Leading Today’s
Sales Organization
Jerome A. Colletti and Mary S. Fiss of Colletti-Fiss,
LLC
December 2006
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Constant change in today’s business environment
has made running the sales organization more demanding than it has
ever been. The CSO (Chief Sales Officer) is regularly challenged
by new demands and priorities from the CEO, customers and peers.
To stay out in front of these demands, we find that successful CSOs
are continuously thinking about and refining their points of view
about the following six areas.
- Change vision. A change vision
means having a view about what a company needs to do to succeed
with customers and the courage to put in place the competencies
and processes to make that vision a reality. Effective CSOs develop
a clear vision of what must be done to increase sales and, in
turn, sales effectiveness and the results they expect from the
changes required of their organization to meet new demands. CSOs
that: 1) Move quickly without gaining “buy-in” through-out
the sales organization; 2) Assume that systems where in place
to keep track of results; and, 3) Focus on shifting around boxes
on the organization chart without the benefit of a clear customer
strategy, invariably do not achieve the sales targets assigned
to them by the CEO.
- Leadership and managerial skills. Customers
motivate change. In fact, in some industries they demand it. In
companies where the CSO and his/her leadership team achieve a
substantial increase in profitable top line growth, they do three
things well: 1) They look to their customers to understand what
is required to gain and sustain a competitive advantage; 2) They
direct and participate in the processes in which their company
sells and provides service to customers; and, 3) They make investments
in resources that enable the sales organization to work productively
with their customers. To support these leadership mandates, CSOs
look to their front line managers; field managers need to develop
a much broader range of skills in several areas to do business
with customers. Typically, these areas include: 1) Financial;
2) Communications; and, 3) Facilitation/consensus building.
- Customer focus. Being truly “customer
focused” is easier to talk about than to implement. Companies
want to align their selling practices to the buying process of
their customers. However, the ability to do so successfully is
a bit of a paradox because they are managing sales for today’s
success while at the same time speculating on what future buying
models will actually look like. The growing popularity of the
Internet is an example of how a new form of access to customers
requires a rethinking of company’s traditional models of
sales and service coverage. One important dimension of customer
focus is the sales channels a company puts in place to do business
with customers. For example, companies that cover the market with
a direct sales force allow the field sales staff to decide which
customers to approach, sell to, and build relationships with.
To grow profitably, CSO find that they must determine the channels
that are most effective to access and keep customers, and the
sales models that are needed. In turn, tools must be in place
help both field and inside sales staffs determine which customers
are the best customers to invest in. Without such tools and processes,
resources could be wasted on the wrong customers, that is, customers
who actually reduce the opportunity for profitable business growth.
- Marketing and sales collaboration. Generally
speaking, in many companies the working relationship between the
marketing and sales departments has improved substantially in
the last five years. Once companies understand that there is a
disconnect between how they do business and how customers want
to buy, they realize that they have an acute need for the marketing
and sales departments to work together effectively. To achieve
effective collaboration between marketing and sales, successful
CSOs have developed a revenue growth implementation planning process.
This process focuses on high opportunity customer segments and
requires both functions to invest effort in initiatives that lead
to business success. For example, the marketing department, through
the use of innovative data mining techniques, can provide sales
with various tools and information to target customers who offer
the greatest revenue growth opportunities. The sales department
can provide marketing with valuable information about how customer
buying practices are changing and, therefore, how marketing may
need to alter product offerings, value propositions, and service
guarantees in the future.
- Productivity and investments in the sales
function. Companies look to their sales organization
to produce: 1) Revenue growth in strategic areas like acquisition
of new customers or the successful launch of new products; 2)
Greater sales productivity, e.g., higher sales per selling expense
dollar, greater sales per customer account; and, 3) Better allocation
of selling expenses, i.e., shifting sales costs to the most effective
form of customer coverage. To increase sales productivity, the
CSO must help the “sellers” increase the return on
time invested on the job. The investments that companies are making
in technology enabled selling -- giving customers access to information
that enables them to learn the status of new products, orders,
etc. without sales person contact -- is one way to increase field
selling time. However, investments in technology alone may not
result in the revenue growth that companies expect. Through our
surveys on “Executive Confidence in Sales Growth”
respondents consistently report average expected growth in sales
in the range of 10% to 15%. To achieve growth, some companies
are investing in “head count” growth. This is because,
in some cases, it is physically impossible to realize incremental
revenue because too few salespeople work on growing the business
-- they are consumed with retaining business with current customers.
- Sales force motivation. To create
and sustain a high performing sales organization, the CSO and
his/her leadership team must continuously work to direct, motivate
and reward sales people for achieving sales success with customers.
In many cases, the reason customers do business with a company
is become of their relationship with the salesperson. Therefore,
it is important that the sales organization understands the company’s
vision for growth, expected outcomes, and, alignment with various
sales force management programs -- quotas, incentive compensation,
and recognition. These programs – particularly compensation
and recognition – are essential to sustaining sales force
morale, motivation and, in all likelihood, retention of key people.
CSOs and, their leadership team, must hold the view that because
the sales function is continuously evolving and changing, there
is a consistent need to reexamine and enhance thinking and the
related processes and programs in these six areas in order to
deliver the profitable top line growth the company expects.
_______
References
For a more in depth discussion of job the CSO's job
is changing and what sales leaders are doing to respond to those
changes, see our article, "The Ultimately Accountable Job:
Leading Today's Sales Organization", Harvard Business Review,
July-August, 2006, pp. 124-131
_______
Authors
Jerry Colletti is Managing Partner at Colletti-Fiss,
a management consulting firm specializing in sales effectiveness.
A practicing consultant since 1977, he is well known for his innovative
contributions to the field of sales management, particularly the
area of consultative selling.
Mary Fiss, a practicing consultant
for over twenty years, specializes in helping client increase sa^les
force productivity through the effective use of compensation and
performance management programs.
They can be reached at Colletti-Fiss,
LLC, (480) 483-1480, jerry@collettifiss.com.
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