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.