Top Salespeople Are NOT Magical Creatures
In some companies, it seems that sales people are magical creatures. They somehow know the right people and close business. Maybe you’ve seen this:
No one really knows how the salespeople closes business, finds opportunities, or does anything, but they do close business – and the good ones do a lot of it.
These magical salespeople are rarely in the office. Instead, they are out “visiting customers”. Which customers? Why? No one really knows. But they do seem to have a decent meals and entertainment expense report.
When they are in the office, the magical salespeople are on the phone, seemingly talking about nothing important but dotted with a sentence or two about offerings. Somehow, that long conversation about the merits of disc brakes over cantilever brakes on a bicycle led to an order for an ERP system.
And when you buy these magical salespeople a CRM system that is supposed to improve sales and therefore their pay, and you will hear them say it looks nice but you won’t actually see them use it.
And as magical creatures, the company treats them like precious fairies.
When magical salespeople find a strategic customer that needs an offering similar to others that the company sells but slightly customized, they go to operations and get them to deliver that customized offering.
When they find a strategic customer needs a lower price or that customer will go to the competition, they go to finance and get a better discount or rebate.
When they have had a big customer in a new segment, they go to marketing and get them to host a booth at a tradeshow designed for customers in that segment.
Even though they are rarely in the office, they do have a private office so they can “talk on the phone and not disturb others” presumably.
And when it comes to compensation, their commission check is huge, that is, commission on revenue even if it wasn’t very profitable.
Have you seen these magical creatures? Or companies treat salepeople like magical creatures? Problem is, sales isn’t magic. It is work.
Methodical Effort, not Magical
Neil Rackham, Reed Holden, Andy Zoltners, Prabha Sinha, and many others have all repeatedly found that good salespeople are methodical. They use an approach towards sales that drive prospects through a process. The process starts with discovery, goes through a learning and needs understanding stage, then a proposal that solidifies the tradeoffs, and finally closing. If the salesperson is really good, they will even show the customer how their offering delivers more value, meaning greater economic benefits per dollar expended than all other offers under consideration.
So, if the science of management has proven that good selling isn’t magic, it is process and work. Methodical Effort. Why do companies see salespeople as magical creatures?
Because they are sales driven – which isn’t bad when times are good but disastrous when the wind blows.
Sales Driven for a While
In sales driven firms, sales drives strategy. Who salespeople know, where they are, and what they need determines the strategy of the firm. It determines goals and priorities of both marketing communications and operations. As for prices, they are set to close business competitively. As long as margins are manageable, finance will let the deal go through.
Sales driven strategies aren’t bad when things are good. When opportunities are plentiful and margins are strong, the main limiter of firm performance is engaging those opportunities and closing business. As such, adding more salespeople and catering to their needs is somewhat sound approach to running the business.
But things don’t stay great forever (unless you are in a government protected industry, and then you have other challenges). Eventually, competition enters and margins get squeezed. This is the virtuous nature of capitalism. (Now you see why I excluded government protected industries.)
Most companies have to become market driven eventually.
Market Driven for Sustainability
In market driven firms, market opportunities drives strategy. Market opportunities are defined by the target market, and preferably target segment(s) within that target market. Market opportunities are further defined by the offerings those target segments demand, the price they are willing to pay, and the best approach to engage those target segments attention and buying behavior. Once defined, market opportunities are evaluated and scored according to the resources required to capture the opportunity, the risk or likelihood of success, and the value of the opportunity once captured.
Market driven strategies enable a firm to exploit good times and survive through rough periods. They acknowledge that the natural breadth of the firm is constantly evolving, both in market reach and offering breadth. Hopefully expanding, but at times retrenching in preparation for the next opportunity.
In market driven firms, top salespeople are still valued. But, they aren’t seen as magical. They are seen as an integral part of a larger, organization wide, effort to serve customers profitably. It isn’t their personal contact base that drives performance, it is the company’s strategy and support that enables them to develop opportunities and close sales. Maybe you seen this too?
- It seems every author has their own name for the sales process and process steps. I am not playing favorite here and deliberately left it ambiguous.