Transcript 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?
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$800 BN VS $200 BN
120 VS GREATER THAN 500
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OBJECTIVE
 Identify some general trends in sales force
management
 How are companies trying to deal with
generating growth using the sales force.
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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
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© 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
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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
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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
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2. FACE TO FACE SELLING?
PAST
PRESENT
Transactional
selling
Transactional
selling
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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
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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
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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
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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
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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
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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
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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?
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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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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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
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© 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
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© 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
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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
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© Vlerick Business School
Prof Dr Deva Rangarajan
THANK YOU!
[email protected]