Reinventing your Sales Organization
By Richard Snowden, Senior Partner
RavenHouse International
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Is your cost of sale up? Is sales productivity down? Are you wondering if you have the right people with the right stuff? Maybe it's time to re-tool your sales organization.
Feature-benefit selling has ruled the roost for nearly two decades. It's had a great run. But like all great runs, this one is nearing its end.
Both sales managers and sales reps are reporting that sales techniques that worked well in the past just aren't cutting it today. A national survey of sales organizations conducted by RavenHouse International revealed:
• FACT: More than half of all salespeople don't feel they have
what it takes to be an effective salesperson
• FACT: Three-quarters of veteran salespeople don't believe that
their company is giving them the kind of training and
support they require
• FACT: Nearly two-thirds of sales managers feel unprepared
to lead their sales team in today's challenging sales world
The survey further concludes that customers are not at all happy with their sales experiences.
• 7 out of 10 customers believe that the sales reps that service
them are product-focused rather than customer-focused
• Customers feel that only 1 in 10 sales reps adds any real value
• More than half of all customers believe that salespeople are
unable or unwilling to create a business to business
customer-supplier partnership
Why are both customers and sales professionals so dissatisfied? For one thing, the expectations of customers have changed dramatically in only a few years.
Fueled by the Total Quality Management movement of the last decade, business buyers have raised the bar in virtually every area. And that includes what they expect from their suppliers in terms of sales and service.
Feature-benefit selling, once the cutting edge of modern sales technique is fast becoming obsolete. Sophisticated consultative selling which adds value beyond the product or service sold is quickly becoming the gold standard for the modern sales organization.
How Does Your Sales Organization Rate?
Is your sales organization designed to withstand an increasingly brutal competitive environment? Is your sales force equipped with the business acumen and selling tools to win with consistency? Find a quiet moment and reflect on the sales issues below. Grade your company using this scale:
• 1: We measure okay
• 2: We're okay but need to improve
• 3: We have a long way to go
Sales Effectiveness Factors
- Customer retention
Our salespeople have a clear understanding of the retention criteria for each of their customers and have a specific strategy to retain key customers.
SCORE: _________
- Key decision criteria
Our salespeople understand the top 3 to 5 "critical deciders" that customers use to determine which supplier to select.
SCORE: _________
- Value proposition
Our salespeople are able to demonstrate meaningful competitive advantage and can articulate our company's value proposition convincingly.
SCORE: _________
- Business acumen
Our salespeople can build a compelling business case for our products and services.
SCORE: _________
- Opportunity analysis
Our salespeople are consultants who know how to uncover business needs and position our offerings as solutions to business problems.
SCORE: _________
- Commodity thinking
Our salespeople are able to move customers from commodity thinking to viewing our company as a value added business partner.
SCORE: _________
- Share-of-customer
Our salespeople have the skills to develop the full business potential within their key accounts.
SCORE: _________
- Competitor bakeoffs
Our salespeople know how to consistently beat our key competitors.
SCORE: _________
- Sales leadership
Our sales managers are skilled in hiring high performing salespeople, creating a performance based sales culture, and sales coaching.
SCORE: _________
If your scores are not as high as you'd like, you're not alone. Keep in mind, however, that you're competitors may already be working to reinvent their sales organization to reflect new market realities. Can you afford to do less?
Is the New World Salesperson Really so Different?
In a word, yes – very different. Recently RavenHouse International conducted global sales research in the United States, Canada, Australia, and throughout Western Europe. The target was account executives that sell high ticket. The task was to identify what's different about the worlds best-of-the-best salespeople.
The findings surprised even the experts. The factors that differentiated the top performers had little to do with superior verbal skills, outstanding presentation ability or closing techniques. In fact, top performance has as much to do with who the salesperson is as much as what they do.
A few of the critical competencies included:
• Strategic business focus: Ability to quickly map a complex
sale while developing a compelling business case for change
• Diagnostic thinking: Ability to add business value through
analytical rigor and helping customers to see new possibilities
• Conceptual integration: Ability to balance thinking outside
the box with the customer's business requirements to create
exciting yet profitable solutions
All of this has some interesting implications. Ask yourself, which of the sales competencies are not trainable? Which competencies reflect who the person is rather than learnable skills?
Assuming that these sales competencies do indeed reflect reality, is it any wonder that more than half of all salespeople hired turn out to be disappointing performers? Although competency based hiring gets lots of press today, the reality is that most companies aren't doing it – and they're paying the price.
What to Do: Part 1
Current research suggests that If your sales organization is built on conventional wisdom, its days are numbered. Many companies are realizing that reinventing the sales function can produce an impressive advantage. Here are three strategies that will quickly pay dividends:
- Hire the right stuff. Recruit and select using a competency
model that accurately reflects what top performing salespeople
do and who they are. - Train in the right stuff. Get rid of traditional sales training.
It isn't working. Train your sales force in the new skills that
are being documented in the best practices of today's
top sales performers. - Give yours sales managers the right stuff. Provide them
with tools to improve strategic sales planning, performance
coaching and sales automation.
Who's Done It?
Charles Forting is Vice President of Sales and Marketing for a global marketer of assembly robotics. Eighteen months ago he realized that his sales organization was obsolete.
"Like Rip Van Winkle, we awoke one morning and realized that the world had changed and we hadn't. It wasn't until our competitors cleaned our clock that we woke up and started to pay attention.
We realized that we were hiring incorrectly, training incorrectly, and managing incorrectly. After losing 30% of our key accounts to the competition, we lost our arrogance and with our customer's help, completely redesigned our sales function.
We're now focused on attracting the very best salespeople. We've equipped them with state of the art sales skills. Our sales managers now spend most of their time recruiting salespeople with the right competencies and developing their talent. And, it's paying off. Unlike last years revenue decline, this year will show a 40% revenue gain."
What to Do: Part 2
Assuming you have hired salespeople with the right stuff and you're supporting them, take the second step in reinventing your sales function by shifting your focus from inside out to outside in. In other words, let your customers provide the insights needed to begin the process of building your new sales strategy. It need not be complicated. Many companies have used the following simple interview protocol to provide the outside in focus.
Make an appointment to call on some of your customers. Make it clear that the agenda is not to sell, but rather to learn. Be certain that they understand that what you learn will be used to improve what you deliver to them. Discourage sugar coating.
Voice of the Customer Research Agenda
• What are the first things that come to mind when you
think of your relationship with us?
• What do competitors do better than we do?
• What do you expect from us?
• How could we improve what we deliver to you?
• What are we not doing that you'd like us to do?
• What is changing in your business that may have
an impact on what we deliver to you?
• How well do we understand what you want and need?
• What should I tell our company executives is most
important to retain you as a customer?
David Dinning, a senior sales executive at an international computer service firm, is sold on improving his sales organization outside in.
"We have learned a lot since we've adopted an outside in strategy. We were surprised to find out how little we really knew about out customers. Our salespeople monitor the "customers heartbeat" using it as a diagnostic for strategic account development planning. That builds customer loyalty and preempts the competition. Since we've been using our outside in customer information process, we've built customer loyalty, and improved retention of key accounts."
What to Do: Part 3
The quality of your strategic sales planning is critical. Think of strategy as simply, where to play and how to win. Ensure that your sales strategy is an integrated subset of your overall business strategy. Make sales strategy planning an annual event. Get your key people together for an intense off-sight meeting. Here are some suggested points to ponder:
• Customer retention
What will it take to retain customers in the future?
• Key decision criteria
What are the top 3-5 "critical deciders" customers use
to determine which vendor to select?
• Competitive advantage
Do customers see our competitive advantages?
If so, what are they?
• Customer sacrifice index
What sacrifices do customers make to do business with us?
• Commodity thinking
To what degree do customers see us as a seller of a
commodity versus a business partner adding business value?
What do we need to change?
• Satisfiers/delighters
What are the important customer satisfiers?
What does it take to delight customers?
• Salesperson perception
How are our salespeople viewed? How do they add value?
• Salesperson skills
Do our salespeople have the sales and business skills
required to add business value?
• Care-abouts
What are the customer care-abouts in regard to the
sales experience? What are the care-abouts in regard to the
products and services we deliver?
• Switching criteria
What factors drive the decision to switch to a competitor?
• Value added service
Do customers believe we add value that addresses key
business challenges? If so, how?
• Strategic leverage
What 3 things must we focus on in the next year to
leverage our sales system?
• Channel selection
Are we optimizing our current sales channels?
What channels will be most profitable in the future?
Integrated Strategic Selling
Over the last decade leading companies created business leverage through Total Quality Management. Over the next decade, companies will create significant competitive advantage through Integrated Strategic Selling, a process that creates line-of-sight between customer needs and sales strategy.
I.S.S. Integrates your sales system enabling you to leverage customer information, account executive selection and development, sales management, performance management, sales force automation and compensation. It will also remove the walls between sales and the other functions in your company.
A successful reinvention of your sales organization requires the right vision the right information, strategic and tactical planning and of course, the right people. It requires a commitment to arm both sales managers and the sales force with new tools to be successful in a new sales world.
Is sales system reinvention fashionable, fast, and free? Unfortunately not. However, if you're ready to dispense with the superficial and commit to a thoughtful, planned, systemic approach to reinventing your sales organization, your company can own breakthrough sales performance.
