Establishing and Managing a sales organization
26
SETTING UP AND MANAGING AN EFFECTIVE SALES FUNCTION PERSPECTIVE, EXPERIENCES AND BEST PRACTICES
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My view of setting up and making a sales organization more effective.
Transcript of Establishing and Managing a sales organization
SETTING UP AND MANAGING AN
EFFECTIVE SALES FUNCTIONPERSPECTIVE, EXPERIENCES AND BEST PRACTICES
DISCLAIMER
The thoughts that are represented are an amalgamation and sequencing of
multiple articles and publications on the web.
This is my view of how an organization attempting to setup a stronger sales
function should start looking at the problem. The dimensions laid out are based
on my experiences
These are at a level of abstraction that it should be applicable to most
organizations. However, I am told that these are more applicable to enterprise
sales than other models. I leave the decision up to you.
UNDERSTANDING WHAT MAKES SALES
SUCCEED
People
• Competency
• Incentives
• Structure
Processes
• Strategy
• Execution
• Metrics
Technology
• Enablement
• Communication
• Monitoring
COMPETENCY FRAMEWORKUNDERSTANDING WHY FOLKS SUCCEED IN DIFFERENT ENVIRONMENTS
Competencies
Knowledge – Cognitive
Skills –Physical
Behaviour -Qualitative
“Skills and abilities described in behavioral
terms that are observable, measurable, and
coachable and critical to successful
individual or corporate performance”
SAMPLE BEHAVIOURAL COMPETENCY
FRAMEWORK
Achievement
Orientation
Customer Service
OrientationImpact and Influence Initative
Interpersonal
Understanding
Wants to do job well Follows-Up
States intention but takes
no specific action
Address current
opportunities or problems
Understands either
emotions or content
Creates own measures of
excellence
Maintains clear
communciation
Takes a single action to
persuade Is decisieve in crisis
Understand both emotions
and content
Improves performance
Takes Personal
Responsibility
Takes multiple actions to
persuade
Proactive to short-term
impact Understands meanings
Sets and works to meet
challenging goals
Takes action for
Customers
Calculates impact of ones
action or words
Proactive to medium term
impact
Understands underlying
issues
Makes cost-benefit analysis
Addresses Underlying
Needs Uses indirect influence
Proactive to long-term
impact
Takes calculated
Entreprenurial Risks
Uses Long Term
Perspective
Uses complex influence
strategies
INCENTIVES
5 TYPES OF COMP PLANS
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1 2 3
4 5
STRUCTURE
CHANNEL MIX WOULD BE DETERMINED BY
YOUR BUSINESS MODEL / OFFERING
Customer Acquisition Costs
Determined by the channel mix employed (next slide)
Complexity of Sale
Number of stakeholders involved
Length of sales process
Product support requirements
Buyer integration requirements
Level of Customization
Budgeted vs. non-budgeted expenses
Level of buyer knowledge
1000
600
500
150
120
50
20
0 200 400 600 800 1000 1200
Field Sales Force
Value Added Partners
Volume Distributors
Telesales - High
Internet - High
Telesales - Low
Internet - Low
Cost
UNDERSTANDING CUSTOMER ACQUISITION
COSTS
Inside
SalesHybrid Field Sales
Pricing Low Medium High
Sales
ComplexityLow Medium High
Product
NoveltyLow Medium High
Sales Cycle Short Medium Long
Sales Budget Low Medium High
Language
BarrierLow Medium High
Early Growth
StageLow Medium High
# of
stakeholder
involved in
decision
Less Medium > 3
Level of
buyer
knowledgeHigh Medium Low
SALES FORCE SPECIALIZATION CONTINUUM
Some specialization
of selling activities,
products, and/or
customers
All selling activities
and all products to
all customers
Generalists
Certain selling activities for
certain products for certain
customers
Specialists
GEOGRAPHIC VS PRODUCT ALIGNED SALES
FORCES
Organizational
Structure
Advantages Disadvantages
Geographic • Low Cost
• No geographic duplication
• No customer duplication
• Fewer management levels
• Limited specialization
• Lack of management
control over product or
customer emphasis
Product • Salespeople become
experts in product attr. &
applications
• Management control over
selling effort
• High cost
• Geographic duplication
• Customer duplication
MARKET VS FUNCTIONAL ALIGNED SALES
FORCES
Organizational
Structure
Advantages Disadvantages
Market • Salespeople develop
better understanding of
unique customer needs
• Management control over
selling allocated to
different markets
• High cost
• Geographic duplication
Functional • Efficiency in performing
selling activities
• Geographic duplication
• Customer duplication
• Need for coordination
UNDERSTANDING WHAT MAKES SALES
SUCCEED
People
• Competency
• Incentives
• Structure
Processes
• Strategy
• Execution
• Monitoring
Technology
• Enablement
• Communication
• Monitoring
THE SALES PROCESS
UNDERSTANDING THE SALES FUNNEL IS
ESSENTIAL TO RUN EFFECTIVE SALES FUNCTION
How do prospects enter each
stage ?
Why do they enter / leave?
Who is tasked with interactions
at each stage
What do I need to do to
improve throughput ?
WE ALSO NEED TO UNDERSTAND HOW
CUSTOMERS BUY….
Non-performance
Issue Identification
Diagnosis PrognosisProject
Implementation
Success & Improved Results
• How do you make a buying decision in your current organization?
• How did you make a buying decision in your previous organization?
Factors
Criteria
Issues Benefits
Makers
Situation Politics
Funding
ROI Pricing
Timing
Events Reporting
THE SALES PROCESS
Lead Generation
Lead Qualification
Relation Building
Solution Design & Propose
Negotiate & Close
• Understand the sales process
• What is common
• How things differ by the offering
• How thing differ across developing and developed markets
• Understand some best practices
• Evaluate what meets the requirement of your organization
LEAD GENERATION
Website
Blogs
Whitepapers
Industry Magazines
Publish
Speaker in Industry Conference
Social Media
Online- Ads
SEO
Promote
Emails
Cold-Calls
Road Shows
Referrals
Social Media
Connect
Decision Factors
Solution Specificity ( Broad Based, vs Specific)
Cost of Ownership ( Low vs High)
Time to Benefit Realization ( Low vs High)
Cultural Nuances ( Credit vs Cash)
LEAD QUALIFICATION
Establish Criteria
Evaluate Lead / Assign Score
Act
Review
“B2B marketers who emphasize lead volume over lead quality reduce sales efficiency, increase campaign costs, and fuel the gap between sales and marketing. To generate qualified demand, marketers need technology and processes that capture lead quality information; validate, score, and classify leads; develop programs to nurture leads that don’t yet warrant sales attention; and define metrics that directly identify marketing’s contribution to the sales pipeline and closed leads.” Laura Ramos at Forrester Research
Pursue Drop Nurture
LEAD QUALIFICATION
Dropping
Dropping bad leads can help save time, effort and money.
Nurture
Sales reps dedicate 14% of their time to lead development, but only 6.3% of leads are utilized (Source Sirius Decisions)
An effective lead nurture program can improve customer acquisition by almost 30%.
On average, organizations that nurture their leads experience a 45% lift in lead generation ROI over those organizations that do not (Source Marketing Sherpa)
Establish Criteria
Evaluate Lead / Assign Score
Act
Review
Pursue Drop Nurture
RELATIONSHIP BUILDING
Techniques viz. SPIN, SCQA
Understand
Criteria
Issues Benefits
Makers
Situation Politics
Funding
ROI Pricing
Timing
Events Reporting
SOLUTION DESIGN & PROPOSE
Seller Profile
SPIN (Situation/Problem/Implication/Need
Payoff)
FAB (Features-Advantages-Benefits)
Financial analysis/spreadsheet
Persuasiveness
UNDERSTAND “DAY-IN-THE-LIFE” TO IDENTIFY
PROCESS MODIFICATIONS
Sales Reps
Planning,
10%
Waiting, 29%
Admin &
Meetings, 25%
Travelling,
20%
Face-to-face,
16%
Sales Management
Coaching, 30%
Admin, 21%Meetings &
Conf, 16%
Travel, 16%
Analysis, 6%
Acct Mgmt, 5%
Performance
Mgmt, 3% Hiring, 3%
REFERENCES
www.google.com
Predictable Revenue: Turn Your Business Into a Sales Machine with the $100
Million Best Practices of Salesforce.com by Aaron Ross
The Pyramid Principle: Logic in Writing and Thinking by Barbara Minto
