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The Changing Roleof Field Sales
Featuring:Mike Marks, Indian River Consulting Group
Jenel Stelton-Holtmeier, Modern Distribution Management
Sept. 22, 2017
Sponsored by:
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The Key Problems We Solve
Customer Purchase Order
Processing
High cost of manual data entry
Costly errors and delays
Reduced levels of customer satisfaction
Increases in staff overtime payments
Low adoption rates of your B2B e-commerce platform
33
Welcome to Conexiom
Automate sales order processing
Improve customer relationships
Process outside business hours
Reduce cycle times
Eliminate data entry errors
Key Takeaways• Why Field Sales Must Evolve
• The Future of Relationship Selling
• Sales Compensation Models for Millennials
• What Omnichannel Really Means for Distributors
Speakers
Mike MarksManaging PartnerIndian River Consulting Group
Jenel Stelton-HoltmeierEditor,Modern Distribution Management
©2017 Gale Media, Inc. All rights reserved.
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
6Your Speaker Today: Mike MarksIndian River Consulting Group has been providing business advisory services for 30 years• The focus has always been on market access which aligns investments
with real market growth opportunities
• Our relationship with MDM goes back over 25 years• The coolest stuff we have done we can’t talk about
Mike Marks is the Managing Partner• Co-founder of the firm, Senior NAW Research Fellow, Graduate
adjunct faculty at Texas A&M (past) and Purdue (current)
• Currently holds SCCA & PCA Competition Licenses, has a Medicare card andenjoys competitive shooting, fine tequila & cigars
We are building a digital tool kit for distributors, and Conexiom is a core part of the tool kit
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
7AGENDA
Why Field Sales Must Evolve
The Future of Relationship Selling
Sales Compensation Models for Millennials
What Omnichannel Really Means for Distributors
From Patrick Carrollhttps://www.linkedin.com/pulse/6-ways-evolve-modern-sales-pro-patrick-carroll/
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
8The Historical World ViewNothing happens until you sell something.Get them good lines to sell and product training.Sales reps then sell themselves first.Put them on a commission so they get to eat what they kill.Leave them alone with the right pay plan and they will manage themselves.When it doesn’t work, it is the pay plan, or bad lines, or pricing, or lazy reps, or the economy…They own the customer relationship, so hire from the competition to get their customers.
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The World View Is Now Dead BecauseOur customers are already different and changing rapidly.In mature territories, field sales cost is purely servicing and maintaining revenue, not market making, so incentives become fixed costs to serve.
Mature is defined by a same product repurchase rate percent > 90%Field sales cost as a percent of GP$ must decline with scale and specialization to counteract declining margins or improve EBITDA.
Buyers are changing!
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
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1. Protection: Ensuring that theyretain all of the flow business that isbought and not sold, avoiding CSEs
2. Interception: Capturing businesswhen a competitor CSE occurs
3. Disruption: Investing sales effort todisrupt a working sourcingrelationship, usually driven by aproduct or programs
3 Ways Sales Reps Create Demand with Their CustomersA good Critical Selling Event (CSE) happens to a customer and is created by a failure of a competitor distributor or a supplier of that
distributor, meaning it is an external event and outside the control of your sales rep
*Repurchases of identical product
The secret of share growth is to never experience a CSE yourself and intercept the CSEs of your competitors
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
11Specializing the Sales Generalist Lowers Overall Selling Costs
Category Role
FAMField Account
Manager
IAMInside Account
Manager
ISR- InboundInside Sales Rep
CSRCustomer/Counter
Service Rep
Technical Specialist
TelesalesOutbound
Typical Titles SAM, AM, TM, FSR, OSR
AM, IAM, Segment AM ISR, CSR CSR Many TMR, TSR
Primary SOS*
Business solutions and Relationship
Technical and transactional Transactional Technical Awareness
Customerassignment Yes, by dirt Yes, by dirt
or segment Yes, by dirt or segment No Periodically, by need or project
None but working off a call list
% in field >80%Own car
Partial with ashared car
<5%No car None >50%
Own car None
% CSEs intercepted >75% Ranges from
5% to 50% <5% 5% to 25% Sent out as they occur
CSE interception, RFM tickler
Customer Relationship Equity Role
Primary Primary Primary but often shared with Field Reps Supportive Subject Matter
Expert
None.They generate activity
that warrants the attention of a rep
CustomerCapacity ~30 ~100 Several hundred <200 ~30 Set changed
periodically
* Service Outputs Supplied to your customer - what they are actually buying
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The Sales Rep of the Futureor how Johnny Unitas lost Super Bowl III and the case for transparency
The company (a.k.a. marketing) takes responsibility for business development using the sales force as an offensive weapon to gain and preserve share.Gaining market dominance is not about selling stuff, rather it is about getting customers to choose you as their supplier of choice.
They are selling a value proposition – not productsScorecards are public and real time.• Performance discussions and best practice sharing become the norm.
Geo-location services drive everything.• Customer and market data is pushed to sales reps real time without asking. (Google the
term SoLoMo.)
• Everyone knows where the sales reps are – always.
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
13AGENDA
Why Field Sales Must Evolve
The Future of Relationship Selling
Sales Compensation Models for Millennials
What Omnichannel Really Means for Distributors
http://www.cambridgeblog.org/2015/12/the-future-of-online-relationships/
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
14How Distributor Sales Reps OperateDistributor sales reps in North America generate the vast majority (>80%) of their business (and income) from < 10 accounts.• 47.2% of a rep’s annual pay is variable and based on margin dollars. (Source: NAW)• Priority one for any distributor sales rep is defending what he or she already has.
They will NEVER jeopardize a big annuity account (never).Distributor sales reps must be perceived by the customer as adding value. 1. Being accountable (one butt to kick or “I’ve got your back!”)2. Being responsive (e.g. heroic recoveries – think crappy supply chains or hard to get product)3. Solving technical problems and/or introducing profit enhancing improvements
The above are typically referred to as “having a relationship.”Any time available outside of defensive selling is allocated based on:
Total customer opportunity (dollars not percentages) or intercepting an opportunity or the ease of finding a technical problem to solve or a profit enhancing improvement to introduce
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
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The Relationship will be with a Team Versus an IndividualCustomers are Changing How They Want to Buy
According to the U.S. Bureau of LaborStatistics, in 2012 the U.S. economy employed 4.5 million B2B salespeople. Forrester estimates that 1 million of those sales professionals, mostly what we call “Order Takers,” will lose their jobs to self-service e-commerce by 2020.
The field sales profession will simply evolve to fewer reps that manage significantly larger volumes enabled by significant support structures.
A successful rep is comfortable acting as the “point of the spear” and being a team member.
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
16AGENDA
Why Field Sales Must Evolve
The Future of Relationship Selling
Sales Compensation Models for Millennials
What Omnichannel Really Means for Distributors
https://unsplash.com/@andrewroblesphoto?utm_medium=referral&utm_campaign=photographer-
credit&utm_content=creditBadge
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17Purpose Eclipses Pay Just as you can’t manage a sales force with a compensation plan, you can’t attract millennials with a pay package.Typical critical job satisfaction drivers: • Purpose• Work-life balance• Professional development
This isn’t to say that compensation is not important, because it is, but non-pay factors carry much more weight among those 20 to 35 years old.
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
18Predictable Pay is KeyCompensation packages that include a high variable component are viewed negatively by Millennials.• Many Millennials are operating under crushing debt: Most college students graduate with close to
$20,000 in student loan debt.1
• Millennials now entering the workplace earn less than previous generations.1
• Millennials’ entry into the workforce has coincided with rapid increases in key living costs.Education, housing and health care costs have increasedrapidly over the last decade.1
Commission and draw is a non-starter, but a salary-and-bonus structure allowsmeaningful pay-for-performance.• Establish meaningful salary (70-80% of target pay)• Set GP$ goal with payouts starting at 70-80% achievement• Model to avoid unintended consequences
1 Fuse: Making Sense of the New Cogenerational Workplace™ byJim Finkelstein, Greenleaf Book Group Press
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$0 $500,000 $1,000,000 $1,500,000
Pay
GP$s
Salary and Bonus10% Commssion
80% of Goalor Plan
Salary
Bonus
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
19AGENDA
Why Field Sales Must Evolve
The Future of Relationship Selling
Sales Compensation Models for Millennials
What Omnichannel Really Means for Distributors
Markets and channels evolve with power constantly flowing downstream to the customer,
so the primary rules for channel design are:
1. It is not about you.2. It is about them.3. If confused, follow rules
one and two.
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
20Customer Life Cycle
Many firms know change is required but remain stuck because the reps own the accounts, so there are large risks as a major and complex change management
process is required.
The key concept is that field sales time investments (think sales calls) can be invested in alternate ways:Offensively: allocated based on opportunity for increase (right side)
ORDefensively: allocated based on existing volume (left side)
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21A Multichannel Example
4. Punchouts & LOOP*Inside sales leads with
specialistsYou have sticky customers
with reliable serviceField sales is on call, as necessary, by your team
3. Field Sales Leads
Expand share of wallet using team members and
introducing specialists along with special
services
1. TelemarketingE-catalog or Amazon
Easy to buy & “once and done”CSE alert
2. Field Sales Leads
Prospect with provided marketing analysis on cost to
grow and potential to grow
Your value proposition is explicit and key
* Lights Out OrderProcessing
What % of your sales calls are on the right side of the model?
2-9
Start♦
WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
22Your Actual Selling Process
The four discrete components are hard to discern as the intermingling hides inefficiencies in each core process and their respective costs as this is way that
“everyone does it.”
1. What is the process to acquire a new customer?2. What is the process to quickly gain appropriate share of their wallet?3. What is the process to cost effectively maintain that customer over their lifetime
with you?4. What is your process to extend life and reduce self-inflicted customer
departures?Each process has costs, tools, resources, performance metrics and
different objectives for the enterprise.
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Let Go of Selling Products and Instead Help Customers to Buy
Questions?
Sept. 22, 2017
Sponsored by:
The Changing Roleof Field Sales