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Managing sales in a down market final


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Managing a sales force in recessionary conditions requires a radically different approach, and companies that fail, either react incorrectly, or too late.

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Managing sales in a down market final

  1. 1. Managing Sales in a Down MarketPresented by - Peter GilbertCEO of HR Chally SA<br />
  2. 2. Chally’s Position in the Marketplace<br />“Chally provides the only quantitative sales benchmarks, assessment tools, and metrics for managing the “people” part of the 3 key pillars of business: Strategy, People, and Process”<br />LeonardW. Frey III, IBM, Global Business Services, Principal, Service-Line Leader, Sales Strategy and Transformation<br />“Chally is like the GPS to Sales Success”GerhardGschwandtner, Publisher of Selling Power<br />“Chally is the proven comprehensive source of sales position assessment and sales research”<br /> "AJ" Gandhi, Managing Director, Sales Executive Council<br />
  3. 3. WORLD CLASS SALES BENCHMARKING STUDY<br />Over 7300 sales forces surveyed over15 years.<br />80-100 000 executives interviewed.<br />Executives asked how and why they buy.<br />All ratings based on customer feedback.<br />Careers of 230 000 salespeople tracked and monitored.<br />THE RESULTS:-In 15 years only 21 sales forces rated as world class by their customers!!!<br /> Only 1 salesperson in 1000 meets world class criteria<br />
  4. 4. Most CEOs should be really embarrassed about their sales forces!<br />
  5. 5. The reality is that the economic pie is much smaller…<br />Some people are going to be badly hurt.<br />Some will not survive.<br />Only a small number will have the will, discipline and strategic vision to thrive.<br />
  6. 6. There is plenty of bad news!<br />Stock Market Crash<br />
  7. 7. Wall Street Crash - 1929<br />
  8. 8.
  9. 9.
  10. 10.
  11. 11. But there is also good news…<br />Paula Creamer<br />Natalie Gulbis<br />Some people are making truck loads of money!!<br />
  12. 12. What are the possible outcomes of the recession?<br />
  13. 13. Absolutely Fly!!<br />
  14. 14. Crash & Burn!!<br />
  15. 15. Simply Survive…<br />But this may not be the good news it seems!!!<br />
  16. 16.
  17. 17. In South Africa most sales managers have less than five years experience.<br />Many of them may have never faced a tough market.<br />And about 70% have never received any sales management training!<br />
  18. 18. To really thrive in a recessionary market is going to require a radically different approach.<br />The story of the 1988 America’s Cup illustrates the point.<br />NEW ZEALAND<br />The holders<br />United States<br />The Challengers<br />
  19. 19. The Challenge<br />
  20. 20. Catamaran – America’s Cup 1988<br />
  21. 21. What is different?<br /><ul><li>Fear, uncertainty and doubt is prevalent.
  22. 22. How purchases will get made has changed.
  23. 23. What contributed to sales success in the past – won’t guarantee success in the future.</li></li></ul><li>Market Contrast<br />22<br />
  24. 24. The Implication for Sales<br /><ul><li>Risk Aversion
  25. 25. Cost Cutting – Cash Conservation – Spending Cuts
  26. 26. All projects reevaluated
  27. 27. Slow down of decision process
  28. 28. Corporate approval process has changed/risen</li></li></ul><li>Surviving<br />Thriving in the Current<br />Economic Crisis<br />
  29. 29. We’re Getting Much Better at This<br />The Great Depression 1929–1939<br />Stock markets crashed worldwide, sparking a global downturn, including a second recession in 1937<br />It took 10 years to fully recover <br />In modern times the average is 24 months!<br />But !!!<br />25<br />
  30. 30. Those companies who suffered most or actually failed made 2 successive mistakes: <br />They reacted “inappropriately” <br />Were too slow to prepare for the turnaround<br />The Result:- More companies that failed, failed after the recession, not during it!!!<br />26<br />
  31. 31. Stereotypical Success Story<br />Nobody ever got fired for buying IBM<br />
  32. 32. The Difference Between Business Winners & Losers<br />28<br />
  33. 33. A Roadmap For Success<br /><ul><li>Strategy
  34. 34. Focus Focus Focus
  35. 35. Upgrade systems and processes to “C” suite standards
  36. 36. Audit & Re-evaluate associates, partners, prospects, customers and sales force. Direct and commit resources accordingly
  37. 37. Focus on major improvements to the customers experience and results : Deliver value
  38. 38. Bring in the big guns – display confidence</li></li></ul><li>Strategy<br />
  39. 39. “Managing during the growth stage of the networking business meant you had to run and gun. Hiring as fast as you could, ramping the new people to just basic competence, and then pushing their activity to maximize your coverage. Making the sales numbers required stamina, not necessarily brilliant strategy” <br /> Bruce Parelskin<br /> Cisco Systems<br />
  40. 40. Refining and Enhancing YourGo-To-Market Sales Strategy<br /> “A Go-To-Market strategy is a purposeful and defined strategy to serve customers, win market share at acceptable margins and outperform the competition.”<br />
  41. 41. Go-To-Market Strategy: Why Does It Matter?<br />Sell more of your product/service faster<br />Get your ideal price more often<br />Increase customer satisfaction<br /><ul><li>Higher customer loyalty
  42. 42. Increased revenue per salesperson
  43. 43. Decreased time to market
  44. 44. Decreased time in employee performance
  45. 45. Increased number of sales people making quota
  46. 46. Decreased unwanted sales turnover
  47. 47. Increased revenue per member
  48. 48. Increase renewal retention</li></ul>Increase profitability and customer value<br />
  49. 49. Go-To-Market sale strategy Model (GTMss)<br /><br /><br />Infrastructure<br />Customer Co-Management<br />Efficiency<br />Value<br />Price/Performance<br />New Source Of Wealth<br />Relationship<br />Partner Based<br />Transaction Based<br />Marketing & Messages<br />Requirements Fit<br />Vision Fit<br />Customer Engagement<br />Make the ListMake the Rules<br />Make the SaleMake the Standard<br />Business Fit<br />Solution Fit<br />Trust Based<br />Political Based<br />Process Performance<br />Business Improvement<br />Effectiveness<br />Decisive Force<br /><br /><br />Known Need/Solution<br />Unknown Opportunities/New Solutions<br />Known Need/Unknown Solution<br />Known Objectives/Unknown Strategies<br />
  50. 50. Business Process and Alignment<br />Go-To-Market Operating System<br /><ul><li>Based on the chosen Go-To-Market Sales Strategy:
  51. 51. Design a Sales Process which operationalises the Sales Strategy
  52. 52. Align Marketing, Human Resources, Technology and Fulfillment to the strategy and process
  53. 53. Hire and Train to the process based upon demonstrable competencies and attributes
  54. 54. Select and install the correct management metrics and leading indicators</li></li></ul><li>FOCUS, FOCUS, FOCUS<br />Old Chinese Proverb<br />“If you chase two monkeys both will escape.”<br />
  55. 55. High Intensity Focus<br /><ul><li>Top Management become deeply involved
  56. 56. The client base is intensely scrutinised for current and future value
  57. 57. Huge attention is focused on most valued customers
  58. 58. Levels of engagement with key customers is intensified
  59. 59. Activity levels are increased by 35%
  60. 60. Carefully crafted messages are continuously communicated at all levels
  61. 61. There is intense effort directed at preparing the sales force for the upturn</li></li></ul><li>Upgrade Systems and Processes To “C” Suite Standards<br />Audit and re-evaluate associates, partners, prospects, customers and your sales force. Act swiftly on the findings. Direct and commit resources accordingly.<br />
  62. 62. Our Great Sales Challenges*<br />Increase Sales Productivity<br />Only 53% of pre-recession reps made quota<br />Pre-recession reps won only 49% of their opportunities<br />Cost Reduction<br />Pre-recession turnover ranged from 27% - 41%<br />*CSO Insights<br />39<br />
  63. 63. Where Do We Start to Upgrade Our Sales Growth Processes?<br />Learn from the “C” Suite: CEO’s, COO’s, and Executives in Finance, Manufacturing, Supply Chain Management, etc.<br />40<br />
  64. 64. The “C” Suite (and most Business Functions) Rely on Predictive Analytics Using:<br />TQM: To find sources of error and eliminate them<br />ISO, Lean and Six Sigma are modern refinements of TQM<br />The Six Sigma error rate standard is 3.4 times in every 1 million<br />Actuarial Science: Rely on the “Law of Large Numbers”<br />Develop metrics to measure and predict complex outcomes<br />Actuarial Research is based on:<br />Very large samples (100,000+) <br />Over long periods of time (10-50 years)<br />41<br />
  65. 65. The Traditional Approach to Sales “Benchmarking”<br />42<br />ABC Company: 200 Salespeople and $200M in Sales*<br />$104 Million<br />$2.6M/person<br />$90 Million<br />$750K/person<br />Consultants Recommend:<br />Study the techniques of the top 20% and train the middle 60%<br />*Performance averages based on over 900 sales forces measured by Chally over 35 years<br />
  66. 66. The Result<br />43<br />ABC Company: 200 sales people and $200M in Sales<br />$90 Million$750k/person<br />$104 Million<br />$2.6M/person<br />ABC Company: 200 Salespeople and $200M in Sales<br />= $204.5 Million<br /> Total Sales<br />$104 Million<br />$2.6M/person<br />$94.5 Million<br />Improving the performance of the middle by a generous 5% each... <br />only produces 2.25% improvement in sales<br />
  67. 67. 44<br />$90 Million<br />= $218 Million<br /> Total Sales<br />$114 Million<br />$90 Million<br />$104 Million<br />$104 Million<br />$4M/person<br />Applying to Selection & Alignment<br />ABC Company: 200 Salespeople and $200M in Sales<br />= $200 Million<br />Total Sales<br />= $223.7 Million<br />Total Sales<br />$119.7 Million<br />If we nowtrain the rest of the sales force and get a 5% gain, we get an additional $5.7 Million<br />Reassigning or replacing the bottom 20% with just “above average”<br />competency levels<br />will increase production by a minimum of 9%<br />
  68. 68. Key Components of ---------- - Methodology Include:<br />Conducting Customer Audits<br />To establish customer perceptions of current state and periodically re-auditing to measure improvement<br />Development of Statistical Analysis “Validation Study”<br />Identity the predictive competencies that differentiate success<br />Aligning your current Sales Talent to their strengths<br />Hunter vs. Farmer—Consultative vs. Relationship<br />Select new Sales Talent<br />Replace low performers with Sales talent that is matched to role and goals<br />Develop/Train/Coach your current and new Sales Talent<br />Implement sales and management training and coaching/ feedback system<br />Conducting Exit Interviews<br />Ongoing interviews of associates leaving to gain understanding of why<br />45<br />
  69. 69. ABC Company's Results in Millions<br />46<br />30%<br />30% of pre-recession sales that had been conceded to the competition<br />
  70. 70. Scores 50-100 Strength<br />Scores 40-49 Caution<br />Scores 0-39 Weakness<br />Sample Sales Force Talent Audit<br />
  71. 71. Focus on major improvement to the customers experience and results<br /><ul><li>Improved Offering
  72. 72. Improved Service
  73. 73. Improved Reliability</li></li></ul><li>Preparation<br />The customer: Industry Market Business Issues<br />Business conversations NOT technical <br />Purposeful, Ready to Execute<br />Anticipate Objections<br />
  74. 74. Real Value<br />Business Objective What a customer needs to accomplish to maintain or grow their business.<br />Business Issue What customer need to address and to achieve business objectives.<br />Problem Difficulties that prevent them from being able to satisfactorily deal with or resolve business issues.<br />Solution Capabilities any supplier needs to supply to enable customer to properly address their business issues.<br />ValueThe only thing that matters is a customer’s perception of the value of being able to resolve their business issues; always a combination of tangible and intangible components. Ensure your salespeople all have these skills.<br />
  75. 75. Uncovering Business Value<br /><ul><li>Financial Justification is key:
  76. 76. Increase Revenue
  77. 77. Decrease Cost
  78. 78. Improve Productivity
  79. 79. Capitalise on opportunities
  80. 80. Regulatory Compliance
  81. 81. Mitigate Implications</li></ul>Value Accrues to the Business Issue<br />
  82. 82. Bring in the Big Guns<br /><ul><li>Deploy your top executives in a carefully planned way
  83. 83. Focus on the stability, success and security of your company
  84. 84. Intensify the levels of engagement at all levels
  85. 85. Consistently send the message that you are a reliable and financially robust supplier.
  86. 86. Exit your poor performers early and boost the confidence and sense of security of the rest.</li></li></ul><li>Your Call to Action<br /><ul><li>Tune out information that isn’t helpful
  87. 87. Increase your activity by 35%
  88. 88. Rigorous qualification and time management
  89. 89. Keep value top of mind
  90. 90. Anticipate Objections and prepare
  91. 91. Eliminate excuses with specificity </li></li></ul><li>Chally Predictive Assurance® (CPA) ROI Guarantee<br />Based on client implementing Chally’s proven methodology …<br />Chally will deliver and guarantee client achievement of specific revenue and cost targets over a 3-year period <br />Please email to arrange a discussion!<br />54<br />
  92. 92. Thank You for Your Kind Attention<br />