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Vlerick Sales Management Forum – vol. 1

Sales Force Effectiveness: A Qualitative and Quantitative Assessment

Prof. Dr. Deva RANGARAJAN

© Vlerick Leuven Gent Management School

Agenda

Objective

Framework

Methodology

Findings/Insight

Conclusion

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Objective

How are organizations managing the performance of

their sales forces?

Identify some general trends in sales force

management

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Company

results

Sales force

structure and roles

Customer

resultsActivitiesSalespeople

Definers Shapers Exciters Enlighteners Controllers

The Sales force effectiveness drivers

The Sales System Forces 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

Sales System

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


Methodology

Qualitative Study

1. Interviews with sales executives

from over 40 companies

2. 27 Industrial Manufacturers

6 Consumer Good

Manufacturers

6 Apparel Manufacturers

3 others

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Quantitative study

1. Online questionnaire

2. Convenience sample of 97

respondents, over 70

companies

3. Total of 85 usable responses

4. Over 80% of respondents in

sales


Findings/Insights

Drivers of Sales Force Effectiveness

1. Definers

2. Shapers

3. Enlighteners

4. Exciters

5. Controllers

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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


Mixed feelings around go-to-market strategies

Agree

8%

Completely

Agree

5%Completely

disagree

1%

Disagree

16%

Neither agree

nor disagree

24%

Somewhat

agree

33%

Somewhat

disagree

13%

Agree

15%

Completely

Agree

4%

Completely

disagree

5%

Disagree

7%

Neither

agree nor

disagree

20%

Somewhat

agree

28%

Somewhat

disagree

21%

We have a clear go-to-market process We have a clear, well mapped out key

account management policy


Sales force sizing is an issue

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Agree

15%

Completely

Agree

2%

Completely

disagree

4%

Disagree

12%

Neither

agree nor

disagree

17%

Somewhat

agree

22%

Somewhat

disagree

28%

We have the right number of sales

people to implement our strategy

We calculate the amount of people

needed to implement our strategy

Agree

12% Completely

Agree

3%Completely

disagree

14%

Disagree

25%

Neither

agree nor

disagree

10%

Somewhat

agree

11%

Somewhat

disagree

25%


Our sales force is structured optimally to implement

our strategy

| XX-XX-20XX |11 |

Agree

13%Completely Agree

5%

Disagree

12%

Neither agree nor

disagree

27%

Somewhat agree

22%

Somewhat disagree

21%


Territory alignment is a contentious issue

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Agree

9%

Completely

Agree

1%

Completely

disagree

14%

Disagree

21%Neither

agree nor

disagree

12%

Somewhat

agree

13%

Somewhat

disagree

30%

We calculate the workload for our

salespeople

We calculate territory potential of our

salespeople

Agree

11%Completely

Agree

2%Completely

disagree

10%

Disagree

15%

Neither

agree nor

disagree

14%

Somewhat

agree

21%

Somewhat

disagree

27%


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

| XX-XX-20XX |13 |


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

| XX-XX-20XX |14 |



Shapers

- Recruiting

- Training

- Coaching

- Culture formation

- Compensation

Enlighteners

- Customer Research

- Targeting

- Data and tools


management systems

Exciters

- Leadership

- Compensation


- Meaningful work

Controllers




communication

- Compensation

Definers

-Sales strategy


- Customer offering

- Sales process




- Size


- Skills

- Capabilities

- Values

- Customer insight

- Inspiration

- Motivation

- Expectations

- Success measures

- Roles

- Territories

- Selling Process

Impact


Salesperson /

activity



Career paths and coaching need more attention

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We have clear documented job descriptions

including career paths for our sales force

We have clear objectives evaluating our

sales managers on the extent to which they

coach their sales people

Agree

20%

Completely

Agree

10%

Completely

disagree

7%Disagree

16%

Neither

agree nor

disagree

19%

Somewhat

agree

15%

Somewhat

disagree

13%Agree

12%Completely

Agree

4%

Completely

disagree

7%

Disagree

12%

Neither

agree nor

disagree

19%

Somewhat

agree

20%

Somewhat

disagree

26%


Objective setting and compensation systems are

more in line with sales force expectations

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We set different performance objectives

based on the profile of the salespeople

Our compensation schemes are linked

to our evaluations

Agree

20%

Completely

Agree

11%

Completely

disagree

9%Disagree

14%

Neither

agree nor

disagree

8%

Somewhat

agree

24%

Somewhat

disagree

14% Agree

23%

Completely

Agree

12%

Completely

disagree

4%Disagree

12%

Neither

agree nor

disagree

14%

Somewhat

agree

27%

Somewhat

disagree

8%


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

| XX-XX-20XX |18 |


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

| XX-XX-20XX |19 |



Shapers

- Recruiting

- Training

- Coaching

- Culture formation

- Compensation

Enlighteners

- Customer Research

- Targeting

- Data and tools


management systems

Exciters

- Leadership

- Compensation


- Meaningful work

Controllers




communication

- Compensation

Definers

-Sales strategy


- Customer offering

- Sales process




- Size


- Skills

- Capabilities

- Values

- Customer insight

- Inspiration

- Motivation

- Expectations

- Success measures

- Roles

- Territories

- Selling Process

Impact


Salesperson /

activity



Decision-making process mainly rests with sales

managers and/or headquarters

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CRM tools implementation is a mixed bag

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Agree

12% Completely Agree

5%

Completely disagree

7%

Disagree

14%

Neither agree nor

disagree

19%

Somewhat agree

25%

Somewhat disagree

18%

We are quite successful in implementing CRM tools & getting

the buy-in from the salesforce


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

| XX-XX-20XX |23 |



Shapers

- Recruiting

- Training

- Coaching

- Culture formation

- Compensation

Enlighteners

- Customer Research

- Targeting

- Data and tools


management systems

Exciters

- Leadership

- Compensation


- Meaningful work

Controllers




communication

- Compensation

Definers

-Sales strategy


- Customer offering

- Sales process




- Size


- Skills

- Capabilities

- Values

- Customer insight

- Inspiration

- Motivation

- Expectations

- Success measures

- Roles

- Territories

- Selling Process

Impact


Salesperson /

activity



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

| XX-XX-20XX |25 |



Shapers

- Recruiting

- Training

- Coaching

- Culture formation

- Compensation

Enlighteners

- Customer Research

- Targeting

- Data and tools


management systems

Exciters

- Leadership

- Compensation


- Meaningful work

Controllers




communication

- Compensation

Definers

-Sales strategy


- Customer offering

- Sales process




- Size


- Skills

- Capabilities

- Values

- Customer insight

- Inspiration

- Motivation

- Expectations

- Success measures

- Roles

- Territories

- Selling Process

Impact


Salesperson /

activity



Well documented, hard objective measures

seem to be in place

| XX-XX-20XX |27 |

We are evaluated more on hard, objective

measures than soft, subjective ones

We have clear, well documented

processes for evaluating the sales

force

Agree

29%

Completely

Agree

9%

Completely

disagree

2%Disagree

11%

Neither

agree nor

disagree

12%

Somewhat

agree

24%

Somewhat

disagree

13%Agree

14%

Completely

Agree

10%

Completely

disagree

4%

Disagree

11%Neither

agree nor

disagree

21%

Somewhat

agree

20%

Somewhat

disagree

20%


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

| XX-XX-20XX |28 |

CONCLUSIONS


Overall, salesforce is quite satisfied

| XX-XX-20XX |30 |

Agree

28%

Completely

Agree

1%

Neither agree

nor disagree

23%

Somewhat

agree

29%

Somewhat

disagree

19%

… but would not

recommend the job

to others


Company

results

Sales force

structure and roles

Customer

resultsActivitiesSalespeople

Definers Shapers Exciters Enlighteners Controllers

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


Set up a balance scorecard to prioritize

| XX-XX-20XX |32 |

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 drivers

LOW HIGH

LOW

HIGH


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

THANK YOU

[email protected]

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