Shapers - Skills - Capabilities - Values Enlighte ners - Customer insight Salesperso n / activity - Leadership Compensation Motivation programs Meaningful work - Performance Management - Coordination systems - Vertical and horizontal communication - Compensation Exciters - Inspiration - Motivation Controlle rs - Expectations - Success measures Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009 © Vlerick Business School INSIGHTS: CONTROLLERS Practices Performance management: Central guidelines, decentrally implemented Criteria adjusted for sales profiles Focus more on hard measures than soft ones Limited number of KPIs 34 | © Vlerick Leuven Gent Management School Issues Performance management: Too many exceptions Heterogeneity in maturity of sales profiles in different subsidiaries Move towards solutions/services makes actual margin calculation difficult 5. LEAD SALES GROWTH Lead from the top Create a continuous learning environment 35 | © Vlerick Business School | XX-XX-20XX | CONCLUSIONS IMPLEMENTATION VS. DIAGNOSIS The Sales System The Sales force effectiveness drivers Definers Shapers Sales force structure and roles Salespeo ple Exciter s Enlighten ers Controlle rs Activities Custome r results Implementation Diagnosis Source: « Sales Force Effectiveness : A Framework for researchers and practitioners » by Andris Zoltners, Prabhakant Sinha and Sally Lorimer, Journal of Personal Selling and Sales Management, Spring 2008 © Vlerick Business School Compa ny results 38 | SET UP A BALANCE SCORECARD TO PRIORITIZE HIGH Fix it. NOW. High five! You can afford to procrastinate There are bigger fish to fry Impact of the drivers on performance LOW LOW HIGH Current performance on the drivers | XX-XX© Vlerick Business School 20XX | SUGGESTIONS Over resource the best opportunities Take opportunity selection out of the hands of the salespeople Involve marketing and marketing tools in opportunity selection Push transactional opportunities to cheaper channels Develop clear strategies to manage channels Upgrade the consultative selling effort Equip your sales managers to deal with managing the sales force during this transition © Vlerick Business School CURRENT RESEARCH PROJECTS Key Account Effectiveness: focus groups with Deloitte Characteristics of Successful Salespeople: IBM faculty research grant Drivers of sales force effectiveness: CPI Consulting 40 © Vlerick Business School Prof Dr Deva Rangarajan THANK YOU! [email protected]
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