professional selling and sales management prof dr deva rangarajan reflection
TRANSCRIPT
PROFESSIONAL SELLING AND SALES MANAGEMENT
PROF DR DEVA RANGARAJAN
Reflection
WHAT IS SALES FORCE EFFECTIVENESS?
2 |
$800 BN VS $200 BN
120 VS GREATER THAN 500
3
© Vlerick Business School
OBJECTIVE
Identify some general trends in sales force management
How are companies trying to deal with generating growth using the sales force.
4 |
Prof Dr Deva Rangarajan5 © Vlerick Business School
THE SELLING WORLD
Source: Zoltners et al., Building a winning sales team, 2009
Company
Companystrategy
Marketing andsales strategy
Sales force
Environment
Customers
Competition
Results• Customer• Company
Externalforces
Sales system
Effectiveness hunt
• Company goals and objectives• Mergers and
acquisitions• Product
portfolio strategy
• Market segmentation• Value
proposition• Sales process• Go-to-market
strategy
• Market segmentation• Value
proposition• Sales process• Go-to-market
strategy
© Vlerick Business School
INSIGHTS: EXTERNAL ENVIRONMENT
Six things keeping sales executives up at night:
Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011
1. The end of the “better mouse-trap” model
© 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:
Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011
2. The death of F2F transactional selling
© Vlerick Business School
Transactional selling
Enterprise selling
Consultative selling
2. FACE TO FACE SELLING?
Transactional selling
Consultative selling
PAST PRESENT
© Vlerick Business School
INSIGHTS: EXTERNAL ENVIRONMENT
Six things keeping sales executives up at night:
Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011
3. Unsustainable hybrid sales force
© 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:
Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011
4. The ever extending sales cycle
© 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:
Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011
5. The decline of RFP selling
© 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:
Source: Neil Rackham session at the Global Sales Science Institute meet- Milan 2011
6. Skyrocketing costs of chasing an opportunity
© 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?
Prof Dr Deva Rangarajan18 © Vlerick Business School
THE SELLING WORLD
Source: Zoltners et al., Building a winning sales team, 2009
Company
Companystrategy
Marketing andsales strategy
Sales force
Environment
Customers
Competition
Results• Customer• Company
Externalforces
Sales system
Effectiveness hunt
• Company goals and objectives• Mergers and
acquisitions• Product
portfolio strategy
• Market segmentation• Value
proposition• Sales process• Go-to-market
strategy
• Market segmentation• Value
proposition• Sales process• Go-to-market
strategy
Prof Dr Deva Rangarajan19 © Vlerick Business School
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
Prof Dr Deva Rangarajan20 © Vlerick Business School
1. FIND GROWTH BEFORE YOUR COMPETITORS
Look 10 quarters ahead
Mine growth beneath the surface
Use big data
Prof Dr Deva Rangarajan21 © Vlerick Business School
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
Prof Dr Deva Rangarajan22 © Vlerick Business School
3&4. SOUP UP YOUR SALES ENGINE
Company results
Sales force structure and
roles
Customer results
ActivitiesSalespeople
Definers Shapers Exciters Enlighteners Controllers
The Sales force effectiveness drivers
The Sales SystemForces outside the Sales
System
Company factors- R&D- Operations- Finance- Marketing- Product
offering- Pricing- Services- Channel- Strategy
Environment- Market growth- Competition- Consolidation- Government- Technology- Random
Shocks
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
SALES FORCE EFFECTIVENESS DRIVERS
Shapers
- Recruiting- Training- Coaching- Culture formation- Compensation
Enlighteners
- Customer Research- Targeting- Data and tools- Customer relationship management systems
Exciters
- Leadership- Compensation- Motivation programs- Meaningful work
Controllers
- Performance Management- Coordination systems- Vertical and horizontal communication- Compensation
Definers
- Sales strategy - Customer segmentation - Customer offering - Sales process- Go-to-market strategy- Sales force design - Structure and roles - Size - Territory alignment
- Skills- Capabilities- Values
- Customer insight
- Inspiration- Motivation
- Expectations- Success measures
- Roles- Territories- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson / activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Leuven Gent Management School
Practices
Transactional customers: channel partners and e-commerce initiatives
Key customers: KAM/RAM/GAM
Structure: Geographical/Matrix
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
24 |
© Vlerick Leuven Gent Management School
Practices
Sales force sizing: Ad-hoc
Roles: Usual suspects/new team selling roles to support solution sales
Issues
Workload method: Used only by some companies to size sales force
Using existing sales force to fulfill new roles
INSIGHTS- DEFINERS
25 |
© Vlerick Business School
SALES FORCE EFFECTIVENESS DRIVERS
Shapers
- Recruiting- Training- Coaching- Culture formation- Compensation
Enlighteners
- Customer Research- Targeting- Data and tools- Customer relationship management systems
Exciters
- Leadership- Compensation- Motivation programs- Meaningful work
Controllers
- Performance Management- Coordination systems- Vertical and horizontal communication- Compensation
Definers
-Sales strategy - Customer segmentation - Customer offering - Sales process- Go-to-market strategy- Sales force design - Structure and roles - Size - Territory alignment
- Skills- Capabilities- Values
- Customer insight
- Inspiration- Motivation
- Expectations- Success measures
- Roles- Territories- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson / activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Leuven Gent Management School
Practices
Recruit: Customers/Competition/General sales experience/College Graduates with experience
Training: Product/Commercial skills/leadership skills based on IDP/PDP/PDR
Issues
Recruit: Customers/Competition- quick growth, but stagnate
Recruit College Graduates: Lack of university programs with sales curriculum
Training: Lack of specific sales management
INSIGHTS: SHAPERS
27 |
© Vlerick Leuven Gent Management School
Practices
Coaching: Increased focus/ sales manager evaluation criteria
Compensation: a lot of focus paid on this issue
Issues
Coaching: Lack of time/span of control issues
Compensation: Incentives to facilitate cross-selling.
INSIGHTS: SHAPERS
28 |
© Vlerick Business School
SALES FORCE EFFECTIVENESS DRIVERS
Shapers
- Recruiting- Training- Coaching- Culture formation- Compensation
Enlighteners
- Customer Research- Targeting- Data and tools- Customer relationship management systems
Exciters
- Leadership- Compensation- Motivation programs- Meaningful work
Controllers
- Performance Management- Coordination systems- Vertical and horizontal communication- Compensation
Definers
-Sales strategy - Customer segmentation - Customer offering - Sales process- Go-to-market strategy- Sales force design - Structure and roles - Size - Territory alignment
- Skills- Capabilities- Values
- Customer insight
- Inspiration- Motivation
- Expectations- Success measures
- Roles- Territories- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson / activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Leuven Gent Management School
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
Issues
Customer Research: Sales vs marketing
Data and Tools: Centrally/Regionally developed
CRM: Value communication, Usage rates, centrally implemented, big brother
INSIGHTS: ENLIGHTENERS
30 |
© Vlerick Business School
SALES FORCE EFFECTIVENESS DRIVERS
Shapers
- Recruiting- Training- Coaching- Culture formation- Compensation
Enlighteners
- Customer Research- Targeting- Data and tools- Customer relationship management systems
Exciters
- Leadership- Compensation- Motivation programs- Meaningful work
Controllers
- Performance Management- Coordination systems- Vertical and horizontal communication- Compensation
Definers
-Sales strategy - Customer segmentation - Customer offering - Sales process- Go-to-market strategy- Sales force design - Structure and roles - Size - Territory alignment
- Skills- Capabilities- Values
- Customer insight
- Inspiration- Motivation
- Expectations- Success measures
- Roles- Territories- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson / activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Business School
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
32 |
© Vlerick Business School
SALES FORCE EFFECTIVENESS DRIVERS
Shapers
- Recruiting- Training- Coaching- Culture formation- Compensation
Enlighteners
- Customer Research- Targeting- Data and tools- Customer relationship management systems
Exciters
- Leadership- Compensation- Motivation programs- Meaningful work
Controllers
- Performance Management- Coordination systems- Vertical and horizontal communication- Compensation
Definers
-Sales strategy - Customer segmentation - Customer offering - Sales process- Go-to-market strategy- Sales force design - Structure and roles - Size - Territory alignment
- Skills- Capabilities- Values
- Customer insight
- Inspiration- Motivation
- Expectations- Success measures
- Roles- Territories- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson / activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Leuven Gent Management School
Practices
Performance management: Central guidelines, decentrally implemented
Criteria adjusted for sales profiles
Focus more on hard measures than soft ones
Limited number of KPIs
Issues
Performance management: Too many exceptions
Heterogeneity in maturity of sales profiles in different subsidiaries
Move towards solutions/services makes actual margin calculation difficult
INSIGHTS: CONTROLLERS
34 |
© Vlerick Business School
5. LEAD SALES GROWTH
Lead from the top
Create a continuous learning environment
| XX-XX-20XX |35 |
CONCLUSIONS
© Vlerick Business School
Company
results
Sales force structure and
roles
Customer resultsActivities
Salespeople
Definers ShapersExciter
sEnlighten
ersControlle
rs
The Sales force effectiveness drivers
The Sales System
IMPLEMENTATION VS. 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
Implementation
Diagnosis
© Vlerick Business School
SET UP A BALANCE SCORECARD TO PRIORITIZE
| XX-XX-20XX |38 |
Fix it. NOW. High five!
You can afford to procrastinate
There are bigger fish to fry
Impact of the drivers on
performance
Current performance on the driversLOW HIGH
LOW
HIGH
© Vlerick Business School
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
Prof Dr Deva Rangarajan40 © 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
THANK YOU!