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Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
Designing the Customer-Focused Sales Organization
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Designing the Customer-Focused Sales Organization

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presented by Rob Bentley and Paul Reiman of Hewitt Associates at the TrueConnection 2008 Sales Performance Management Conference, hosted by Callidus Software

presented by Rob Bentley and Paul Reiman of Hewitt Associates at the TrueConnection 2008 Sales Performance Management Conference, hosted by Callidus Software

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    • 1. Designing the Customer-Focused Sales Organization Callidus TrueConnection October 13, 2008 Paul Reiman [email_address] (847) 442-3547 Rob Bentley [email_address] (847) 442-2673 To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC .
    • 2. Agenda <ul><ul><li>Introductions </li></ul></ul><ul><ul><li>Problem Statement </li></ul></ul><ul><ul><li>Solution Requirements </li></ul></ul><ul><ul><li>Five Step Process </li></ul></ul><ul><ul><li>Q&A </li></ul></ul>
    • 3. About Us <ul><ul><li>Senior Consultant, based in Lincolnshire, IL </li></ul></ul><ul><ul><li>~13 years w/ Hewitt </li></ul></ul><ul><ul><li>Insurance/financial services, consumer products, technology </li></ul></ul>Paul Rob <ul><ul><li>Senior Consultant, based in Lincolnshire, IL </li></ul></ul><ul><ul><li>1 year w/ Hewitt; ~10 yrs total </li></ul></ul><ul><ul><li>Technology, communications, media, retail, services </li></ul></ul>
    • 4. About You #1 <ul><li>Your Role </li></ul><ul><ul><li>Sales Management or Sales Operations? </li></ul></ul><ul><ul><li>Human Resources or Finance? </li></ul></ul><ul><ul><li>Feeling left out because you were none of the above? </li></ul></ul>
    • 5. About You #2 <ul><li>Your Company </li></ul><ul><ul><li>In a business that sells primarily to other business? </li></ul></ul><ul><ul><li>In a business that sells primarily to consumers? </li></ul></ul><ul><ul><li>In a business that is balanced across business and consumers? </li></ul></ul><ul><ul><li>Communications Services? </li></ul></ul><ul><ul><li>Technology? </li></ul></ul><ul><ul><li>Financial Services? </li></ul></ul><ul><ul><li>Feeling left out this time? </li></ul></ul>
    • 6. About You #3 <ul><li>Your Perception of the Economic Climate </li></ul><ul><ul><li>This is a scary economic climate, and a time to be conservative in making changes to the sales force </li></ul></ul><ul><ul><li>This is a scary economic climate, which provides a unique opportunity to make changes in the sales force </li></ul></ul><ul><ul><li>The economy isn’t the issue… but still I’m inclined to be conservative at this time in making changes to the sales force </li></ul></ul><ul><ul><li>The economy isn’t an issue… and now is as good a time as any to be making changes to the sales force </li></ul></ul>
    • 7. The Question: Customer-Focused = Sales Performance?
    • 8. Problem Statement <ul><ul><li>“ Sales Performance Management” often becomes “sell more” </li></ul></ul><ul><ul><li>Of course the business needs to demonstrate sales productivity, but this need must be balanced </li></ul></ul><ul><ul><li>If not properly balanced, dysfunctional sales behaviors and sub-optimal customer interactions can occur </li></ul></ul>
    • 9. Problem Statement continued
    • 10. Ideal State: Aligning the Interests of Key Stakeholders Rewards and Career Development Performance and Productivity Sales Force Company Customers Aligned Selling and Service Process Customer Focused Sales Effectiveness Mutually Valuable, Magnetic Relationships
    • 11. Solution Requirements: Aligning for Impact Performance and Rewards Talent Management Organization Design Effective and Efficient Right Talent, Right Job, Right Time Productive and Engaged Hewitt Sales Performance Model Align the Sales Force Customer Insight Business Strategies Value Proposition Market Dynamics Understand Business Drivers Internal Business Impact Satisfied, Loyal Customers – Resistant to Competitive Threats
    • 12. Five Step Process  Know What the Customer Values  Translate Customer Values Into an Effective Coverage Model  Link Talent Management to Customer Value  Ensure Rewards Support Alignment  Track the Impact
    • 13. Case Example Background: CleanMe Corp <ul><ul><li>Provider of health care sterilization capital equipment, consumable materials, and hand hygiene supplies </li></ul></ul><ul><ul><li>Part of a broader healthcare equipment and services company </li></ul></ul><ul><ul><li>Roots are in a certain type of sterilization in which buying the equipment required using the related consumable material </li></ul></ul><ul><ul><li>Historical expansion through both organic development and acquisitions, with more new products coming </li></ul></ul><ul><ul><li>Slowing growth across product lines </li></ul></ul><ul><ul><li>Declining sales force engagement </li></ul></ul>
    • 14. Case Example Background: FixItSoft <ul><ul><li>Provider of software that drives efficiencies in IT network management </li></ul></ul><ul><ul><li>Small unit within a well-known, global technology brand </li></ul></ul><ul><ul><li>Founded on and grew through a technology for communications networks, now re-centering into the broader enterprise business space </li></ul></ul><ul><ul><li>Recent acquisition of a IT service desk product line </li></ul></ul><ul><ul><li>Sales productivity trailing industry benchmarks and internal goals </li></ul></ul><ul><ul><li>Growth rate strong, but no faster than the market as a whole </li></ul></ul>
    • 15. Step 1: Know What the Customer Values  Translate Customer Values Into an Effective Coverage Model  Link Talent Management to Customer Value  Ensure Rewards Support Alignment  Track the Impact  Know What the Customer Values
    • 16. Step 1: Three Sub-Steps <ul><ul><li>Define “the customer” and any segmentation that will affect the customer’s expectations of the sales force </li></ul></ul><ul><ul><li>Create a process to articulate the voice of the customer </li></ul></ul><ul><ul><li>Ask about what creates value for customers during their buying process, and how your performance compares to others </li></ul></ul>
    • 17. Who is the Customer? <ul><li>For this purpose, define the “customer” as: </li></ul><ul><li>Any individual within an account who has a material impact on the decision to buy from you versus a competitor </li></ul><ul><li>As such, this may include: </li></ul><ul><ul><li>True Economic Buyers </li></ul></ul><ul><ul><li>Influencers / Gatekeepers </li></ul></ul><ul><ul><li>Users / Technical Buyers </li></ul></ul>
    • 18. Segmenting the Customer Base <ul><li>Key Questions: </li></ul><ul><ul><li>Who buys our products/services in a different way? </li></ul></ul><ul><ul><ul><li>Example: Federal Government vs. Large Businesses </li></ul></ul></ul><ul><ul><ul><li>Example: Telephone vs. Face-to-Face </li></ul></ul></ul><ul><ul><li>Who uses our products/services in a different way? </li></ul></ul><ul><ul><ul><li>Example: Home Office vs. Family/Entertainment </li></ul></ul></ul><ul><ul><li>Who has a different type of relationship with us? </li></ul></ul><ul><ul><ul><li>Example: New Accounts vs. Long-Standing Relationships </li></ul></ul></ul><ul><ul><ul><li>Example: Multi-Product vs. Single-Product </li></ul></ul></ul>
    • 19. Gathering the Voice of the Customer <ul><ul><li>Buyer Role </li></ul></ul><ul><ul><li>Background </li></ul></ul>Know the Audience Determine Topics and Scale Develop Process <ul><ul><li>How: Media/Vehicles </li></ul></ul><ul><ul><li>When: Sampling and Frequency </li></ul></ul><ul><ul><li>Who: Use of Third-Party </li></ul></ul><ul><ul><li>Focus on Being Actionable </li></ul></ul><ul><ul><li>Make it Possible to Progress </li></ul></ul>
    • 20. Example: Customer Buying Value Matrix Relative Value in Purchasing Decision Relative Effectiveness Worse Than Other Providers Better Than Other Providers Less Value More Value Value Gaps to Monitor and Manage Comparative Advantage to Exploit Value Gaps to Address Comparative Advantage to Consider Leverage Providing access to solution experts Communicating the business value Articulating the future roadmap Responsiveness of sales resources Demonstrating features and functionality Understanding the solution requirements Providing a single integrated solution Providing a solution that integrates with my existing infrastructure Initial investment
    • 21. New Insights: CleanMe Corp <ul><li>The sales force was over-delivering in certain areas, and under-delivering in others – particularly in consumables </li></ul>Relative Value in Purchasing Decision Relative Effectiveness Worse Than Other Providers Better Than Other Providers Less Value More Value Value Gaps to Monitor and Manage Comparative Advantage to Exploit Value Gaps to Address Comparative Advantage to Consider Leverage Solution Development New capital Replace Capital Consumable Planning / Management Planning / Management Solution Development Solution Development Features / Benefits Features / Benefits Features / Benefits Application Knowledge Planning / Management Contracting / Fulfillment Application Knowledge Application Knowledge
    • 22. New Insights: FixItSoft Infrastructure Management Service Management Frequency <ul><li>Pain-driven </li></ul><ul><li>Based on company size/growth </li></ul><ul><li>Consider replacing / upgrade every 3-5 years </li></ul>Funding / Budgeting <ul><li>Standard budget item </li></ul><ul><li>Specific projects owned below Officer level, allocated as needed </li></ul><ul><li>Appropriated in advance as an infrequent capital purchase </li></ul><ul><li>Owned at Officer level </li></ul>Cycle <ul><li>4-6 months </li></ul><ul><li>6 months, once decision is made to invest </li></ul>Buyer Roles <ul><li>Selection driven by a technical network team who will recommend to business buyers </li></ul><ul><li>Selection driven by the Service Desk </li></ul><ul><li>Business buyers participate earlier in the process </li></ul>
    • 23. Step 2: Translate Customer Values Into An Effective Coverage Model  Know What the Customer Values  Translate Customer Values Into an Effective Coverage Model  Link Talent Management to Customer Value  Ensure Rewards Support Alignment  Track the Impact
    • 24. Translate Customer Values Into An Effective Coverage Model
    • 25. Sales Coverage Myths—and Realities “ Customers will always demand a single account manager.” Myth Reality <ul><li>“ Single point of contact” does not always mean one person for all customer contacts </li></ul><ul><li>Accountability is what customers need… and that can be created and clarified with multiple selling resources </li></ul><ul><li>Many customers place tremendous value on having access to both generalists and specialists in order to provide depth of understanding on specific product/service needs </li></ul>
    • 26. Sales Coverage Myths—and Realities “ A ‘Hunter/Farmer’ sales model is an inward-looking strategy that customers dislike.” Myth Reality <ul><li>Ultimately, customers will demand a resource that is appropriately focused on them as a customer </li></ul><ul><li>Account management is a different skill set that creates customer value when appropriately focused </li></ul><ul><li>Process modifications can make the transition relatively seamless to the customer </li></ul>
    • 27. Sales Coverage Myths—and Realities “ Customers will call their sales rep when they have a problem, so our coverage model will always be strained by a lack of selling time” Myth Reality <ul><li>A sales rep may be the right initial point of contact, and thus likely needs to be the final point of contact as well </li></ul><ul><li>In between, however, customers will generally respect efforts to connect them with the right resources to solve their problems </li></ul>“ With today’s technology, customers don’t need someone local to interface with them.” <ul><li>The demographics of your buyers may not fully embrace communications technologies </li></ul><ul><li>Certain cultures demand a local relationship in order to do business </li></ul><ul><li>There is always a local competitor </li></ul>
    • 28. Coverage Model: CleanMe Corp Customer Value <ul><li>Need appropriate expertise in both the capital buying phase and the ongoing consumable materials fulfillment </li></ul>Solution <ul><li>Split the job role into a capital sales role and a consumable sales role </li></ul><ul><li>Create processes and rewards to ensure integration and customer accountability </li></ul>Gap <ul><li>Generalist job role tended to overemphasize capital cycles, due to big ticket prices and less routine “cadence” </li></ul><ul><li>Resulted in lack of knowledge on consumable materials </li></ul>
    • 29. Coverage Model: FixItSoft Customer Value <ul><li>Different buying centers within a customer for the IT Network Management and Service Management products </li></ul><ul><li>Network Management tends to have both a deep technical buyer as well as a “business” buyer </li></ul>Solution <ul><li>Take a more measured approach to integrating roles, since the customer is not demanding a single seller </li></ul><ul><li>Focus sellers on the “business” buyer and pre-sales technical resources on the technical buyer </li></ul>Gap <ul><li>Assumption that there will need to be single sales resource ASAP to minimize confusion </li></ul><ul><li>Sellers tended to be overly technical, thus not satisfying the “business” buyer </li></ul>
    • 30. Step 3: Link Talent Management to Customer Competency  Know What the Customer Values  Translate Customer Values Into an Effective Coverage Model  Link Talent Management to Customer Value  Ensure Rewards Support Alignment  Track the Impact
    • 31. Defining Customer Competencies Sales Process Linkage Plan Create Optimize Business Acumen Account Planning Relationship Building Communication Negotiation Process Management Buying Process Value Partnership Focus Solution Orientation Value Driven Efficient Vendor
    • 32. Linking Customer Competencies to Talent Management <ul><ul><li>Identifying best reps and modeling sourcing and development strategies to replicate </li></ul></ul>Developing Appraising Onboarding Assessing & Selecting Sourcing <ul><ul><li>Consistent use of customer value terminology and reference points </li></ul></ul><ul><ul><li>Inclusion of customer-focused examples in scoring methods, interview guides, etc. </li></ul></ul>Consistent reinforcement of aligning customer value to sales performance
    • 33. Coverage Model: CleanMe Corp Customer Value <ul><li>Need appropriate expertise in both the capital buying phase and the ongoing consumable materials fulfillment </li></ul>Solution <ul><li>Specific competency models for each of the separate roles </li></ul><ul><li>Recognizing different talent markets for different roles </li></ul><ul><li>Enhanced training program, specifically for consumable sales </li></ul>Gap <ul><li>One-size-fits-all job role results in trying to find talent that is competent in all areas, which waters down capability in any single area </li></ul>
    • 34. Step 4: Ensure Rewards Support Alignment  Know What the Customer Values  Translate Customer Values Into an Effective Coverage Model  Link Talent Management to Customer Value  Ensure Rewards Support Alignment  Track the Impact
    • 35. Rewards Misalignment: Two Big Faults Fault Why An Issue Pay Mix Too Aggressive Puts additional pressure on generating more sales, creating more of an opportunity for dysfunctional selling Wrong Performance Measures Can overly focus a sales rep on a certain result a the expense of what the customer needs
    • 36. Rewards Misalignment: FixItSoft Customer Value <ul><li>Provide the right mix of products and services necessary to solve a business problem at the best value </li></ul>Solution <ul><li>Re-weight the performance measures to reflect the more typical mix of require products and services, OR </li></ul><ul><li>Adapt a total revenue model </li></ul>Gap <ul><li>Compensation plan weighted 80% on product license sales, 20% on services </li></ul><ul><li>Product required meaningful services in most cases to effectively integrate – required to generate top ROI </li></ul>
    • 37. Step 5: Track the Impact  Know What the Customer Values  Translate Customer Values Into an Effective Coverage Model  Link Talent Management to Customer Value  Ensure Rewards Support Alignment  Track the Impact
    • 38. What to Measure <ul><ul><li>Progress on aligning with customer values </li></ul></ul><ul><ul><li>Customer feedback (satisfaction, engagement, loyalty, etc.) </li></ul></ul><ul><ul><li>Your business results </li></ul></ul>
    • 39. Measure the Impact in the Results -6% -10% 84% 15% 5% 8% 100% 112% Growth Composition View: Segment A Improved from -10% in the prior year Improved from +8% in the prior year Analyze growth to better isolate what is working and what isn’t working
    • 40. Other Useful Measurement Techniques Win/Loss Analysis <ul><li>Gathers specific feedback about a won or lost deal… while the topic is recent </li></ul><ul><li>Trends can be spotted that are specifically linked to increased revenue </li></ul>Customer Satisfaction Surveys <ul><li>Structured method to measure general satisfaction across a representative sample of the customer base </li></ul><ul><li>Quantitative, but often to a fault </li></ul><ul><li>Not the same as knowing what the customer values </li></ul>Sales Engagement <ul><li>Assess if the right balance between customer, company, and seller has been reached </li></ul>
    • 41. Wrapping Up
    • 42. Case Study Conclusion: CleanMe Corp <ul><ul><li>Implemented new coverage model, talent programs, and rewards system at the beginning of 2008 </li></ul></ul><ul><ul><li>Minimal sales turnover </li></ul></ul><ul><ul><ul><li>Despite the unrelated departure of the well-respected Head of Sales </li></ul></ul></ul><ul><ul><li>Growth rates increased (nearly double) across all product families </li></ul></ul><ul><ul><li>Customer-level impact metrics to be evaluated this fall </li></ul></ul>
    • 43. Case Study Conclusion: FixItSoft <ul><ul><li>Programs being implemented (process began in June, full roll-our for 2009)… so the jury is still out </li></ul></ul><ul><ul><li>Customers report high level of satisfaction simply as a result of being asked for their opinion </li></ul></ul>
    • 44. Questions? Thank you for attending! Paul Reiman [email_address] (847) 442-3547 Rob Bentley [email_address] (847) 442-2673

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