Establishing and Managing a sales organization
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This document discusses best practices for setting up and managing an effective sales function. It covers three key areas: people, processes, and technology. For people, it emphasizes competency frameworks, incentive structures, and organizational structures. For processes, it outlines strategies for sales funnel management, lead generation and qualification, relationship building, and solution proposals. For technology, it discusses tools that can enable sales, improve communication, and facilitate monitoring. The document provides models and examples for each of these areas based on the author's experience to help organizations design stronger sales capabilities.
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Establishing and Managing a sales organization
- 1. SETTING UP AND MANAGING AN EFFECTIVE SALES FUNCTION PERSPECTIVE, EXPERIENCES AND BEST PRACTICES
- 2. DISCLAIMER The thoughts that are represented are an amalgamation and sequencing of multiple articles and publications on the web. This is my view of how an organization attempting to setup a stronger sales function should start looking at the problem.The dimensions laid out are based on my experiences These are at a level of abstraction that it should be applicable to most organizations. However, I am told that these are more applicable to enterprise sales than other models. I leave the decision up to you.
- 3. UNDERSTANDING WHAT MAKES SALES SUCCEED People • Competency • Incentives • Structure Processes • Strategy • Execution • Metrics Technology • Enablement • Communication • Monitoring
- 4. COMPETENCY FRAMEWORK UNDERSTANDINGWHY FOLKS SUCCEED IN DIFFERENT ENVIRONMENTS Competencies Knowledge – Cognitive Skills – Physical Behaviour - Qualitative “Skills and abilities described in behavioral terms that are observable, measurable, and coachable and critical to successful individual or corporate performance”
- 5. SAMPLE BEHAVIOURAL COMPETENCY FRAMEWORK Achievement Orientation Customer Service Orientation Impact and Influence Initative Interpersonal Understanding Wants to do job well Follows-Up States intention but takes no specific action Address current opportunities or problems Understands either emotions or content Creates own measures of excellence Maintains clear communciation Takes a single action to persuade Is decisieve in crisis Understand both emotions and content Improves performance Takes Personal Responsibility Takes multiple actions to persuade Proactive to short-term impact Understands meanings Sets and works to meet challenging goals Takes action for Customers Calculates impact of ones action or words Proactive to medium term impact Understands underlying issues Makes cost-benefit analysis Addresses Underlying Needs Uses indirect influence Proactive to long-term impact Takes calculated Entreprenurial Risks Uses Long Term Perspective Uses complex influence strategies
- 6. INCENTIVES
- 7. 5 TYPES OF COMP PLANS %age of target achieved Total Comp %age of target achieved Total Comp %age of target achieved Total Comp %age of target achieved Total Comp %age of target achieved Total Comp 1 2 3 4 5
- 8. STRUCTURE
- 9. CHANNEL MIX WOULD BE DETERMINED BY YOUR BUSINESS MODEL / OFFERING Customer Acquisition Costs Determined by the channel mix employed (next slide) Complexity of Sale Number of stakeholders involved Length of sales process Product support requirements Buyer integration requirements Level of Customization Budgeted vs. non-budgeted expenses Level of buyer knowledge
- 10. 1000 600 500 150 120 50 20 0 200 400 600 800 1000 1200 Field Sales Force Value Added Partners Volume Distributors Telesales - High Internet - High Telesales - Low Internet - Low Cost UNDERSTANDING CUSTOMER ACQUISITION COSTS Inside Sales Hybrid Field Sales Pricing Low Medium High Sales Complexity Low Medium High Product Novelty Low Medium High Sales Cycle Short Medium Long Sales Budget Low Medium High Language Barrier Low Medium High Early Growth Stage Low Medium High # of stakeholder involved in decision Less Medium > 3 Level of buyer knowledge High Medium Low
- 11. SALES FORCE SPECIALIZATION CONTINUUM Some specialization of selling activities, products, and/or customers All selling activities and all products to all customers Generalists Certain selling activities for certain products for certain customers Specialists
- 12. GEOGRAPHICVS PRODUCT ALIGNED SALES FORCES Organizational Structure Advantages Disadvantages Geographic • Low Cost • No geographic duplication • No customer duplication • Fewer management levels • Limited specialization • Lack of management control over product or customer emphasis Product • Salespeople become experts in product attr. & applications • Management control over selling effort • High cost • Geographic duplication • Customer duplication
- 13. MARKETVS FUNCTIONAL ALIGNED SALES FORCES Organizational Structure Advantages Disadvantages Market • Salespeople develop better understanding of unique customer needs • Management control over selling allocated to different markets • High cost • Geographic duplication Functional • Efficiency in performing selling activities • Geographic duplication • Customer duplication • Need for coordination
- 14. UNDERSTANDING WHAT MAKES SALES SUCCEED People • Competency • Incentives • Structure Processes • Strategy • Execution • Monitoring Technology • Enablement • Communication • Monitoring
- 16. UNDERSTANDING THE SALES FUNNEL IS ESSENTIAL TO RUN EFFECTIVE SALES FUNCTION How do prospects enter each stage ? Why do they enter / leave? Who is tasked with interactions at each stage What do I need to do to improve throughput ?
- 17. WE ALSO NEED TO UNDERSTAND HOW CUSTOMERS BUY…. Non- performance Issue Identification Diagnosis Prognosis Project Implementation Success & Improved Results • How do you make a buying decision in your current organization? • How did you make a buying decision in your previous organization? Factors Criteria Issues Benefits Makers Situation Politics Funding ROI Pricing Timing Events Reporting
- 18. THE SALES PROCESS Lead Generation Lead Qualification Relation Building Solution Design & Propose Negotiate & Close • Understand the sales process • What is common • How things differ by the offering • How thing differ across developing and developed markets • Understand some best practices • Evaluate what meets the requirement of your organization
- 19. LEAD GENERATION Website Blogs Whitepapers Industry Magazines Publish Speaker in Industry Conference Social Media Online- Ads SEO Promote Emails Cold-Calls Road Shows Referrals Social Media Connect Decision Factors Solution Specificity ( Broad Based, vs Specific) Cost of Ownership ( Low vs High) Time to Benefit Realization ( Low vs High) Cultural Nuances ( Credit vs Cash)
- 20. LEAD QUALIFICATION Establish Criteria Evaluate Lead / Assign Score Act Review “B2B marketers who emphasize lead volume over lead quality reduce sales efficiency, increase campaign costs, and fuel the gap between sales and marketing.To generate qualified demand, marketers need technology and processes that capture lead quality information; validate, score, and classify leads; develop programs to nurture leads that don’t yet warrant sales attention; and define metrics that directly identify marketing’s contribution to the sales pipeline and closed leads.” Laura Ramos at Forrester Research Pursue Drop Nurture
- 21. LEAD QUALIFICATION Dropping Dropping bad leads can help save time, effort and money. Nurture Sales reps dedicate 14% of their time to lead development, but only 6.3% of leads are utilized (Source Sirius Decisions) An effective lead nurture program can improve customer acquisition by almost 30%. On average, organizations that nurture their leads experience a 45% lift in lead generation ROI over those organizations that do not (Source Marketing Sherpa) Establish Criteria Evaluate Lead / Assign Score Act Review Pursue Drop Nurture
- 22. RELATIONSHIP BUILDING Techniques viz. SPIN, SCQA Understand Criteria Issues Benefits Makers Situation Politics Funding ROI Pricing Timing Events Reporting
- 23. SOLUTION DESIGN & PROPOSE Seller Profile SPIN (Situation/Problem/Implication/Need Payoff) FAB (Features-Advantages-Benefits) Financial analysis/spreadsheet Persuasiveness
- 24. UNDERSTAND “DAY-IN-THE-LIFE” TO IDENTIFY PROCESS MODIFICATIONS Sales Reps Planning, 10% Waiting, 29% Admin & Meetings, 25% Travelling, 20% Face-to-face, 16% Sales Management Coaching, 30% Admin, 21% Meetings & Conf, 16% Travel, 16% Analysis, 6% Acct Mgmt, 5% Performance Mgmt, 3% Hiring, 3%
- 25. REFERENCES www.google.com Predictable Revenue:TurnYour Business Into a Sales Machine with the $100 Million Best Practices of Salesforce.com by Aaron Ross The Pyramid Principle: Logic in Writing andThinking by Barbara Minto