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ACG Global - Lean Growth Agenda 1 - Sales Force Effectiveness


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As the west falters, growth in Asia is more important than ever – but how effective is your sales force?

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ACG Global - Lean Growth Agenda 1 - Sales Force Effectiveness

  1. 1.    Sales force effectiveness I June 2013 I              Sales force effectivenessAs the west falters, growth in Asia is more important than ever– but how effective is your sales force?  Growth Agenda Issue 1 Updated June 2013  
  2. 2.    Sales force effectiveness I June 2013 I www.acgrowthdelivered.comResearch from ACG Global, the leading advisory group, suggests that despite notching uprates of growth well beyond anything that the US or Europe can deliver, many sales teamsin Asia are highly inefficient.A survey of more than 1000 salesmen across 9 sectors – including some market leaders -reveals that on average sales executives spend 55% of their time on non-sales activitiesand as little as 15% on developing high-opportunity relationships.1. Do you track your growth against your key competitors?A chemicals company that achievesrevenue growth of 20% looks like agrowth leader in global terms but maywell be growing at or below theaverage rate of growth for its sector.As a general rule, an effective salesforce will take share from thecompetition, which requires growingfaster than the sector average.  2. How do your salesmen spend their time, & how does time align to customer value?Studies have long suggested that sales men worldwide spend much time on non-salesactivities. A recent survey by ACG of 9 sectors in Asia suggest that average performance isdeteriorating, with those polled spending only 45% of their time actively selling, whilst anaverage 55%, is spent on administration and transactions. If this is true for yourorganization, you may have a major opportunity to drive effectiveness and growth.The survey further reveals that, ofthe time spent selling, more than60% is typically spent with repeat orlow-growth customers. Time spendis driven by existing relationshipsrather than growth opportunity.    Aligning sales effort to future value –which implies de-emphasizing lowgrowers – drives intimacy with keygrowth accounts, capturing greatermarket share and better margins.  Sales growth does not imply goodperformanceCustomer-facing time is on average 45%,but ranges from 34%-55% for cos surveyed.Vishnu Dela Fuente , ACG Global, says: “You canlook like a star in Asia by just growing at the samerate as the market: but we think if you are seriousabout winning market share from the competition,you should consider 4 key questions.”
  3. 3.    Sales force effectiveness I June 2013 I www.acgrowthdelivered.com3. Is your sales and support organization aligned to customer value, or do allcustomers get the same investment of time and money?Bandwidth is finite, so although it islogical to emphasize key growthaccounts, you can only find the timeto do this if you make and executecareful choices about what you re-assign or de-emphasize.This goes beyond creating a keyaccount structure, because unlessthe focus on key accounts isbalanced by a reduction in othersales activities – think transactions,collections, supply issues – all thathappens is that customer-time isfurther diluted.If you know which customers will bring you most value (think future value over 2-3years), you should ensure that your investment of time and resource in fulfillment as wellas in sales is calibrated to favor high-potential accounts. Try picking a few accounts ofdiffering value and track their relationship with your organization from order to cash, is itreally different? This means differentiating the entire customer experience so yousupport low-growth accounts using a low-cost model (think call centre, with minimumsales involvement) in order to nurture high-potential accounts.4. Are sales rewards weighted towards new rather than repeat business?It is much harder to land a new account, or sell a new molecule, than to farm an existingone. Unless your remuneration structure recognizes this and pays more for what is newyou can be certain that sales time will be spent on plucking the low-hanging fruit.This is controversial and sensitive. Unlike northern Europe, cultures in Asia, includingsome of the largest, are to a great extent driven by financial reward. Sales programswhich omit this driver – there are alternatives we can share – may have limited impact.5. How transactional is your sales culture really – what will it take to change it?70% of sales change programs in Asia fail to deliver due to poor implementation.Changing sales behavior is tough and it is critical to understand and manage causes ofchange resistance with culturally-appropriate planning, communication and managementtools. We have learned the hard way what works and what does not, and have developed aset of tools to plan and execute sales change which have repeatedly enabled clients tocapture significant growth upside.  Simon Littlewood, President of ACG Global, says: “We havealways encouraged clients to look at sales time use as a leadingindicator of effectiveness….we see lots of opportunity to free up time,put structure around it, and use it to take share from the competition.”RiskLow HighLowHighImportanceTier%2%Flexiblebasedonneed–elementsofproac4vityTier%1%High:intensitySupportModel–SinglePointofContactTier%3%Costdrivenapproach–reac4ve&automatedwherepossibleTier1–Proac4veordercapture,collec4onandissueresolu4on;dedicatedpointofcontact.Tier2–Closemonitoring,mixofdedicatedanddesignatedpointsofcontact.Tier3–Reducedcostservicemodel(e.g.third:party)basedondesignatedcontact.Fig.%1%–%Focus%service%on%high4poten7al%and/or%high4risk%accounts%to%protect%growth%&%reduce%risk%
  4. 4.    Sales force effectiveness I June 2013 I www.acgrowthdelivered.comMarket entry & strategyUnderstanding and comparing marketsand channels in order to prioritize andplan new growth.Sales effectivenessImproving sales effectiveness by freeing up sales time fromnon-growth activities and using management tools andincentives to ensure delivery of new growth.Working capitalStreamlining support processes toimprove service and release workingcapital from receivables and inventories.Shared services and offshoringOffshoring support processes to free timefor growth, improve service, and reducetransaction costs.Transition managementEnsuring timely delivery of complex change programs usingculturally appropriate change and communication tools tobuild consensus and momentum.ACG Global product offeringsACG Global - formerly Asia Now - is a boutiquemanagement consultancy founded in Singapore in 1998. Wedeliver faster growth to major companies worldwide byimproving sales effectiveness and reducing costs and workingcapital. We believe in long-term partnership and weemphasize process and behavioral change.  3 Shenton Way # 18-05 Shenton House, Singapore 068805O: (65) 6322 8557 |  © Copyright ACG GlobalAll rights reserved.For more on this article, including detailed case studies foryour industry, or on any of our offerings please“Our Strategy is Implementation.”Lou Gerstner