Sales Management
The articles below deal with reducing costs and increasing revenues, a hot topic in today’s environment. All three articles focus on how to improve sales models to reduce costs and increase efficiency. The main elements considered are identifying the true needs “sweet-‐spot” of clients, creating a clear and concise sales structure, and finally reaching the right balance between back-‐office support, and front office sales time.
1. This article by Bain & Company numerated a few demand-‐side factors that accounts for the increasing complexity of sales models and suggested four mutually reinforcing actions that can help firms restructure a sales model for these new realities. The shape of demand has changed in many industries: buyers increasingly demand a tailored solution anchored in expertise about their industry or a specific function; customers expect providers to help solve their business problems; customers have become more
experienced and informed with competitive, disciplined bid processes. As a result, offerings have shifted from single-‐product to multi-‐product portfolios; product-‐based sales have been supplemented by sales of solutions that knit together disparate products into an integrated offering; transactional selling based on knowledge of product features has become less relevant than consultative selling that’s tailored to the customer’s business situation. To adapt to these changes, firms can restructure their sales models by taking the four actions: 1. Identify customer sweet spots and define the appropriate offering, then put a repeatable process in place to expand to other segments; 2. Find the right specialists who possess solid knowledge of the target’s business problems, and bring them into the sales effort when their participation will be most effective; 3. Ensure that everyone in the sales organization focus on attaining well-‐defined business goals and growth targets; 4. Equip the back office to allow sales representatives to spend more time selling . http://www.bain.com/publications/articles/is-‐complexity-‐killing-‐your-‐sales-‐model.aspx
2. This article by Boston Consulting Group sheds light on how to enhance sales force effectiveness. According to the authors, when looking for opportunities for improvement and transformation, companies should analyze the five key components of selling, understand where the critical areas for improvement are, and target
those with the biggest upside potential. The five key areas are: 1) targeting: define a clear sales strategy and goals, understanding the markets and prioritizing the customer accounts with the highest value; 2) deploying: direct sales resources to opportunities with the biggest payback where multiple factors, such as products, customers, competition, geographies, channels, and industries, must be matched against numbers and types of resources; 3) executing: increase face time with key customers by spending less time on low-‐value administrative tasks; 4) engaging: make customer interactions more productive by exploring the full range of customer needs, taking advantage of every cross-‐selling opportunity, and finding out if and where price sensitivities exist; 5) enabling: find the right balance between sales support and cost by evaluating sales coaching and management, software tools, training programs, support manuals and brochures, incentives and compensation packages. https://www.bcgperspectives.com/content/articles/sales_channels_growth_jump_start_growth_s harpening_sales_force_focus/
3. In the current economy companies want to lower costs. Two main mistakes that occur in this process, according to Mckinsey, is that they cut directly from the back-‐office or cut across the board non-‐discriminately. Such cuts could lead to salespeople doing back-‐office work and thus neglecting their clients. This may hurt investments and client perception. Mckinsey recommends that the companies should examine the costumer portfolio and see what the client truly needs. They should take into consideration the profitability of the deal, not only the size, ie, they should look at the real profit margins. The key is for the cuts to be systematic. Examples would be to change from face-‐to-‐face sales to telesales, because this would free up time and allocation more attention to smaller clients. They also recommend centralized sales cycles in order to lessen preparation time. Finally, they recommend a careful consideration of post-‐sale inefficiencies. This would eliminate inefficiencies in the time management of salespeople, which would cut costs and hopefully increase revenues without the need or large personnel cuts. http://www.mckinsey.com/insights/marketing_sales/cutting_sales_costs_not_revenues
In this day and age simply cutting personnel is not going to be enough to efficiently lower costs. Due to the fierce competition the companies need to analyse in greater depth what their products are and how they are managing their sale. It is not merely about sending salespeople out into the market, a structure needs to be present and a well-‐defined product must be sold. If the system isn't in place then the revenue will not change.