Geonexus

Improve your Sales Productivity

What Flavor of Content Will You Publish, Fast or Good?

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California Ranch Country - Loren Kerns

Charlie Bilello, the Director of Research at Pension Partners, LLC, captures the essential differences between the two types of web content: Fast Content and Good Content. What choice will you make?

Fast Content vs. Good Content

Fast content is timely. Good content is timeless.

Fast content seeks clicks. Good content seeks conversation.

Fast content induces fear and greed. Good content helps you overcome these emotions.

Fast content is self-promotional. Good content is self-aware.

Fast content assigns blame. Good content takes ownership.

Fast content is fleeting. Good content is cumulative.

Fast content makes you react. Good content makes you reflect.

Go visit Charlie’s full list here. Choose carefully.

Three Tactics You Can Adopt Today to Improve Inside Sales Productivity

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In addition to the sales process engineering changes that Levitt Safety made (see the Levitt Safety case study), they also implemented three tactical practices that directly improved the productivity of their inside salespeople.

Direct sales supervision

Levitt has learned that a manager for an inside sales group must provide lots of hands-on supervision. Instead of sitting in an office, their sales supervisor sits with the inside sales reps. The supervisor sees everything that’s happening, gives direct feedback, and y-jacks into their calls.

We ended up bringing in a manager with experience managing inside sales and rather than sticking him in an office where the previous manager had been, he’s in the pit with the rest of the inside sales group. So he’s hearing everything that’s going on, he’s seeing everything that’s going on, and he’s available for quick chats. What he actually does is once or twice a month he will spend an entire day with the rep in the same way that a traditional sales manager will go out and make field sales calls for an entire day with a rep. But instead of going out on calls, our new manager sits down at the desk with the inside sales rep and spends the entire day with them. He watches them, coaches them, mostly listening and then at the end of the day provides feedback on what he’s seen.

Role-playing

Levitt also uses role-playing to train and coach their inside sales reps. When you have to make decisions and act quickly, you don’t have time to think about how to perform. You need to respond quickly and know what to do.

John Buelow of the Shapiro Negotiations Institute explains that the use of role-play in training has three benefits:

  • It builds confidence through the simulated experience with many different situations.
  • It develops listening skills because participants must not only listen to the words, they also have to pay attention to body language and other non-verbal cues.
  • It fosters creative problem-solving as salespeople encounter novel and difficult situations.

Although Levitt Safety has used role-playing to train their salespeople, they admit they are still learning. In particular, they have realized that it’s better to first have a trained actor or consultant demonstrate the role, then let the salespeople try it.

Role-playing is now something we’ve implemented as a standard part of when we do sales training. We’re less then perfect at it, to be honest. I believe role playing is important to internalize the learning. I’m also starting to realize is that it you don’t want the blind leading the blind. Initially we would do a segment in the sales training session, then we would invite a couple of people in the audience to role-play based on what they learned. Unfortunately, often it was pretty poor, although they would get a nice ovation at the end of it. What I try to do now is that at the end, have the person who is actually doing the training do the role play first so they can actually see how the training translates into a sales call by a person who actually knows what they are talking about. Then after that you can invite the audience to take part.

In addition to hiring consultants and actors, Buelow recommends that companies use actual locations, record the role play so salespeople can see themselves, and imitate real work scenarios.

Protected calling time

Without some protected time for calling, inside sales reps are vulnerable to a constant stream of interruptions from people and electronic messages. These interruptions make it difficult to get into the zone of deep work that’s required to make multiple calls to customers. Levitt instituted two protected times per day for their inside sales reps, once in the morning and once in the afternoon.

We bought big foam hand-things that inside sales reps put up to ward other internal people away from our sales team. We wanted them to have an hour and a half of pure calling time to just bang out a whole bunch of calls. Otherwise there is so much that can distract an inside sales person in terms of responding to email, responding to internal messages, responding to people who walk over to their desk. We wanted them to get into the zone and get focused. That seems to have worked well for them to have both a morning and an afternoon calling time.

Sales process engineering takes time and experimentation. While you are working on the long project of shifting sales from craftwork to teamwork, you can implement these three tactics right now and see immediate results.

Is Lack of Sales Training the Problem?

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Many articles are written each year about the importance of sales training. Most of them assume that problems in sales can be fixed if salespeople are better trained.

Yet it is worth asking these two questions:

  • What problem do we address with sales training?
  • Is training sufficient to solve it?

Usually advocates of sales training identify sales productivity as the main problem. If salespeople were more highly trained, they could sell more revenue to more customers in a shorter amount of time.

But wait, is lack of selling skill the primary cause of low sales productivity? And how productive should salespeople be anyway?

Let’s answer the last question first. The best predictor of sales productivity is the number of meaningful sales conversations that a salesperson conducts each day with customers. The guidance from Justin Roff-Marsh suggests that field salespeople should be able to conduct four meaningful selling conversations per day and that inside salespeople should be able to conduct thirty.

Yet most salespeople do not come close to meeting this number. Why? Are they not competent at their work? Are they not motivated enough?

No, these are hard-working professionals. The problem is not competence or motivation, it is in how their work is structured.

Look at the activities of most salespeople. They include prospecting, selling, solution design, account administration, and customer service. It’s simply not possible for a field salesperson to do all those activities and conduct four meaningful, on-site, selling conversations per day. And the same goes for an inside salesperson whose goal is to conduct thirty conversations per day.

So let’s say that we changed the structure of the salesperson’s work. What would that look like? Another team would be responsible for identifying, nurturing, and producing enough sales opportunities for each salesperson. Other (less expensive) people would be given the tasks of customer service, account administration and solution design.

If these changes are made, salespeople can focus their time on meaningful selling conversations. With plenty of opportunities to pursue and without the distractions of other non-selling tasks, your salespeople may have no trouble meeting their goals.

If they are having trouble, you now know it has to do with their selling. You can identify where people are struggling and if more training is warranted, you can make that investment.

Case Study: Levitt Safety Implements Sales Process Engineering

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Levitt Safety, the largest Canadian specialist in safety and fire-protection products, has spent the last four years working with Justin Roff-Marsh to adopt a Sales Process Engineering model. It has reduced the number of field salespeople and has shifted their work to inside sales and customer service. While Levitt made these dramatic changes, it saw no initial decrease in sales, it gained more control over its growth, and it achieved significant improvements in customer satisfaction.

Justin Roff-Marsh interviewed Bruce Levitt and Fraser Gibson at Levitt Safety about their adoption of SPE and published the interview on his site. In this article we’ll look at Levitt’s sales model before and after their implementation of Sales Process Engineering.

The Sales Model at Levitt Safety Before SPE

Let’s start by examining the sales model they were using four years ago.

Levitt Case Study - Before SPE

As Levitt and Gibson explain in the interview:

If I were to wind the clock back, I’d say we’ve been in the inside sales business for probably ten years. Our inside sales group in Ontario operated with a traditional format that many companies in our industry have adopted. That is to say, they have their clients and they do business their way. In addition, you have the classic tiering of accounts, where you have house accounts that dealt with customer service,  you have small and mid-sized accounts that dealt with inside sales and finally you have field sales who are supposed to be dealing with the the biggest opportunities.

The sales process at that time was extremely unstructured:

The only structure for the field salespeople was “Here’s a list of the accounts you call on. What you choose to do is your own business. It would be kind of nice if at the end of the year you reached sales that approached your quota.” And the inside group operated in much the same way, they just had a bigger list of accounts. We weren’t tracking or enforcing anything in terms of who you need to be speaking with, here’s what you need to be talking about, here’s the number of calls that you need to be making a day.

Although marketing produced campaigns, salespeople felt no obligation execute those campaigns and marketing never knew if they were giving salespeople what they needed to be successful.

Every once in a while we would say “It would be really nice if you guys would go out and promote “X” and typically the response would be crickets, so I have no idea if they were doing it or not, more often I expect there was a lot of lip service and then “Let’s go back to doing what we are comfortable with.”

Problems with the Old Sales Model

If you are looking at Levitt’s old sales model through the SPE lens, it’s not hard to make a list of problems with their model.

  • Lack of sales opportunities. Marketing produced some campaigns,but there was no measurement to verify whether they were useful campaigns for sales. Sales was free to use the campaigns (or not). Salespeople were responsible for their own prospecting in their territories. The company had no way to know the quality of the prospects they discovered nor how much of salesperson’s time this required.
  • Not enough time selling. Salespeople were responsible for prospecting, selling, customer service and account administration. These responsibilities did not allow them to do what they are best at, engaging customers in meaningful selling interactions.
  • Stove-piped account assignments. Since field sales, inside sales, and customer service each worked on their own accounts, there was no possibility to use each other’s resources more efficiently. Some small companies had opportunities that warranted a relationship with a field sales rep who could go to the customer site, but that never happened since inside sales owned the small business accounts. Conversely, many transactions at the enterprise accounts could have been conducted more quickly and efficiently by inside sales or customer service, but field sales owned those accounts and so they were responsible for all transactions, from the complex to the routine.

The Sales Model after Implementing SPE

Now that we’ve looked at the way Levitt conducted business four years ago, let’s examine the changes they’ve made and the impact of those changes on their business.

Levitt Case Study - After SPE

  1. Inside sales initiates all outbound communication with all customers. This includes enterprise, small/medium business, and house accounts.
  2. Sales does not do its own prospecting. Campaigns for both new and existing customers originate in the marketing promotions team. Marketing releases a campaign to inside sales and they execute it. By working together they enable inside salespeople to have 30 meaningful sales conversations per day.
  3. All customer service questions and issues, regardless of account type, are fed to customer service. Customer service has gone from taking many days to complete a customer service issue to completing them in one day.
  4. People in the field include both field specialists (product and technical specialists) and business development managers (sales) who reach out to customers at the request of inside sales.

Although the interview does not go into the details of their financial result from this transition, Levitt and Gibson reveal the general financial trends in their interview. Sales is growing steadily as they continue to reduce the number of people in the field. Customer satisfaction has increased. And the management at Levitt has a much better sense of control over the direction and the pace of their business growth.

Should Sales Be Engineered from the Outside-In or the Inside-Out?

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A story:

Our company makes specialized pipe fittings. When our company first started, everybody worked at the main site down in the industrial district. Even the salespeople worked there behind a counter. Customers would stop by to pick up parts they needed. They could get answers to questions about problem situations and learn about new kinds of fittings. As we started to grow, some of the salespeople would go out to job sites and talk to customers there. They learned a lot about how customers use our product and what they needed from us.

Gradually more and more of the salespeople spent most of their time away from the corporate office. Some of them even relocated to distant cities so they could serve those customers better. They became a kind of independent business-person because they did everything—they found new customers, educated them, took orders, and answered service questions. Sometimes they even helped design new solutions that required engineering to get involved.

Sales Used an Outside-In Business Model, Everyone Else Worked Inside-Out

In some ways it was like we had two companies. One of them operated from the inside-out, the other from the outside-in. What do I mean by that? Let me explain.

Take the accounting department. In the early days we had a bookkeeper who tracked all the accounting activity—payables, receivables, payroll, and cost-accounting. Over time as we expanded we added people who each specialized in one of these areas. With the division of labor each person became very good at their specialty. We developed a well-defined process for completing the accounting work each month. Each person understood how their work was scheduled to complete their tasks on time. When necessary we would go outside the company for additional specific services like taxes and financing. It’s an inside-out model.

Sales on the other hand operated from the outside-in. We would add salespeople in different regions and each of them essentially had the same job because they each did everything in their territory—prospecting, selling, servicing, and administration. On complicated or unusual situations they would reach into the corporate office to get help on a specific solution design or approval for special discounting.

Of course, sales was the only department that operated this way. Everybody else—production, new product engineering, legal, human resources—operated with an inside-out model.

I think the salespeople liked it. They were all independent types who enjoyed working on their own and running their own small business. Of course, they often made our lives a little too exciting with their requests for product changes, for special discounting, and with the rush of orders they sent us at the end of every month.

The World Changed and So We Changed Too

More recently though, sales has started to change in our company. Two external forces caused this change. One was that more and more customers needed engineering changes for their specific situation. These requests caused both engineering and sales to get bogged down in the solution design and prevented them from completing their other work.

The second change was communication. It just became less and less necessary for the salesperson to visit the customer site. In fact, customers actively worked to prevent salespeople from visiting because it took too much of their time.

To respond to these external shifts, we have begun to make some changes.

First, we added customer service people at corporate to handle all the routine transactions, mainly generating quotes, entering orders and responding to customer issues.

Next we added some inside salespeople. These salespeople do nothing than conduct meaningful selling conversations with customers via phone, email or text. It was surprising how many customers actually preferred talking to the inside sales reps. The calls were faster and they could easily add an engineering specialist to the call if they needed it.

By this time we stopped hiring new field salespeople because so much of the work was being done by customer service and inside sales at corporate.

Some Surprising Benefits from Our Changes

Something else happened that surprised us. It became easier to hire young people out of college. In they past these potential recruits were turned off by the freewheeling sales culture and by the need to work remotely. They wanted to work with other people. Once we we started talking to them about our customer service and inside sales groups, they became a lot more interested.

We began to learn that sometimes inside sales would run up against a technical roadblock with the customer. In these situations we would send a technical field specialist out to the customer to solve the problem. Their purpose was not to conduct critical selling conversations, those were left to the inside salesperson.

More and more of our customer interactions were being conducted by customer service and inside sales. However, we still had some large customers that needed a field salesperson to visit their site. So we have continued to employ field salespeople, but we made one crucial change.

Instead of structuring the work of the salesperson so that they planned and scheduled their meetings, we assigned a business development coordinator at corporate to schedule these calls. The customers loved it because they didn’t have to play phone tag with the salesperson to schedule the onsite meetings. And although the salespeople resisted at first, they began to prefer this approach also because the business development coordinator acted as a kind of executive assistant for the salespeople. The salespeople were relieved from all the scheduling and could focus on their selling activities.

Full Circle: Sales Is Now an Inside-Out Organization

Now we’ve come full circle. Like the other departments in the company, the sales group has adopted an inside-out model. The core transactions are conducted by the internal teams in customers service, inside sales, and by the business development coordinator. We go outside corporate (though still within the company) when we need the services of a field specialist or a field salesperson (business development manager).

We’ve reduced the number of salespeople. Customers are happier and so is the staff. We are meeting our forecasts. And most important, because people are working at corporate in teams, we are seeing many opportunities to improve the process we use to find, win and keep our customers.

How to Start Tracking your Critical Sales Metric: Meaningful Sales Interactions

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Most advice about sales metrics treats the work of the salesperson as though it is a black box. These advisors recommend that sales managers track how much goes into the black box (open opportunities, deal size), how much comes out of the black box (closed opportunities, win rates) and how long opportunities spend inside the black box (sale cycle).

These metrics track the flow of work that passes through the black box of sales work. But they provide little information about what is happening inside the black box. They ignore that the sales process consists of a series of value-adding steps and they fail to measure these incremental steps. They make it impossible to anticipate the results of sales activities and to make adjustments to the process.

If you were to look inside that black box, the first thing you would see is that multitasking is killing the productivity of your salespeople. Instead of spending all their time negotiating sales, most of their time goes to administrative tasks, account management, proposal generation, prospecting, and fulfillment logistics.

Empower Salespeople to Focus on Selling

The first step to improve your sales results is to cease treating the work of sales like a black box. You can do this by dividing the labor of sales so that salespeople spend more time negotiating sales and less time on other tasks. Delegate the other tasks to less-skilled and lower-paid individuals. In the case of prospecting, delegate the work to an organizational system of generating opportunities.

Now that salespeople can focus their efforts on selling, your growth will primarily be a function of the number of meaningful selling interactions (MSIs) that your salespeople conduct each day. Therefore Justin Roff-Marsh explains, this is the activity that you need to measure obsessively.

Obsess on Volume of Meaningful Sales Interactions (MSIs)

How do you agree on the definition of an MSI? Rather than try to agree on exactly what constitutes an MSI, it may be easier to eliminate all the interactions that are not meaningful (leaving a message, agreeing to call back later, dropping off some paperwork) and then start tracking everything else.

To successfully track MSIs, you must insist that your salespeople record all of their MSIs. Salespeople may be reluctant at first, but will get on board with this requirement once you start running daily work-in-progress (WIP) meetings.

WIP meetings should be stand-up meetings 20 minutes in duration. They should consist almost exclusively of a review of the work that your team members are performing along with some role-playing. You should run these WIP meetings daily for your inside sales people and twice weekly for your field reps. Field reps can join via videoconference if they are remote.

Once you’ve recorded each person’s MSIs at the WIP meeting, you can shift the conversation from the topic of activity to a conversation about the status of the opportunities that each person is pursuing.

You can’t discuss every opportunity that every salesperson has open but you can select two or three notable opportunities for each salesperson in each meeting and discuss them. You want to get through but ask tough questions that expose each salesperson’s understanding of their potential client situation, the logic behind the solution they’re proposing, and what they’re doing to maintain the velocity of each sales opportunity. The final component of your group meeting should be a quick role-playing exercise where you drill critical communication techniques.

Although the primary purpose of the WIP meeting is to track MSI activity, you can expect many additional benefits from these meetings. The simple act of recording activity and discussing opportunities will likely cause an incremental increase in sales activity levels and in sales volume.

As you shift the work of sales from craftwork to teamwork, go inside the black box and start measuring the volume of meaningful sales interactions.

The Most Important Resource in the Campaign Process: A Promotions Committee

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Salespeople depend on a consistent flow of sales opportunities in order to be successful. A tactical approach to sales campaigns will not produce the number of opportunities that they need. Only a small group of senior executives from various parts of the firm can examine the external competitive landscape, draw on the company’s internal resources, and develop compelling campaigns.

Roff-Marsh calls this group the promotions committee and says that its success is a vital component of successful campaigns. Let’s look at how Roff-Marsh explains the work of the promotions committees.

The campaign process is coordinated as you’d expect by the campaign coordinator. However, the most important resource in this process is not a person but a committee. We call it the promotions committee. In addition to the campaign coordinator, the promotions committee includes a number of senior people. Typically these people are the head of marketing, the head of sales, and the head of new product development. In small organizations the CEO should definitely be a member of this committee too. The job of the committee is to conceptualize campaigns. In this context think of a campaign as an initiative, like a military campaign as opposed to a piece of promotions collateral. Each campaign has three critical attributes. First there’s the offer and the market segment, what you’re selling and to whom exactly you intend to sell it. Second is the ultimate proposition, a proposition so powerful that your prospect will ultimately be compelled to purchase. And third there is the initial proposition, the initial commitment will be asking the prospect to make at the first point of contact. These three decisions provide the campaign coordinator with what we call a campaign concept.

Most companies find it challenging to form an effective promotions committee. But it’s a critical component of a successful campaign strategy.

You really must understand that sales opportunities are primarily the result of the ingenuity of this promotions committee. It’s up to this committee to formulate compelling offers, to match these offers with appropriate market segments, and then create traffic stopping propositions to solicit prospects engagement. The campaign process is a powerful one, but for it to function effectively you need regular committee meetings. You need members of the committee to be high-level individuals who are fully engaged. And you also need a feedback loop to enable a process of ongoing improvement. This feedback loop ensures that the campaign process is an ongoing experiment, one that evolves with each iteration.

The feedback loop is super important for two reasons. One is that markets shift and the promotions committee has to respond to changing conditions. And second, most executives have little experience with the creation and execution of successful campaigns. They are climbing a steep learning curve and they need constant feedback to see how they are doing.

Successful campaigns will require a number of departments within your organization to work closely together. The most effective campaigns are the result of engineering, production, logistics, finance and sales all working together to formulate offers that your customers can’t refuse and your competitors don’t dare emulate. This takes practice, a lot of practice. The feedback loop is important because it enables a process of ongoing improvement.

Companies need a promotions committee to formulate and execute promotional campaigns. Just as a committee of executives makes important decisions about policy and investment in production and new product development, a similarly strong committee needs to be in place to make important decisions about sales campaigns.

Should Your Salespeople Be Prospecting?

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Organizations that are starved for sales opportunities (which apparently is true for about 70% of companies) are tempted to put pressure on their salespeople to create more opportunities. They rationalize that since the salesperson’s job is to sell, the job also includes the work to find new prospects.

Here’s the logic behind their argument. Because salespeople are the ones in the company who have the business sense and the ability to influence other people, they are also the ones who are in the best position to discover new relationships and to create new opportunities out of those relationships.

After all, salespeople know the industry trends, they have the experience with customers, and they know how to transition a prospect from stranger to trusted counselor.

This way of thinking ignores some additional important considerations about how salespeople. Let’s look at those and see if we still want them to be out there prospecting.

What are these other considerations? First, salespeople are expensive. Each one required a big investment on your part and you want to keep them focused on selling, not on activities that take away from their selling time.

Second, prospecting requires sustained, centralized resources to generate enough selling opportunities. An inside salesperson needs enough opportunities to conduct 30 selling conversations per day and an outside salesperson needs enough to conduct two to four conversations per day. Salespeople on their own simply don’t have the resources to produce this many opportunities for themselves. Better to keep them focused on their selling conversations where they are most productive.

If salespeople aren’t going to be doing your prospecting, who should be doing this work? After all, you’re still starved for opportunities.

In a webinar, Justin Roff-Marsh explains that if you want to keep your salespeople busy with selling conversations (and you do!) then you’ll need to invest in campaigns that can produce those opportunities. These campaigns require four steps:

  • Number one, your promotional committee should review your historical data and come up with a campaign concept.
  • Number two, your campaign coordinator should compile a list of prospects you intend to target. These can be existing customers or potential ones.
  • Number three, you should write your pre-approach email, the email that precedes the initial contact from a salesperson or business development coordinator.
  • And number four, your campaign coordinator should broadcast the pre-approach email to a small batch of prospects and then create an opportunity in your CRM for each.

Generating sales opportunities is a big job. Your company’s growth depends on doing it successfully. Once you’ve mastered how to run campaigns, you’ll be able to keep your salespeople busy selling. You’ll have no need to ask them to do their own prospecting.

What Are the Primary Objections to a Division of Labor in Sales?

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In order to address the problem with underperformance in sales, we’ll have to challenge the assumption that autonomous  sales agents should bear the primary responsibility of sales performance. This assumption, more than any other cause, is leading to significant underperformance in sales.

If we challenge this assumption then we can divide the labor of sales—prospecting, selling, administration, solution design and customer service—among members of a coordinated team. Salespeople will be responsible for selling, other people will specialize in the remaining tasks.

Production and engineering made this shift long ago and they experienced dramatic performance improvements. But these improvements did not come easily. Craftspeople opposed the division of labor in manufacturing every step of the way.

Similarly, salespeople today object to dividing the labor of sales among members of a coordinated team.

Justin Roff-Marsh says you are likely to hear two primary objections:

  1. Complexity. Sales is complex in most environments nowadays. You have multiple influencers and decision makers. You have numerous conversations with multiple parties spanning weeks or months. This complexity does not lend itself to division of labor.
  2. Personal relationships. People buy from people. No one likes to transact with a machine. The division of labor will destroy the critical personal relationship between the salesperson and the customer.

How does Roff-Marsh respond to these two objections?

To the first objection, Roff-Marsh concedes that selling today is complex. But is that alone a good reason to avoid the division of labor?

If this objection were valid, then we would expect to see the division of labor fail in the production of more complex products like jet aircraft. In fact, these products could not be built without a division of labor.

Now what about the critical relationship between the salesperson and the customer? Although it’s true that good relationships are an important part of business, Roff-Marsh asks, “which comes first—the sale or the relationship?”

Customers today do not want to initiate their buying cycle with a personal relationship. As they recognize their problem and investigate possible fixes, they search out information that can help them. However, most buyers do not want a relationship at this early stage. They read articles and educate themselves on the subject. Then later in the cycle they become ready to talk to a salesperson.

Roff-Marsh comments “The reality is, for the most part, that the salesperson’s relationships are the consequence of sales, not their first cause!”

Further, although sales makes an important contribution to the initial sale to a customer, subsequent transactions that retain customers are due more to product quality and ability of production to deliver on time.

So it turns out that the primary objections to the division of labor, sales complexity and personal relationships, are not good arguments to oppose the division of labor in sales and the dramatic increase in productivity that follows.

Why Is Sales Underperforming?

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Most sales organizations report that they are underperforming. It’s not that sales is getting worse, it’s that other functions in the company like production and new product development have gotten so much better. Decade after decade, these functions continue to show dramatic productivity gains.

In this article we’ll look at why sales organizations underperform and where they can look to improve their performance.

Let’s start by making one thing clear. Sales managers work hard each year to improve the performance of their team. Unfortunately, their efforts only address symptoms on the surface.

Michael Webb calls these the “usual fixes” and says they include:

  1. Replacing the sales manager or salespeople
  2. Trying a new type of sales training
  3. Launching a new lead-generation program in marketing
  4. Installing or upgrading customer relationship management (CRM) or sales force automation (SFA) software
  5. Changing the incentive plan or holding a sales contest
  6. Reassigning accounts or redrawing sales territories
  7. Hiring a new ad agency to tweak the brand image

Webb explains that the usual fixes fail to fix sales underperformance because they don’t identify and address the underlying problems.

And what are the underlying problems?

According to Justin Roff-Marsh, most sales organizations endure this primary underlying problem: salespeople don’t spend enough time selling. They simply don’t engage in enough meaningful sales conversations each week.

How could they? Even though the number of meaningful sales conversations that a salesperson conducts is the best indicator of sales performance, salespeople are saddled with a host of other tasks each day. Not only must they schedule meaningful sales conversations, they must also complete administrative and customer service activities, solution design, proposal development, and prospecting.

Why are salespeople saddled with so many tasks in addition to selling? Because we have asked them to act as autonomous agents. As agents, they do everything. Their job tasks include not only selling, but also all the other tasks associated with the sales function.

This organizational structure makes sense only if we look at the history of industry. Most companies in the past had a simple value chain. They produced a stockpile of inventory and salespeople sold from this stockpile. Products were standardized so salespeople could fulfill orders immediately.

As salespeople visited customers in their territory they had nearly complete autonomy over their work.They were far away from company headquarters and communication was difficult. Consequently, they were given full responsibility to visit customers, answer product questions, take orders, and solve customer service issues.

However, the days of simple value chains and make-to-stock business models are gone. Instead of make-to-stock, most engineering and technical companies have adopted make-to-order or engineer-to-order business models.

This shift in business models has caused significant changes in both the responsibilities and the behavior of salespeople.

Make-to-order and engineer-to-order business models make it more difficult for salespeople to act autonomously because they must interact more often and more directly with the production and engineering functions.

Dramatically improved communication makes it possible for salespeople to interact closely with production and engineering. Improved communication also reduces the requirement for salespeople to be geographically near their customers.

And finally, companies with a make-to-order or engineer-to-order business model must form relationships with potential customers well before they make their first sale. They must educate and build trust with customers, activities that are best conducted by a centralized function like marketing or sales, not a salesperson in the field.

All these changes lead inexorably to an unavoidable conclusion. It’s time to challenge the assumption that autonomous  sales agents should bear the primary responsibility of sales performance. This assumption, more than any other cause, is leading to significant underperformance in sales.

If we look at the production and engineering functions, we see that they challenged this assumption long ago. In the nineteenth and early twentieth century, production organizations across many industries shifted from craft work to highly organized manufacturing teams. Engineering and product development organizations also shifted away from individual craft work to the work of teams.

Sales organizations are the last holdout to make the shift away from autonomous agents to coordinated teams. If they want to seriously address their underperformance, this is the direction in which they will move.