Sales remains the corporate stepchild and, frankly, the quality of the vast majority of sales forces that I encounter is very poor. A carefully considered and well targeted investment in enhancing sales effectiveness can yield handsome, and even spectacular returns.
Professionalising sales updated version by taryn 26 september 2011
TRANSFORMING SALES INTO A PROFESSION The Journey From Peddler To Value Creator
WORLD CLASS SALES FORCES• ALLEGIANCE HEALTHCARE • GE INDUSTRIAL CONTROL SYSTEMS• APPLIED INDUSTRIAL TECHNOLOGIES x 2 • GRAINGER INCORPORATED• AT&T CONSUMER PRODUCTS • IBM GLOBAL SERVICES• AT&T MIDDLE MARKET • JOHN DEERE• AT&T GLOBAL SYSTEMS • MOORE CORPORATION LIMITED• BOISE-CASCADE OFFICE PRODUCTS x 2 • MOTION INDUSTRIES x 2• CDW • CORPORATE EXPRESS• DU PONT • GLOBAL IMAGING SYSTEMS• EXXON CORPORATION • INSIGHT ENTERPRISES
Many CEO’s should be reallyembarrassed about their sales forces!
Firstly Look At The Symptoms• Pricing pressure• Margin erosion• Selling is much tougher• Longer sales cycles• Customers want more for less• Inability to differentiate• High selling/service costs• Some customers unprofitable• Forecast slippage
What’s Driving Change? The usual suspects . . and some newer ones• Commoditisation • The internet• Competition • Consolidation of suppliers• Pricing pressure • Focus on value• Capacity excess• High selling costs• Mergers & acquisitions
What Does This Mean For Sales?• Even complex services will be increasingly commoditised and bought transactional• Customers are becoming ever smarter and more aggressive about capturing a bigger share of the value their suppliers create• Relationships that seemed protected and locked-in are being questioned and are under threat• Metrics driven, continuous improvement relationships have the best chance of resisting the new purchasing pressures• New enterprise relationships are supplanting traditional major account relationships
The End of Sales As We Know It! …and how to prepare for it
The Problem Post-recession markets have changed the game permanently1. There is little or no competitive advantage based on:• Product quality (all serious competitors have the same)• Cost (Supply chain management and Global sourcing level the playing field)• Innovation is short lived no global protection of Intellectual capital, and even where it exists reverse engineering debases2. The internet has switched the information advantage to the customer
The Problem• Traditional Field or “Route” sales is shrinking (internet purchasing, on line auctions, faster product life cycle from innovation to commodity)• Traditional field salespeople will transition to telesales (but with dedicated account management)• Higher end salespeople will need a sophisticated understanding of the appropriate market segment technology and market strategy PLUS the new sales skills as out- sourced managers for their customers• Sales will evolve to a professional level status with university preparation (providing the base business savvy and sales skills, as well as the appropriate academic background (Accounting, Finance, IT, Marketing, etc.)
The Problem• Business will have to provide the “advanced training” according to their priorities (Direct versus indirect, NBD, Acct management, Solution sales, etc.)• As a result sales positions will bifurcate to high end “more sophisticated consultive” sales teams and more highly educated telesales (with dedicated accounts)• Individuals without university level sales training will gravitate by default to transactional retail or personal service sales• In the 60s, sales positions had begun to replace the highly paid union factory worker as the middle income pool of citizens, now sales are fading as the last upwardly mobile career path that didn’t require a college degree. (there has been a loss of 2 million of these sales jobs in the USA in the last 3-4 years)
The Lack of Science Behind the Problem• Starting with Fredrick Tailor, business has progressively developed more systematic disciplines: Moving from numerical process control, to total quality management (TQM), to ISO, to business analytics and finally leading to today’s actuarial applications and ultimately predicative analytics.• But, even the rudimentary TQM and six sigma have never been applied to sales: Until recently there has never been a “TQSalesM”• The lack of truly analytic processes and disciplines have led to failure rates unacceptable in any other business function 20-25% customer churn, 30%+ Sales person turnover 40% Sales manager turnover
The Lack of Science Behind the Problem• Anecdotal personal experience substitutes for a sales science, even the sales development books with a few exceptions have leaned on the “star” syndrome: I was a great salesperson This is how I did it If you do it you can be a great salesperson too!”• This has led to the fatally flawed benchmarking and Top Grading approach to looking for superstars• Cases studies as proofs don’t pass the Hawthorne effect Vendor’s publish less than 2% of their attempts. Do we doubt that these are their best results…and that 98% were less than completely successful?
Applying the Science of Total Quality Sales Management The Traditional Approach to Sales “Benchmarking” ABC Company: 200 Salespeople and $200M in Sales* $90Million $104 Million $750K/person $2.6M/personConsultant Speak: Study the techniques of the top 20% and train the middle 60% *Performance averages based on over 900 sales forces evaluated by Chally over 35 years
The Result ABC Company: 200 sales people ABC Company: 200 Salespeople and $200M $200M in Sales and in Sales $94.5 Million $90Million $104 Million $104 Million = $204.5 Million $750k/person $2.6M/person $2.6M/person Total SalesImproving their performance by an exceptional 5% each... only produces a 2.25% improvement in sales
Applying the Science of Total Quality Sales Management If we now train the rest of the sales force and get a 5% gain, we get an additional $5.7 Million
The Solution: Sales of the Future Bottom Line? It all will start with you! Universities and Business Will Make The Difference Corporations Develop the Professional SpecialtiesNew Bus. Nat. Alternate Territory Sales Product Dev. Accounts Channel Mgr. Engineer Specialist Core “University” Based Professional Sales Competencies and Practical Research
CHANGING THE SALES MODEL• It is becoming increasingly more difficult to differentiate yourself by what you sell. If you are unwilling, or unable, to differentiate yourself by how you sell, then you will, by default, end up differentiating yourself by how much you sell it for.
Traditional Sales TrainingWhat constitutes a good sale?• The sales cycle• Motivating to understand through the funneling concept• Type of questions and their effect on the customer• Understanding visible behaviour• Psychology behind the use of words• Developing your competitive edge• Optimising what your business has to offer through features & benefits• Dealing with the price issue• Seeing objections as new opportunities
Traditional Sales Training• Powerful Sales Process• Prospecting techniques to fill your pipeline with good leads• Ways to turn a cold call into a sale• Sure-fire ways of getting the client to say “yes”• Power-packed closing techniques• Essential secrets from successful sales people• Summiting sales steps
The 7 Customer Rules For Becoming The New Sales Professional• Salespeople take personal accountability for customers’ desired results.• In order to personally manage a customer account, salespeople must understand the customer’s business.• Customers expect salespeople to be their representatives within the seller’s organisation.• Customers want salespeople to think beyond features and benefits to applications• The ongoing expansion of corporate boundaries has been accompanied by a corresponding growth in customer demand for local, accessible sales representatives.• Customers expect salespeople to not only solve their problems during the transaction itself, but throughout the full term of the business relationship.• Because change is the only constant in today’s business-to-business environment, customers expect salespeople to respond with proactive continuous innovation to their spoken and unspoken needs.
Changing The Sales ModelValue Earned Value By The Delivered To Supplier The Customer Value – Price = Incentive to Purchase Price = reasonably clear Value = always obscure
Case Studies on Competing on ValueChicken Feed Supplier• Moved from supplying tons of feed to weight gain (nutritional value) per ton of feed delivered.Lubricant Supplier• Moved from selling lubricants to guaranteeing machine up time.Office Supplies Company• Office supplies company used Activity Based Costing, Professional Procurement, and Supply Chain Management to deliver office supplies to major corporations with massive cost savings.Hotel Group• Used it’s understanding of a key customers business issue, and now offers staff loyalty not just hotel rooms