Companies have become savvy customers; they have often determined the solution and the supplier they need, and the price they are willing to pay, before the salesperson enters the scene. In this competitive environment, the premium on finding, training, motivating and retaining star performers has never been higher.
Because firms only measure past sales performance, they have limited insight into how a salesperson will do going forward and what types of training and incentives
will be most effective. Failing to forecast a salesperson’s future value can lead to costly misallocation of training and incentive dollars. Many firms overvalue their poor performers and undervalue their stars, which might lead to undervalued top salespeople to slip trough their fingers and into competitors’ arms. This article illustrates a novel method for measuring a salesperson’s future profitability to the firm. Future performance is linked to specific types of training and incentives and show how those investments can dramatically boost revenue.
This is the world of the sales machine, built to outsell less focused, less disciplined competitors through brute efficiency and world-class tools and training. Recently
sales has been caught off guard by dramatic changes in customers’ buying behavior and sales performance has grown increasingly erratic. The very approaches that made the sales machine so effective now make selling harder. The sales machine is stalling. Leaders must abandon their fixation on process compliance and embrace a flexible approach to selling driven by sales reps’ reliance on insight and judgment.
This is the world of the sales machine, built to outsell less focused, less disciplined competitors through brute efficiency and world-class tools and training. Recently
sales has been caught off guard by dramatic changes in customers’ buying behavior and sales performance has grown increasingly erratic. The very approaches that made the sales machine so effective now make selling harder. The sales machine is stalling. Leaders must abandon their fixation on process compliance and embrace a flexible approach to selling driven by sales reps’ reliance on insight and judgment.
Sales Territory Design should support your sales strategy. In this presentation by Sales benchmark Index, you will learn the 3 goals of territory design and how to choose the one that best supports your strategy.
Strategic capability - strategic human resource managementmanumelwin
Strategic capability is a concept that refers to the ability of an organization to develop and implement strategies that will achieve sustained competitive advantage. It is therefore about the capacity to select the most appropriate vision, to define realistic intentions, to match resources to opportunities and to prepare and implement strategic plans.
Sales & Distribution Management- nature, recruitment and seelction, training and compensation of sales people, sales cost and sales meetings,
Channel flows, sales territories, role of logistics
Sales Territory Design should support your sales strategy. In this presentation by Sales benchmark Index, you will learn the 3 goals of territory design and how to choose the one that best supports your strategy.
Strategic capability - strategic human resource managementmanumelwin
Strategic capability is a concept that refers to the ability of an organization to develop and implement strategies that will achieve sustained competitive advantage. It is therefore about the capacity to select the most appropriate vision, to define realistic intentions, to match resources to opportunities and to prepare and implement strategic plans.
Sales & Distribution Management- nature, recruitment and seelction, training and compensation of sales people, sales cost and sales meetings,
Channel flows, sales territories, role of logistics
Sales training organizations are challenged when trying to measure the impact of specific choices on behavior change, just like a weight scale can’t tell you how much you have benefitted from skipping the fries and how much was due to a new walking program. This brief describes how coupling training investment with coaching and measurement helps to enhance its overall impact.
SPI Insight: Selecting and Developing Sales Talent with Employee AssessmentsDario Priolo
This eBook covers:
How to determine if your existing talent is capable of executing future growth
Essential features of effective sales hiring assessments
Why personality assessments alone are inadequate
How to identify who you should choose as your next sales manager
Rewiring marketing: a practice based approachBrowne & Mohan
Many marketing managers are not aware if they are leveraging marketing efforts correctly or getting the returns that they anticipated. Often people believe transforming marketing is all about creating some digital assets. Marketing transformation is not piece meal improvement. The primary purpose of a marketing transformation is to increase the ROI of marketing your company. In this white paper, Browne & Mohan consultants share a practice based approach to marketing transformation.
Sales is an area where many companies find the outcomes belie investments and outcomes. Many companies attempt sales transformation in a piece-meal fashion. In this paper, we discuss the framework for sales transformation and five fundamental levers of sales transformation.
Investing in a sales training program is the amongst best investments to make your business grow exponentially. Here are the 9 valuable tips for sales coaching that you must know.
https://www.yatharthmarketing.com/valuable-tips-for-sales-coaching/
Improve your sales recruitment process and hire more winners.Darren Spence
Despite having run 9 sales teams; hired many sales people; and run a business; I am afraid to say that in the early years I was pretty poor at hiring sales people. It was very hit and miss. This article, which is in ISMM's "Winning Edge" magazine and which is aimed at sales managers, sales directors, HR professionals, and business leaders will (hopefully) make you think differently about sales recruitment. Sales recruitment is a science and is not about guess work or hiring on a prayer. By introducing competency assessments into the hiring process candidates will be happier and so too will employers.
Companies fiddle constantly with their incentive plans and sales executives are always looking for ingenious ways to motivate their teams. If sales targets are missed, they blame the sales compensation plan and start over. Meanwhile, The finance organization views the comp plan as an expense to manage. That’s not
surprising: Sales force compensation represents the single largest marketing
investment for most B2B companies. So naturally finance tries to ensure that comp
plans have cost-control measures designed into them. Additionally, many companies
respond to cost-cutting pressure from the finance department with incentives that
backfire. More often than not, controls encourage salespeople to spend time with
customers according to the company’s internal needs, rather than when the customer
is ready to buy.
Social networks are critical in sales. Companies and salespeople can improve
performance significantly by understanding the interplay among the different webs
of customers, leads and colleagues they develop.
The sales process can be represented as four distinct stages, which all require a
different set of abilities and network configuration. If salespeople and managers
understand how networks function, they can pinpoint the most effective network
configuration for each stage of a sale and take the actions necessary to create it and
outshine competitors. In each stage of the sales process, the salesperson’s efforts
come down to two essential and complementary types of network-management
actions: managing the information flow and coordinating the efforts of contacts. This
article offers a framework for systematically managing different social networks, by
matching the network to the task. The article also presents three levers managers
can use to encourage salespeople to integrate the network-based view and make the
best possible use of social networks.
This document summarizes three connected pieces of work by Steve W. Martin, that should resonate with salespeople and sales managers alike. A lot of research has been conducted concerning the right capabilities a salesperson should have to become a high-performing top salesperson. This project involved the interviewing of top salespeople and sales leaders to gather more information
about the attributes necessary to exceed your quota.
This interesting articles suggest that successful salespeople need not always
exhibit extrovert tendencies, nor will salespeople be at a complete disadvantage
if they introverts. The author works on a concept proposed by bestselling author
Daniel Pink and proposes the ambivert (referring to an individual who falls
between an extrovert and an introvert) as the ones who are more likely to be
successful in the long run. Basing himself on a sample of salespeople, Adam
Grant, proves his point and offers some pointers for sales managers.
In this article, the authors suggest that sales managers need to realize that not all sales visits to the customers will necessarily create value for the customer. Sales managers need to realize that different sales processes exist when dealing with customers and the key factor determining the sales process is got to be based on how much value a salesperson can bring to the customer. The
authors go on to identify three different types of sales processes and give reasons as to why value based segmentation is the best way to help your salespeople deliver value not just for their customers but also for themselves.
Based on extensive research, this study by the Corporate executive Board
(CEB) builds on their idea of the challenger sale by providing strategies by
which salespeople can better understand the diversity that exists in the decision
making unit of the customer and work on making sure that the diversity does
not drive apart the customers from a key decision. On the contrary successful
salespeople work on developing a consensus in the decision making unit of the
customer and using this to drive home the sale. The various strategies to help
consensus are then elaborated in the article.
Enterprise architecture @ work vlerick research insights and belgacom testi...
Who's your most valuable salesperson
1. Vlerick Sales Centre Article Summary Series
Who’s your most valuable salesperson? (by V. Kumar, Sarang Sunder and
Robert P. Leone, Harvard Business Review, April 2015)
Summarized By Ellen Croux and Deva Rangarajan, Vlerick Sales Center
Introduction
Companies have become savvy customers; they have often determined the
solution and the supplier they need, and the price they are willing to pay, before
the salesperson enters the scene. In this competitive environment, the premium on
finding, training, motivating and retaining star performers has never been higher.
Because firms only measure past sales performance, they have limited insight into
how a salesperson will do going forward and what types of training and incentives
will be most effective. Failing to forecast a salesperson’s future value can lead to
costly misallocation of training and incentive dollars. Many firms overvalue their
poor performers and undervalue their stars, which might lead to undervalued top
salespeople to slip trough their fingers and into competitors’ arms.
This article illustrates a novel method for measuring a salesperson’s future
profitability to the firm. Future performance is linked to specific types of training
and incentives and show how those investments can dramatically boost revenue.
Gauging future value
Most firms use revenue generated as main metric for valuing their salespeople.
Reps who bring in the most money are considered ‘stars’. However, this measure is
neither an accurate gauge of a rep’s current worth, nor a good indicator of his or
her potential.
Salesperson Future Value, SFV, is the net present value of future cash flows from a
salesperson’s customers after accounting for the costs of developing, motivating
and retaining the rep. It measures the rep’s expected future profits. Comparing
SFV for different time horizons allows managers to optimize training and incentives
to achieve short– and longer–term goals.
SFV = CLV - Cost
CLV = Estimated Customer Lifetime Value of the rep’s existing and prospective customers.
Cost = The present value of the rep’s training and incentives, such as commissions.
To understand the relationship between revenue and future value, a study was
conducted in a firm that applied generated revenue as a metric. First, the sales
force was divided into deciles, according to revenue generated over a three-year
2. period. Next, the SFV was calculated for the reps in each decile. The results showed
that the firm had been dramatically undervaluing salespeople in the highest decile
and reps in the lowest decile, who appeared to bring in lower but still substantial
revenue, were badly overvalued – destined to cost more than they generated.
There is also a rapid drop-off in SFV by decile; already from the third decile down,
the backward looking revenue metric consistently overstated the reps’ true value to
the firm.
Investing in the sales force
Most managers are aware of the need for different teaching and motivating
techniques, depending on the person and the circumstances. Still, training and
incentive programs are often applied unscientifically, on the basis of best guesses,
with predictably uneven results.
The SFV provides a starting point for finding out what training and incentives will
bring out the best in a high achiever or help a promising rep improve. After
determining the SFV of each rep in the study company, data on each rep’s prior
training and incentives was correlated with their SFV to understand the factors that
influence a salesperson’s future performance. Data was gathered on two types of
training each rep had received: task related – such as building product and
customer knowledge – and growth related – such as developing leadership, team
and customer engagement skills. In addition, rep-level data on the value of
monetary incentives received and the number of nonmonetary rewards was
collected.
The study identified strong associations between training types, incentives, and a
rep’s future performance. Two broad classes of sales reps were identified: training-
driven reps – whose SFV is influenced most by instruction and learning – and
incentive-driven reps – who are motivated more by monetary and other rewards.
This analysis allows the firm to optimize each salesperson’s training and incentives
according to his or her segment.
Optimizing training and incentives
According to the study, during the first four years all salespeople undergo basic,
mandatory task and growth training. Most sales training is task related, focused on
improving knowledge and skills directly involved in selling. Growth-related training
enables reps to “learn how to learn,” helping them identify needed task- related
skills and develop their repertoire of those skills.
When examining the data, three findings emerged that have important managerial
implications:
- More isn’t necessarily better. Because training is expensive and time-
consuming, the cost of further training beyond a certain point outweighs any
incremental increase in a rep’s SFV. Knowing where that point lies for
salespeople in each segment is critical.
- Time frame matters. Training effects in general are greater in the long term.
3. - Managers must be patient in evaluating the effects of training.
- Training types are mutually reinforcing. Growth-related training, which focuses
on adaptive and problem solving skills, can increase a rep’s future value in part
by enhancing his or her ability to apply information and tactics developed in
task-related training. It’s important for managers to consider the synergy
between the two types when designing training schedules. The benefits of the
synergy are also greater in the long term than in the short term.
When it comes to extrinsic motivators, monetary rewards are more powerful for all
types of reps in the short term – although incentive-driven reps had a greater
response to them than did training-driven reps. Both groups responded positively
to nonmonetary rewards, both in the short and long term. Monetary and
nonmonetary rewards have a greater impact on SFV when combined.
Redefining sales force management
Firms can use advanced customer relationship management systems that allow
them to measure SFV. Managers can use the SFV to segment the sales force and
based on this segmentation they can make data-driven decisions about investment
in training and incentives, career development, and even hiring and firing.
Training and incentives investment
Managers should determine each salesperson’s sensitivity to different types of
instruction and monitor both assigned and opt-in training accordingly, perhaps
even establish limits. They must determine which reps will respond best to different
types of incentives and adjust the incentive structure as needed. For example, in
the firm that was studied, managers made adjustments at the segment level based
on this approach. It allowed them to reallocate training and incentive investments
across reps, resulting in an 8% increase in SFV across the sales force and a 4%
increase in firm revenue.
Career development and retention
Sales person segmentation and future value calculations allow managers not only
to identify their best salespeople but also to understand why the profit potential of
one is climbing while another’s is plateauing or falling. Performance problems may
reflect misapplication of training and incentives. A rep can have great potential that
can be reached only when he/she gets the right tools.
Profiling and recruitment
SFV measurement allows firms to profile top performers, and then recruit and
optimally train and motivate others like them. To build such profiles, managers
must collect demographic and psychographic data on the high-SFV reps.
Conclusion
As selling becomes ever more complex, the role of the sales force as a source of
competitive advantage grows. SFV calculations allow managers to improve sales
force valuation and management and to be more strategic in hiring, firing,
4. motivating and training. SFV-focused management offers potential to streamline
the sales force and improve organizational efficiency. Future value metrics give
managers the possibility to optimize their resources and reduce system wide cost,
which results in increased profit and competitive advantage.