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April 2011

Why Growth Drives Sales Effectiveness Solutions

Blog-image David Cichelli, Sr. Vice President of the Alexander Group, reveals a compelling truth in his new book The Sales Growth Imperative (McGraw-Hill): Market conditions drive sales effectiveness solutions. In this guest post, Cichelli challenges sales leaders to stop chasing fads, resisting change, and under-managing their sales force.

Sales leaders seldom have the luxury to be strategic planners. Why should they? Sales objectives provide enough context by telling sales management what’s important. Often, it’s only: “Sell more.” Simple enough -- but wait, there’s more. Sales objectives always come with lots and lots of additional goals such as selling certain types of products, selling at preferred prices, retaining customers, beating competitors, selling to new customers, reducing costs, improving sales productivity, supporting marketing campaigns and—whew—the list continues. While sales executives don’t need to be strategic product portfolio planners, they do need to be sales strategists. Why? Because sales leaders must make wise decisions to achieve these escalating and often divergent goals. 

Exceptional sales leaders pace the ramparts looking for ways to improve sales performance. For example, improving current practices offers immense opportunities. And improving sales time is a no-cost uplift. Changing job roles and coverage strategies are viable considerations. Investing in new sales enablement technologies is alluring, too. Each year, forward-looking sales executives develop a list of improvement objectives and program investments. It might include increasing headcount, changing internal processes, upgrading reporting, adding an inside sales force or investing in social media. It might also include cutting back, reducing customer counts and lowering sales support for select products. There is no shortage of ideas. Sales leaders get plenty of advice from executive management, product divisions, region management, internal staff and vendors, all of whom are at-the-ready to promote their passionate suggestions. Regardless, the buck stops with the vice president of sales. Sales leaders must make these forward strategic decisions correctly.

“There often seems to be more solutions than problems.”

But correctly selecting and deploying the right sales effectiveness solutions has challenges. First, unchecked, current practices have often run amok. Staff levels have grown. Programs have become complex. Effectiveness has dropped. Second, the current organization resists change. New ideas are too risky. Comfort with current practices is high. And, third, it’s not clear what will work and what will not work. There are some very appealing technology solutions, training platforms and new compensation programs.  In fact, there often seems to be more solutions than problems.

To avoid sales force obsolescence and make the right sales investment decisions, sales leaders need to select solutions consistent with the company’s phase of growth: 

Phase I: Start Up. Sales departments in start-up companies have two simple objectives: sell as much as possible and proof-test the best sales approach. Keep the sales department simple and flexible. Hire smart and aggressive sellers. Learn by doing: Discover what works and quickly discard what does not work. Grow sales to reduce unit costs and watch as profits appear. Avoid costly sales investments.

Phase II: Volume Growth. During this period of scaling growth, simply replicate what works. Increase staffing support. Add execution tools. Implement a simple but accountable sales reporting system. Sell the “shared vision of success” to the sales force. And, frankly, just do more of whatever is working.

Phase III: Re-Evaluation. Oops, everything that made you successful as a scaling sales force during Phase II is most likely a liability in Phase III, Re-Evaluation. As growth rates decline to less than 10%, due to market saturation, competition and product displacement, scaling-silo solutions often doom the once successful sales department. Sales growth productivity declines. Price selling prevails. And, the sales force is often over-staffed. Sales management needs to make the following investments: finding lower cost sales channels, stepping-up performance management and adopting margin improving solution selling.

Phase IV: Optimization. At this stage of growth, the company is really a compendium of various products, some launching, some scaling, and some declining. Management discovers “not all business is good business.” Here the sales force must become “opportunity segment,” focused on deploying the right resources to match the buyer population, product type, and phase of growth. Promising segments are tested. Scaling segments get investments and perhaps dedicated resources. And mature segments see their costs reduced and sales fulfillment off-loaded to others. 

Sales effectiveness solutions are not universal, they are situational. Before chasing a solution or adding one more program, ask: “How will this solution help us realize the best outcome given our stage of growth?” Sales leaders who deploy the right solution at the right time will continue to ensure the success of their sales department.

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7.5 Million CRM Failures on Google Search

Here is an interesting set of numbers. Totally unscientific, but interesting. I searched for "Microsoft" in Google and got 1.05 billion results. Then I repeated the search and entered "Microsoft failure" and got 36.3 million results. Sounds high? Not as high as some of their competitors. The biggest surprise: Salesforce.com is the clear winner of this (unscientific) comparison. See for yourself and check your company's failure percentage.
 
CRM 86.3 million results
CRM Failure 7.5 million
Failure percentage: 8.7%
 
Salesforce.com 36 million results
Salesforce.com failure 701,000 results
Failure percentage: 1.9%
 
Microsoft 1.05 billion results
Microsoft failure: 36.3 million results
Failure percentage: 3.46%  
 
SAP 155 million results
SAP failure 18.6 million results
Failure percentage: 12%
 
Oracle 162 million results
Oracle failure: 24 million results
Failure percentage: 14.8%

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Are You Maximizing Sales & Marketing to Create Customers?

I asked a simple but big question on Monday to an audience of nearly 200 sales leaders in Scottsdale, at our Sales & Marketing Leadership ConferenceWhat is the purpose of a business? 

One great answer is from Peter Drucker, who famously said that the purpose of a business is to create a customer.

But we are no longer a manufacturing economy. We are a SERVICE economy. According to the World Bank, 76% of our GDP comes from service jobs. Salespeople are no longer the owners of information. Instead, we are all swimming in the same ocean, which is full of savvy consumers who crave better experiences even more than they crave better products.

We heard from many incredibly talented speakers and panelists at the conference who offered an exciting preview of the future, where new technologies and processes will work together so we can put the customer into the hub of our activities. What stands out most in my mind, however, is that organizations that want to win must find a way to get sales and marketing to speak with ONE voice. Ideally, sales and marketing leaders should be able to complete each other’s sentences. They need to do the following:

  • Come up with a common definition of a lead. 
  • Make marketing accountable for measurable metrics (some companies are making marketing responsible for part of the sales team’s quota).
  • Make sales accountable for working WITH marketing to get quality leads (David Heath, retired VP of Global Sales at Nike, said he quickly learned in his career that taking a marketer along on a sales call to hear the word “no” from the client’s mouth was a great lesson in believability) 
  • Make sure that both sales and marketing are tracking the right data and KPIs. It won’t do you good to track hundreds of KPIs. Focus only on the five or six that will drive your business.
  • Turn your company Website into an inbound marketing machine.
  • Maximize the efficiency of your team by bringing on people who understand technology from the ground up.

In the last two years, we have seen more major changes in sales process than in the last 20 years. And I predict that more than 15 million sales jobs will disappear over the next 18 years. At the same time, however, I believe that there will be an explosion in sales-support jobs, where sales organizations have a team of customer-facing specialists that will make it easier to create operational efficiencies and higher customer satisfaction.

That’s why sales & marketing alignment will be fundamental to the sales team of the future. During one of our panel discussions, Steve Richard, of Vorsight, said it best: Sales & marketing alignment is the traction point where you’re engaging with customers. That’s where we need to look to drive faster and better growth.