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5 Strategies for Profitable Growth in 2012
 

5 Strategies for Profitable Growth in 2012

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    5 Strategies for Profitable Growth in 2012 5 Strategies for Profitable Growth in 2012 Presentation Transcript

    • 5 Strategies for Profitable GrowthInsights from the 2011 Chief Sales Executive Forum Atlanta | Chicago | San Francisco | Scottsdale | Stamford
    • Where’s your revenue growth going to come from? Median Expected 10% Growth Rate* vs. 3% Global GDP Growth** Source: 2012 AGI Sales Pulse Survey* (in process), The Conference Board Global Economic Outlook 2012**© 2011 The Alexander Group, Inc.® 2
    • 5 Strategies for Profitable Growth in 20121 Increase the Intellectual Capital of Field Sales2 Invest in Relationships with Top Customers3 Evaluate the Mix of Generalist and Michael Orrick SVP, Thomson Reuters Specialist Resources “I now see people are talking a4 lot more about selective Develop the First Line Sales Manager opportunities. After that it’s really down to your investment5 Capitalize on Growth in Emerging and what you can expect in Markets return.”© 2011 The Alexander Group, Inc.® 3
    • 1 Increase the Intellectual Capital of Field Sales The Challenge: Customers expect today’s sales rep to be an “expert” who can deliver value to them and their business. Traditional product or even solution-focused reps are being replaced by the “knowledge worker” who can develop an intimate relationship with the customer through non-traditional means. Dr. Chris Boorman SVP, Informatica Top reps understand how to use Can a traditional field sales rep gain the necessary productivity tools to reduce technical skills and administrative time and gain a business acumen to better understanding of their succeed in this new selling customers through LinkedIn and environment? other social media platforms.” © 2011 The Alexander Group, Inc.® 4
    • 1 Who is the Sales Rep of the Future? “Tell me, Mr. Customer. What keeps you up at night?” “I know what keeps you up at night. And let me tell you what others have done to fix the same problem.” Sales Person Knowledge Worker Product / Solution Expert Able to Think Strategically Builds Relationships with End- Strong Business Acumen Users (not C-Suite) Works with Other Functions to Provide Value to Customers © 2011 The Alexander Group, Inc.® 5
    • 1 We Segment Customers…Why not our Sales Force? Sales Complexity Low Complexity / Value High Complexity / Value Intricate Product Complexity Value Volume Selling Selling Transaction Selling Simple Only 10-15% of Sellers Make the Move to Value Selling © 2011 The Alexander Group, Inc.® 6
    • 1 Getting the Right Person into the Right Role “We looked at the characteristics of our best and worst performers and built an assessment profile Training for potential hires based on that analysis…A lot of our tenured reps said they didn’t think they would make the cut today.” Hiring Profiles Chris Ancell, CenturyLink talking about the additional rigor applied to his recent sales force expansion. Job Design Top Performer Analysis © 2011 The Alexander Group, Inc.® 7
    • 1 Measuring on Customer Behaviors, not just Sales Transaction / Volume Selling Value Selling Focus on Total Revenue Focus on Source of Revenue  Total Revenue  Complexity of Sales Revenue by product, geography Increased bundling, number of  Quota Attainment products / order % Reps above quota, overall  Sale Orders performance to goal Average order value, increased  Sale Orders sales cycle velocity, increased Average order value account value  Customer Satisfaction  Strategic Value of Accounts CSAT scores Total wallet spend, increase or decrease C-suite engagement  Customer Satisfaction Customer commitment, greater dependency on relationships © 2011 The Alexander Group, Inc.® 8
    • 2 Invest in Relationships with Top Customers The Challenge: With increasing pressure for profitable growth, companies may place more emphasis on new sources of revenue, instead of deepening relationships with existing customers. Keeping the right level of attention on the Rich Geraffo care and feeding of SVP & Managing Director, HP the top of the pyramid. “We found that the cost of sales to acquire new customers was far higher than cross-selling to our existing customers. We created a program to focus on our top 1000 customers.” © 2011 The Alexander Group, Inc.® 9
    • 2 Driving Results with Strategic Accounts of companies expect their main growth area in 52% 2012 to be cross-selling to and retaining their larger national and global customers.* What strategies are companies using to develop a more intimate relationship with their strategic customers? Source: 2012 AGI Sales Pulse Survey* (in process), © 2011 The Alexander Group, Inc.® 10
    • 2 Ideas for Deepening Key Customer Relationships Get Customers Involved in the Hiring Process Ask buyers from your largest accounts what their ideal rep looks like and involve them in the hiring process for account managers. Beef Up (or Start) Your Executive Sponsor Program Assign a set of accounts to each person on your Executive Management team. Provide them with training for interfacing with customers and resolving their issues. Provide a Single Point of Contact (Your Account Manager) Particularly if you have a large product portfolio, providing an integrated experience to your customer with a Strategic Account Manager can help deepen top relationships and uncover additional opportunities for cross-selling. © 2011 The Alexander Group, Inc.® 11
    • 2 Global Account Programs Require Long-Term Investment and Continuous Improvement Potential Medium & Short-Term Costs Long Term Benefits Average Margin Cross Sell & Incremental Revenue Long Term Return on Customer Investment Internal Satisfaction & Confusion Revenue Retention Greater Revenue Sales Expenses Outside Home Market Best-in-class Global Account Programs:  Are not executed perfectly the first time  Are viewed as long-term investments  When executed well, yield positive ROI in the medium and long term © 2011 The Alexander Group, Inc.® 12
    • 2 Best in Class Global Accounts Programs Program Rationale • Globally active accounts are a large share of current revenue and expect seamless support from suppliers & partners. • These accounts are actively looking to limit suppliers / partners to those who can efficiently meet their complex needs. Program is Globally Managed • Funded at global level and GAMs often report to a global program leader. • IT systems support global reporting and program management. • Job roles, training, recruitment & compensation are globally consistent . GAM “Teams” Execute Coverage Strategy • GAMs often directly manage other sellers and have access to dedicated support resources globally. • Regional sales & support resources are closely aligned to GAM program through explicit processes, engagement rules and incentive compensation. Senior Leadership Supports & Monitors Program • GAM strategy is developed, monitored and actively supported by top Executives (CEO, CFO, COO). • Regional and Global leaders are often assigned to specific accounts and partner with Global Account Managers to deepen account relationships. © 2011 The Alexander Group, Inc.® 13
    • 3 Evaluate Mix of Generalist and Specialist Resources The Challenge: With M&A activity accelerating, companies need to have a coherent strategy for on-boarding new products into the sales portfolio, while maintaining a uniform customer experience. Optimizing the mix of generalist and specialists reps requires an understanding of rep bandwidth, customer buying preferences, and expected cost of Bob Guidotti sales. VP WW Software Sales Strategy & Transformation, IBM “You need to be able to measure the contribution of specialty reps to the business. If you can’t The Territory Product measure them, you might want to Rep Specialists Talk about individual think about getting rid of them.” All things to all customers products / offerings © 2011 The Alexander Group, Inc.® 14
    • 3 Five Reasons to Use Specialist Resources Fill a skill set gap. Specialty reps can focus on driving revenue for new 1 products, new markets, or types of customer relationships where you’re seeking a deeper competitive advantage. Optimize rep capacity. A single rep can only handle a certain level of 2 technical information. Spreading knowledge across specialists can help facilitate the right level of discussion with a technical buyer. Handle difficult customer situations. Use experts with elevated positions in 3 a particular industry to win-over skeptics in tough situations. For example, a former General can talk to an ex-officer to help smooth over a relationship. Play the “bad cop”. In the software industry, contract compliance is a big 4 issue. Having a separate team for compliance negotiations allow the account manager to act as “good cop” and keep a safe distance. Help with deal progression. Having a specialist team for financing can be 5 helpful when negotiations get serious. The client team may not push back as hard since they are responsible for the long-term relationship. © 2011 The Alexander Group, Inc.® 15
    • 3 The Generalist – Specialist Evolution The Territory Product Quarterback + Product Quarterback + Solution Rep Specialists Specialists Specialists All things to all Talk about individual Manage customer Manage customer customers products / offerings relationships and coordinate relationships and coordinate product expertise solution expertise One person Single person More seamless Sales process can handle cannot handle coordination of involves fewer customer and knowledge of customer resources products all products experience Introduce new No Single Point “8-legged” sales products of Contact call © 2011 The Alexander Group, Inc.® 16
    • 3 Deciding When and How to Specialize The similarity of buyers, products, and rep capacity all factor into the decision to use specialists resources. A Do the resources call on the No same point of contact? Yes Add Discrete Separate Force B Are the products sold by the resources unrelated or Unrelated related? Related C Add Specialized Does selling both products require knowledge beyond the Yes Overlay capacity of the current sales Resources resource? No Use Current Sales Force Use Current Sales Force © 2011 The Alexander Group, Inc.® 17
    • 3 Balancing Specialization and Business Acumen How much product knowledge is “table stakes” even for a generalist role? How do you balance product vs. business knowledge? Overlay Product Stand- Specialist alone Not enough Product Knowledge Product bandwidth Specialist Territory Rep Low value Named Account resource Manager Business Acumen 18 © 2011 The Alexander Group, Inc.® 18
    • 3 Customer Preference Influences Sales Model Choice Oncologist Time with Sales Rep (Minutes) Customer preference may inform how you decide to Average Minutes Per Interaction specialize your sales team. 11.3 10.6 10.3 For example, we asked 9.3 doctors how much time they would spend with a drug rep based on a series of rep profiles. Doctors said they would spend 22% more time with specialist resources Product Specialist Tumor Specialist Product Specialist Account Manager with additional knowledge with compared to an Account Reimbursement Manager. Expertise Source: AGI study with 100 community oncologists 19 © 2011 The Alexander Group, Inc.® 19
    • 4 Develop the First Line Sales Manager The Challenge: Linda Mahoney First line sales managers are often tasked with the Vice President impossible: being a “super-seller” for key accounts, Alexander Group hitting their number, managing and developing their team, all while logging the required number of “field days”. Most sales initiatives focus on enabling reps. By “Our recent conversations with investing in FLSMs, you can have a cascading impact on the entire sales organization. Executives in the Pharmaceutical industry show a real focus on Where should you developing “business acumen” in focus your First Line their sales reps. We feel like the Sales Managers to success of this transformation is have the biggest going to rest on the shoulders of impact? the first line sales manager.” © 2011 The Alexander Group, Inc.® 20
    • 4 Coaching: A Major Component of the FLSM Role First Line Sales Manager Time Allocation First Line Sales Medical Products Company Managers typically spend more than 1 High performers spent almost 2x as much day per week time on coaching as 16% coaching their other managers. 15% 13% teams. 9% 9% 9% 8% 6% 6% 7% AGI Best Practice: At least 30% of time 2% spent on coaching. 1. 2.Identifying the Territory/ 3. Relationship 4a. Customer 4b. Back- 5. Order 6. Order 7. Customer 8. Administration 9. Travel 10. Coaching and This can include rideRight Targets/ AccountOpportunities Planning Development Persuasion Office Activities Management Complications Manage- ment and Reporting Training alongs, account reviews, and regular Pre-Sales Engaged Selling Time Low Value Activity Time Sales Facilitation Benchmark Average High Performers = performance Core Performers = Low Performers = reviews. © 2011 The Alexander Group, Inc.® 21
    • 4 First Line Sales Manager Competencies Direct account responsibility for key Actively monitoring business trends accounts in the FLSM’s territory. and competitive influences in These could be accounts that the territory. Applying an span multiple rep territories analytical approach to and require more senior managing the business presence and authority and identifying and to act. Account Business executing strategies Coverage Management for growth. Field Sales Administrative Help reps to develop Coaching Tasks Even with territory plans and analyze improvements in opportunities within their technology, administrative territory. Help reps align sales tasks like recruiting, on- resources and coverage to the boarding, and approving right influence points in an account. expenses are an expectation. © 2011 The Alexander Group, Inc.® 22
    • 4 Common FLSM Behaviors to Avoid The Super-Seller The Signs Organizational Change High percent of time on sales calls • Institute regular pipeline reviews for the with customers, with more focus on entire team to ensure equal focus. personally closing deal than • Provide training to help super-sellers mentoring reps through the process. move from “doers” to “coaches”. The Micro-Manager The Signs Organizational Change High percent of time on coaching, • Help micro-managers focus on the big without producing results. Low picture by pruning back reporting effectiveness scores and high admin expectations for their sales teams. time by reps. The “Everything Goes” Manager The Signs Organizational Change Variable performance by sales team • Sales playbooks and coaching and lack of consistency in territory materials to help managers focus their management and call planning. team on the “right” customers and activities. © 2011 The Alexander Group, Inc.® 23
    • 5 Capitalize on Growth in Emerging Markets The Challenge: Low GDP growth and high market share in mature markets such as the US and Europe has many companies looking for opportunities both in the BRIC countries and other emerging economies. Paul Mountford SVP Global Enterprise Cisco “You’ve got to adapt. Holding onto a legacy product or system isn’t going to lead to growth. You How can you select the right sales need to be willing to go into coverage to take advantage of rapid spaces where the market is growth in emerging economies? going.” © 2011 The Alexander Group, Inc.® 24
    • 5 Sales Complexity Evolves with Market Development Expected Revenue Nascent Emerging Mature Small team wears many Separate teams for Sales Separate sales teams for hats (BD, Marketing, and Marketing different market segments Sales) Shared resources across Resources dedicated to Heavy reliance on accounts individual accounts established partners Still have strong reliance on More influence to drive partners partner relationships © 2011 The Alexander Group, Inc.® 25
    • 5 Cisco’s Emerging Markets Strategy Outcome Profitably Grew Emerging Business from $1.5B to $5.5B in 5 years SHORT 10-15% growth from coverage. TERM Hire people in target countries. Strategy Focus on 17 out of 132 Develop Replicable Business emerging countries MID Models that apply to similar types TERM of economies (e.g. energy markets) Investment • Grew headcount from LONG Country Transformation. Build 800 to 2000+ vision with heads of government in • Doubled number of TERM top 17 emerging countries. SMB partners • Opened 11 in-country offices © 2011 The Alexander Group, Inc.® 26
    • 5 Considerations for Investing in Emerging Markets Hire Local Importance of having in-country talent is critical. And be willing to invest, the lack of experts can drive up compensation costs. Have a Long Term Strategy Show governments and national business players that you’re prepared to make a long-term commitment. Thinking about investing in high-growth emerging markets? Follow the Money Here’s what Cisco learned. You’re going to chase some white elephants, but limit wasted deal cycles by ensuring that funding is really available. © 2011 The Alexander Group, Inc.® 27
    • Join us at The BreakersOctober 24-26th for the2012 Chief Sales Executive ForumKeep the Conversation GoingJoin the Chief Sales Executive LinkedIn Groupto discuss challenges facing sales leaders.Learn More About AGIVisit our website to find out whyclients enjoy working with us.Get in touch with AGI.