Go to Sales Operations Effectiveness Workshop for additional details and registration information.

What was the first idea that popped into your head? That’s right... The size of your pipeline. And your next step was probably to compare it to your overall quota. Three times quota? Four times quota? It’s the most classic measure of all, and it is founded on an assumption that has governed most sales forces since the beginning of the profession – Bigger is better.

I have come to believe that this measure of pipeline health is not only misleading, it is also too simplistic. In my firm’s work with companies that are the leaders in their markets, we’ve found that successful sales forces take a more robust perspective on the health of their pipelines. More specifically, they tend to examine three different pipeline characteristics to determine its health, namely, Size, Shape, and Contents. Let us examine each of these traits and the interesting interplay between them.

Size, you might think, is the easiest one to judge. According to our foundational assumption, a bigger pipeline is a better pipeline. However, recent research into pipeline performance revealed that salespeople with smaller sales pipelines are actually more productive than their peers with larger pipelines of deals. At first, this finding puzzled us, but after a little digging it became apparent why this was the case.

The reason why most productive sellers had smaller pipelines was that they were experts at disqualifying bad deals early in the sales cycle. By eliminating those deals that they either didn’t want to win or knew they couldn’t win, they were free to pursue fewer, more desirable deals with greater attention and focus. In fact, the smaller pipeline of active opportunities enabled them to make 20% more prospecting calls, conduct 25% more meetings with prospects, and close 50% more deals than their peers (by dollar amount). All this because they jettisoned the junk from their pipelines and used their time more wisely. As it happens, bigger is not always better.

This strategy of ‘jettison the junk’ also has a profound impact on the second characteristic of a healthy sales pipeline, Shape. If the bad deals are removed from the pipeline early in the sales process, a pipeline that is in good shape will taper dramatically at the early stage. Pipelines that drag a high percentage of deals late into the sales cycle and then lose them towards the end are junk pipelines. These pipelines are fat, but there is relatively little muscle. When it comes to sales pipelines, thin is in.

The final pipeline characteristic that high-performing sales forces obsess over is their pipeline’s Contents. By Contents, we mean the types of customers that are being pursued and the types of products that are being sold. Most companies have a stated go-to-market strategy. That is, they want to sell certain types of products (the most profitable ones) to certain types of prospects (the ones most likely to buy). However, salespeople have the happiest eyes in the world, and any deal can look like a good deal. For a pipeline to be healthy, the Contents of the pipe should reflect the company’s overall go-to-market strategy. There should be a blend of customers and products that mirrors the desired combination for the aggregate sales force. Senior leadership often scolds the sales force for stomping all over their marketing strategy, but management is somewhat to blame for letting it happen. Unless any revenue is good revenue in your company, you’d better keep an eye on what’s coming through the pipe.

In summary, our research and our work with world-class sales forces has shifted our thinking on pipeline health away from the traditional multiple-of-quota approach. As sellers become more effective and go-to-market strategies become more complex, the Shape and Contents of the sales pipelines are just as important and are highly intertwined with the pipeline’s Size. Size, Shape, and Content... Three critical signs of enduring corporate health.

The ride-with concept works for both direct report level and skip-level situations. In addition, the process can be effective for territory reps, key account people, channel managers, technicians and others.

Hill helpfully summarizes how to plan the ride-along day, the rhythm of the day and the follow-up protocol. We hope you find the session useful, and join us for future SMA webcasts.

View archived webcast and download the Managers' Planning Guide (registration required; members please access from the SMA Resource Library here.)

Not a Sales Management Association member yet? Download a copy here after a brief registration form. 

Members skip the reg page and download here: Supply Chain Has an Operations Strategy - Does Your Sales Organization?

But it stands to reason, doesn’t it?  

The reason sales cycles are fast is usually that there are fewer total individuals involved. That includes fewer of your sales team, and fewer unique individuals on the customer end of the engagements.  Fewer people involved usually indicates that deals are smaller. That which can be approved by one or two people is usually smaller than that requiring six or eight people.  

Would it then be prudent for Sales Management to analyze sales cycles within their organizations and keep trying make them shorter? I don’t expect that this is the right goal. In and of itself, a consistently diminishing sales cycle mean is probably not a good thing. Why? Because it is probably accompanied by a diminishing total average deal size within your sales organization. This could mean your sales reps are selling the solution short, going for the quick win.   

How much bigger could the deal be if you allowed them the extra time? There are many variants on this question. Generally speaking, for sales cycles, the goal for sales management needs to be - watching for patterns – determining how long most sales cycles are. And how do sales managers, in this regard, determine how one individual rep compares to the average for the organization, the region or the product?   

How do your new reps compare to your existing reps? This is key for sales managers in reorganizing sales teams or in hiring new reps. Most sales organizations will have some rule of thumb about how long it takes for a new rep to “get up to speed.” But this measurement is very likely tribal and anecdotal. To measure sales cycles by rep, by product; would be a great judge of how long it REALLY takes to get up to speed. I’ll bet most sales organizations would be surprised. 

Net/net, it is a great idea for sales management to measure sales cycles, especially if you can compare it apples to apples across your organization. The question is why? You can motivate your sales teams, better enable them, and better and gauge pipeline - as a result.

John Garrish is VP of Solution Management for the SAP Sales OnDemand solution. Prior to SAP he held senior product management and marketing roles for CRM at Oracle and Siebel Systems. He has a passion for bringing sales management and sales operations in a room and “designing-in” their thinking to make great products.

Many companies are extremely sophisticated in their understanding of end users yet remain uninformed about how their partners -- who actually interact with these end users -- run their businesses. In some circumstances this lack of understanding leads to channel programs that are ineffectual and fail to excite partners. In other circumstances, the lack of understanding results in partnerships with companies that don't even serve the correct markets and target the right customers!
People often assume that pricing and discount structures are all that matters. However, surveys of VARs, resellers, distributors, agents and reps working across a variety of industries consistently evidence that channel programs and channel support rank above pricing considerations when deciding which products to emphasize. Whenever we interview channel participants about why they prefer one product over the other, the answer is invariably that the company is "easy to do business with."  

Finally, having the right mindset is essential to success. When working with clients it is often apparent that the company views their channels as essential business partners and wishes to closely collaborate with them. Sometimes, however, we encounter companies that voice extremely negative and cynical opinions, viewing the channel as a necessary evil or an adversary that gets in the way of the money. As you can imagine, it is very difficult to help build a successful indirect sales engine with companies that embrace the latter, parochial mindset.
 

Certainly, there’s a lot of sound and fury out there about the need to transform Sales. A sample of Google hits on “Sales Transformation” (there are over 51 million to choose from), shows that the term, as inspiring as it may be, has a myriad of connotations and is anything but a clear prescription. Perhaps, it’s time to speak more plainly about what qualifies as serious, radical change (aka transformation), as opposed to evolution. 

In our experience, sales transformations rise out of major changes in business circumstances, such as:

• Mergers and Acquisitions
• Aggressive New Sales Strategies Emphasizing New Customer Segments and Markets
• Major Channel Shifts
• New Product Launches
• Exits from Markets
• Sun Setting Products and Services 

If one, or more, of these factors is not changing your business circumstances, the label of “sales transformation” is inappropriate and overstates the case. If you are like most sales organizations you are working on “sales evolution” - building a pattern of replicable success and discipline at four critical capabilities:

• Identifying and targeting the most profitable, best fitting revenue opportunities
• Covering opportunities with the right number and types of sellers (direct, indirect, inside, etc...)
• Selling to prospects the way they want to buy
• Supporting the sales force with the right tools and resources to increase selling time and productivity
…and the organization needs to master these before pursuing a transformation. 

Remember, there’s a reason why re-engineering projects had a success rate of only 20%.
 

Here's a nice video that explains Poken.

Join us - with your new Poken - at the premiere event for sales force effectiveness practitioners and thought leaders. You'll hear more than 30 speakers on topics that include leading sales transformation, sales coaching effectiveness, developing sales managers, measuring sales productivity, sales-enabling technology, and sales operations effectiveness.

We caught up with Fears and Marone to ask a few questions in advance of the webcast.

[Join us Wednesday August 17 at 2:00 p.m. Eastern US time for the live webcast.]

SMA: Why did you decide to study sales and effective techniques?

Mark Fears: We have noticed that the sales profession has fundamentally changed in the last few years. Customers are smarter, more demanding and the pressure from competitors has increased. Technology has also changed the sales process. E-commerce has made product pricing and information more transparent. Customers now also have global access to alternative solutions with the Internet. Among the goals of this study were to understand how these events have impacted selling – and, in particular, how the skills and behaviors associated with successful sales professionals have evolved. 

SMA: I know you will be sharing the results in the webcast, but can you give us a preview of the significant findings?

Mark Marone: Sure. When we asked respondents to tell us what personal selling attributes were most important, the more successful sales professionals said:

- Be direct and honest in all communications (66% of high performers)
- Treat prospects, customers and partners with respect (58% of high performers)
- Maintain high ethical standards (55% of high performers)

These were rated higher than other attributes on the list, like: “being organized,” “exhibiting tenacity,” investing time and effort,” and “securing needed resources.”

We also looked at actual selling skills, and some of the top-rated ones were:

- Having knowledge of products and services (70% of high-performers)
- Configuring solutions to meet customer needs (64% of high-performers)
- Clearly explaining links between benefits and client needs (63% of high-performers)

This list points to activities that are strategic and reflect need for market intelligence, not just honesty or integrity, for the salesperson. Together, market intelligence and integrity can help a salesperson convey a genuine interest in the client’s business and an understanding of how to help them succeed. 

We will cover these topics and more in the webcast. 

SMA: Did anything come up in the survey that surprised you?

Mark Marone: We always knew that coaching and training were important, but the data showed that these variables have an even stronger influence than we expected on sales performance. One example that stood out for us was the higher amount of training and coaching received, the higher the average deal size and the larger the increase in personal sales revenue. 

Join The Sales Management Association for a free webcast (open to non members) on the AchieveGlobal Sales Effectiveness Study. 

Wednesday August 17 at 2:00 p.m. Eastern US time

The real question, though, is not simply whether to go with iPhone, Android, BlackBerry, or something else. The real question is, what are your organization’s needs? 

That’s a more complex and nuanced question, one that you need to discuss not just inside your sales organization but also in meetings with your corporate peers. It’s not just about cool and powerful technologies, but also about cost of ownership, real productivity, corporate policies, information ownership, security, and how you want your sales organization to present itself in the field. 

To determine your organization’s needs in the mobility space, consider the following 10 questions:

1. Which of my sales personnel should use a mobile device, and what are the top objectives to be covered with a mobility solution? Do your sales representatives need access to the latest information about customers and products anytime and anywhere?

Do your sales managers just need mobile dashboards that can tell them how the team is doing against metrics? Different needs may require different mobile devices and technologies, and it’s important to identify what your personnel need to do.

2. How can a mobile device fix some of the key pain points in your sales organization?

Do your sales personnel complain about lengthy decision-making processes? If your personnel could gain access to key decision-making criteria and workflow information on their mobile devices, you may be able to increase transparency and expedite decision making in the field. 

3. What do different sales roles require in the way of device comfort, functionality etc.? 

There remains a wide range of functionality among mobile devices and services. An iPad may provide a powerful platform for mobile applications, but it may be unwieldy if your sales representatives need only voice and text. Are your personnel willing to carry two devices, a smartphone and a tablet? And what about the question of customer etiquette? I’ve known customers to take offence if a sales representative opens a laptop in a meeting, but an iPad may be perceived as the ideal marriage of cutting-edge and discrete. 

4. What are my company’s security requirements and how will this affect my sales teams? 

Which devices and technologies would violate your company’s security policy? Would your organization be vulnerable if a sales representative lost a mobile device in the field? You’ll need to confer with your IT department and work together to develop a modern policy for mobility—one that can empower your field while protecting your flanks. 

5. Would a hybrid approach to mobility be better?  If you have different user groups within the sales organization—defined by role, perhaps, or geography (or both)—then an approach to mobility that assumes a common device or technology may not suffice. A hybrid solution—involving different kinds of devices and technologies, each one identified with a specific role or geography (or both)—might provide all your sales personnel with the support they need. 

6. Do you want to allow your sales representatives to use (or choose) their own devices?

This approach may cut costs and increase mobile adoption rates, but it also raises its own thorny questions: Who is responsible for managing and maintaining the device? If your sales representative owns the device, can he or she also claim ownership of the information on the device—such as customer lists and contact information? The answer to this latter question turns out to depend on the country in which your employee lives—so it’s important to consider location when addressing this question.

7. Do you or your sales teams need a mobility experience that constantly pushes information to the field?

If your sales team needs the latest information at all times, then a system that aggressively pushes it to their mobile devices is critical. If they do not need that, then technologies that enable them to pull down information on demand may suffice. These approaches can have very different cost of ownership profiles, so a needs analysis on this point is important.

8. Do you need centralized device management?

Do you need the ability to shut down or wipe devices remotely if they are stolen or lost, or if the employee leaves the company? What about the ability to track devices and know where they are? 

9. Do you need mobile application support for your sales teams?

Are the mobile applications readily available that will help your representatives accomplish the goals set out in question one? If so, you’re in great shape! If not, where will you get them? Who will maintain and support them? How will your representatives get these applications on their mobile devices?

10. What flexibility do you need regarding customization of a mobile application?

Do your representatives’ applications need to be customized or configured to meet your organization’s needs? Do you constantly need to enhance/modify the applications to adapt to always changing business requirements? If so, does your organization have the resources to perform that customization? If not, how can you acquire that support?

The mobile space is evolving rapidly. There’s no single answer to the question of what is best for Sales Leaders—it’s what is best for your organization and your personnel. With these questions in mind, you’re in a much better position to discuss how best to meet the mobile needs of your sales organization and develop a business case for the right decision.

Dietmar Bohn is Vice President Solution Management at SAP AG. He runs SAP’s Solution Management for the Line of Business Sales. Dietmar brings more than 10 years of CRM experience from both outside and inside SAP and more than 20 years of industry experience. Dietmar has held different management roles spanning CRM strategy projects, CRM implementation projects, CRM development and CRM product management.

Ever hear this statement before? Or have you even said it yourself? It’s an extremely common refrain, to be sure, but why? The strategy of promoting your best sales talent to manage and develop other salespeople seems completely reasonable. Yet, the practice of doing so has an abysmally low rate of success … abysmally low. 

Perhaps part of the problem is that we don’t have a clear understanding of what makes an effective sales manager. An effective salesperson is relatively easy to describe —they achieve their quotas. But what about a sales manager? 

Typically, managers are deemed effective if the salespeople below them achieve their quotas, but what do managers actually do to help the salespeople succeed? If we knew what makes a sales manager effective, then it would be substantially easier to help good salespeople make the transition to management. 

Research to the rescue 

This very question was recently addressed by three researchers—Dawn Deeter-Schmelz of Ohio University, Daniel Goebel of Illinois State University and Karen Norman Kennedy of the University of Alabama at Birmingham—by way of a study that appeared in the Journal of Personal Selling & Sales Management . Their academic research is not only interesting, but also highly relevant for the numerous companies that have struggled to develop good sales managers. As a bonus, their work also provides some insight into why great sales reps often fail in management positions. The two questions, as it happens, are very closely intertwined. 

Deeter-Schmelz, Goebel and Kennedy gathered their information from the perspectives of the two stakeholders most intimate with the salesperson-manager relationship: front-line salespeople and sales managers themselves. They interviewed at length 58 sales reps and managers across a wide range of industries to garner their opinions on which attributes an effective sales manager possesses and why those attributes are important. The results of the interviews were then compiled and analyzed to identify common themes and key differences.  

Of the sales professionals interviewed, there was a high level of agreement on the critical traits of an effective sales manager. The list of common attributes was:  

•Communication and listening skills
•Ability to manage relationships
•Organization and time management skills
•Knowledge of industry and products
•Coaching skills
•Motivational ability
•Honesty and ethics
•Leadership skills
•Willingness to empower 

In fact, this set of characteristics was noted by both the salespeople and managers using nearly identical language and in very similar rank of importance. The striking uniformity of their responses provides a strong endorsement that these could indeed be the key attributes of an effective sales manager.  

When subsequently asked why these attributes were important, several commonalities also emerged. The interviewees believed these traits would lead to several specific behaviors of an effective sales manager:  

•Communicating clear expectations
•Fostering confidence and trust
•Developing the salesperson’s abilities
•Motivating the salesperson 

These behaviors were considered fundamental to achieving the ultimate goal of a sales manager—improving the salesperson’s performance.  

In sum, this research provides a fairly elegant framework for developing effective sales managers. It tells us that if you develop these key attributes in your managers and encourage these specific consequences, then you can drive improved performance in your sales force. 

While the similarities between the salespeople’s and sales managers’ perspectives provide us with good guidance for developing effective managers, the differences in their opinions provide us with a view of why successful sales reps fail when promoted into the management ranks.  

A theme that became clear to the researchers was that salespeople view the role of an effective sales manager as a supporter of the sales force. For example, managers should use their organizational skills to remove internal and external barriers for their salespeople. A manager’s industry and product knowledge should function as a resource for their reps to tap. Managers should use their relationship and communication skills to understand the individuality of each salesperson and adapt to their unique needs and circumstances. Again, again, and again, the research showed that the sales reps wanted their manager to be an enabler of the selling process. 

In sharp contrast, sales managers wanted to be a participant in the process and have a direct impact on the sale. Interestingly, the sales managers were very concerned about their own credibility and their status as a role model in order to earn the right to engage with the sales rep.  

For example, managers thought that their communication skills and knowledge should be used to demonstrate their capability. Their organization and time management skills should enable them to spend more time in the field. In fact, many sales managers mentioned their own selling skills as a critical contribution to the salesperson’s success, so they could model good selling behaviors for the reps.  

Yet despite the managers’ desire to be the sales hero, not a single salesperson mentioned role modeling or manager reputation as a contributor to their success. It appears that the sales reps did not want a sales sidekick—they wanted sales support.  

Deeter-Schmelz, Goebel and Kennedy had set out to identify the attributes and the importance of an effective sales manager. The feedback they received from the sales managers and reps in their study provide incredibly lucid insights into both the mold for an ideal sales manager and the misunderstandings that probably underlie many failed management careers. Furthermore, they suggest a few actions that we as practitioners in the sales profession can take to build legions of effective managers. 

First, we need to clearly define the role of the sales manager in our organizations. In some circumstances, a ‘sales hero’ might actually be the right role. In other circumstances, it might be a nuisance for otherwise capable sales reps. Either way, the strategic role of the sales manager should be communicated throughout the organization so that everyone’s expectations and behaviors are aligned. 

Second, we need to be thoughtful about whom we elevate to management positions. If the manager is truly cast as an enabler, then a superstar salesperson might not be willing or able to step off stage and support the rising stars from behind the scenes. It should be totally acceptable to leave a star salesperson in the field and promote an average rep, so long as they possess the attributes of an effective sales manager.  

Finally, we need to provide training to our managers that will develop the unique skills they need to succeed. The behaviors and attitudes that make a great salesperson are not sufficient to be a great manager. And some good research has just illustrated the challenge of trying to do a sales manager’s job with a sales rep’s state of mind.

Jason Jordan is Director of Research for The University Sales Education Foundation and Vice President with Vantage Point Performance.

Sales operations leaders typically set sales quota based on historical performance, and a rough estimate of expected incremental growth. More advanced approaches might also utilize some factored value from each person’s sales funnel. Add to these basic approaches a little bit of stretch goal (because we all know those sales guys are sandbagging us), and voila: sales quotas. It’s a disarmingly crude approach. 

But sales operations practitioners rarely characterize the quota setting process in such simple terms – especially when describing it to sales leadership or the sales force. It’s more likely described as a state of the art algorithm combining sales information from a reliable CRM system, a vast store of historical data and extensive market knowledge. Sounds pretty good huh? Few challenge this – Sales Operations is, after all, “experts” in quota setting, and understand better than anyone else the complex mix of data required for setting quotas. After all who else can do better?  

The truth is, even crude quota setting approaches usually work pretty well; most of the sales team falls within 10% or 15% of the assigned quota. The problem is, quota setting methodologies that rely heavily on historical performance fail to recognize the inherent inequities in sales territories. For example, the sales person in an opportunity-rich territory may be bringing in big numbers but is actually grossly underperforming based on the enormous additional opportunity that is available. Or the chronic low performer who is actually overachieving in an opportunity-poor territory. Your superstar may not be such a star; your dud might actually be one of your best people!  

So what’s a sales operations person to do? The answer lies in quotas based on objectively defined market opportunity. If you are a Fortune 500 company, or active in a mature industry, you probably have access to decent market data on real sales opportunities in each territory. In most cases your biggest challenge will be finding out who owns the data and how to make sense of it. If (like me) you work in a smaller organization you may have to get creative. I’ve used third-party data providers like Hoovers, InsideView, and Jigsaw; all can provide customer data based on industry and location. When you do find valid data to work with, don’t go overboard – simply search on an industry and see how many potential targets are in each territory. If there are half as many targets in your poor performers’ territories or twice as many in your high performers’ territories, you’re likely on to something. Depending on your business you may also have access to industry-specific data through publications, user groups or trade associations. Often you are already paying for these services but not really utilizing them so make sure you take full advantage! 

One last word of caution: if after doing all your research you decide to challenge the status quo, be prepared! It is very counter intuitive to suddenly learn you stars don’t measure up or that your low performers may really be doing a pretty good job. Be prepared to even be challenged personally; you’re likely to be asked “Why are you telling us this now?” or “Why didn’t you tell us this before?” Though introducing market opportunity into the quota setting process can be painful, it represents best practice and the most effective approach for allocating goals. For Sales Operations departments stuck using historical performance, making the change to market based quotas provides an opportunity to demonstrate value and drive higher performance.
 

This simple but vexing question has been asked millions of times by thousands of sales leaders for more than a hundred years. Millions of salespeople also ponder this question as they search for ways to boost their own performance. So after all of our prolonged questioning, what do we collectively believe is the most probable correct answer? Motivation? Selling skills? Personality traits? Innate abilities? Experience? All of the above? 

None of the above, say three leading researchers into the field of salesperson performance. In fact, all of those traits in sum account for less than 17% of a salesperson’s success. According to a paper recently published by Arun Sharma from the University of Miami, Michael Levy from Babson College, and Heiner Evanschitzky from the University of Muenster, the real reason that salespeople succeed is deceptively simple, yet it accounts for a whopping 50% of the variation in salesperson performance. What is it then that actually does make a salesperson successful? The very best salespeople outperform the rest because they truly and deeply understand their customers.  

What the Best Salespeople Know 

To reach this insight, Sharma, Levy, and Evanschitzky surveyed 225 salespeople in 2006 and asked them a series of questions about their customers. First, the salespeople were asked to describe the types of customers with whom they interacted. They were then asked to describe in detail the characteristics of the customers they most and least often encountered. Finally, they were asked about the specific sales strategies that they used with each customer type.  

When correlated with the salespeople’s actual performance, the differences in their knowledge of their customers emerged as the primary characteristic of superior sales performance. More specifically, the researchers uncovered five key areas where the best salespeople excelled.  

First, the top salespeople were able to provide much richer descriptions of each type of customer. They gave better identifying characteristics, provided more detailed information, and had a better understanding of each customer’s unique needs. Basically, the best salespeople knew more about their customers than their lower-performing colleagues.
Second, the better salespeople tended to categorize their customers based on the customers’ buying needs, rather than categorizing them with more superficial identifiers like the customer’s appearance or demographics. So in addition to their ability to more fully describe their customers, the best salespeople also gave descriptions that were largely derived from their customer’s perspective, not their own. The best salespeople did not just know more about their customers, they knew them better. 

Third, the more effective salespeople were better at ‘abstraction’ than their lower-performing peers. That is, they were able to look at several different customer interactions, identify common behaviors or traits, and apply those observations to similar types of customers. The less effective salespeople tended to live within each distinct interaction, not noting the larger patterns that helped the top sellers better understand their customers. 

Fourth, the top salespeople had a greater number of discrete selling steps in their own sales processes. Where a low performer may have executed only a few selling tasks during each sale, the high performers saw the need for many more activities to successfully close the deal. One can infer that the extra selling steps were in response to the actual buying needs of their customers. Because they put forth a better selling effort, more prospects chose to buy. 

Finally, and perhaps most disturbingly, the best salespeople had abandoned a greater amount of their previous sales training than their less successful peers. They had developed their own approaches to selling that were more closely aligned with their customers’ needs. In contrast, the less successful salespeople were dutifully doing more of what they had been instructed to do, but they were getting less in return. The best sellers were not only attentive, but also adaptive. 

In the end, the best salespeople were simply more responsive to their customers’ needs. They knew more about them, their knowledge was more relevant, and they tailored their approaches accordingly. It is no surprise that they outperformed their peers who knew less, were more superficial, and used a one-size-fits-all approach. The real question then is no longer ‘What makes a salesperson successful?’ The new real question is ‘How do we make a salesperson more knowledgeable about their customers?’ 

What Sales Leaders Can Do 

The implications of this research for sales managers are somewhat obvious but extremely meaningful. As Sharma, Levy, and Evanschitzky point out in their paper, the training agenda for most sales forces needs to be fundamentally reconsidered. Training designed to build product knowledge, technical expertise, and process compliance needs to be replaced, or at least supplemented, with training meant to develop the sales force’s understanding of different types of customers. This training could potentially take two forms, which are not mutually exclusive.  

First, the training could be built around a company’s existing marketing strategy, if it is well developed and trusted. This would involve teaching salespeople about the company’s target customer segments, their unique business needs, their buying processes, the buying process participants, and the relevant value propositions. A second and perhaps more valuable approach would be to teach salespeople how to identify different customer types and their associated buying needs. This would involve training salespeople to identify and integrate customer information for themselves as they encounter it in the field. Either approach would serve the purpose of focusing the salespeople’s attention on the differences between customers and the importance of understanding and attending to their needs. 

A final implication of this research is the imperative to improve the hiring process. Rather than structuring selection activities to validate past performance or ensure traditional sales competencies, the selection process should be designed to uncover a candidate’s proclivity to categorize and characterize their current customers across the dimensions discussed above. Whether or not the candidate’s current customers and yours are exactly the same, you can assess their ability and propensity to identify and understand customer types. 

In many ways this research confirms what we already knew – Salespeople must understand their customers in order to excel. However, the research is priceless because 1) it reveals the magnitude of the impact that customer knowledge has on performance, 2) it puts a fine point on the knowledge that is needed to succeed, and 3) it provides practical guidance for sales leaders to transform their sales forces. Now it is up to us as sales professionals to bring this research to life.

Jason Jordan is Director of Research for The University Sales Education Foundation, and Vice President with Vantage Point Performance.

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Is your sales force the right size? That’s a question many CxOs ask this time of year at the approach of the budgeting and planning season. On Tuesday of this week Axtria's Charlie Thompson will lead a webcast presentation on sales force sizing. Here are two slides from the presentation that will give you an idea of the frameworks he'll use in addressing this perennial leadership question.

The webcast will describe six sales force sizing approaches, their advantages and limitations, and the circumstances most appropriate for utilizing each. The approaches range from the simple (‘same size as last year’) to the complex (promotion response optimization).

Join us for the webcast, its free and open to non members. Register.

This breakfast presentation and panel will explore the key issues sales leaders must address at each stage of the business life cycle. Panelists will include senior sales leaders of Midwest high-tech and industrial products companies, including: Nalco, Challenger Gray and Christmas, Energy Connect, a Johnson Controls Company, and the Gartner Group.

Learn more and RSVP.

"You have the right to be:

• Assessed for your individual strengths and weaknesses,
• Educated and trained in areas where you need improvement in ways you learn most effectively and efficiently,
• Provided with the tools and support to sell,
• Sent back into the field with improved selling capabilities, no matter how much experience you have, and
• Be coached and provided with ongoing reinforcement to sustain that improvement."

Read the post.

We’re looking forward to our upcoming workshop in Chicago, Mastering Sales Management. Held in conjunction with DePaul University’s Center for Sales Leadership, the workshop will feature speakers from The Sales Management Association and Vantage Point Performance. The workshop offers an advanced survey of competencies shared by high performing sales leaders, practical insights into enhancing sales management impact, and proven models for structuring essential sales management activities. Learn more.

Make plans to join us!

In today’s computer-enabled workforce, information technology has become as integral to a world-class sales effort as are great products and superior salespeople. Customer relationship management, sales force automation, Internet sites, communication platforms, and other applications are now the mission-critical infrastructure that links buyers to sellers and sellers to their mother ship.

However, we have all seen the sobering data on the low percentage of companies that actually consider their IT implementations to have been a success. Even worse, most of us have personally endured the pain of an ambitious, large-scale system implementation that was extremely disruptive to our business, yet yielded little tangible benefit. These classic everything-including-the-kitchen-sink IT projects always bring the promise of a better tomorrow, but they also gave birth to the cynical refrain that “The only system you’ll ever love is the one you just replaced.”

In our study of world-class sales forces, we were therefore particularly interested to see how leading organizations developed technology to enable their salespeople. Surprisingly, we found that 75% of the companies we studied had no large, household-name software packages deployed in their sales forces. They had never endeavored to purchase a ‘best-in-class’ enterprise solution, nor had they chosen to build their own.

How could it be that some of the best sales forces in the world are run without massive, pervasive software applications?

A Different Approach

It is because their sales leadership took a different approach to software development. They chose not to spend a year or more assembling user requirements and even longer building, testing, and deploying a major IT project. To them, the effort required to do so would have left them without desperately needed functionality for an unacceptably long period of time, and the drain on resources would have distracted their sales force from its real job – to find, acquire, retain, and grow their customers.

Rather than fall victim to an all-or-none IT implementation strategy, they chose to develop their systems incrementally over time as their salespeople and customers demanded specific functionality. If customers asked to see their orders online, they built that capability. If salespeople needed access to customer information from the field, they made it happen. There were no lengthy design and development efforts in sight – just focused responses to any reasonable requests.

Leadership could have taken those various requests as a sign that a large-scale system development effort was in fact required, but instead they showed restraint. Rather than thinking to themselves, “If we build it, they will come,” they determined, “They’re here... Now we should build it.”

The CIO of one company phrased it this way: “We don’t have a formal CRM system, though we have talked about it many, many times. We never implemented any packaged applications, because they weren’t architected the way we do business. We never pushed anything on our salespeople, we just responded to their requests for additional functionality. Really, what started out as a series of ‘quick fixes’ ended up being full-blown systems.”

While it is seemingly counterintuitive that such a reactive posture could produce better supporting technology than a more deliberate, proactive effort, it is wholly pursuant to the philosophy that technology should be responsive to user needs. Further, this organic system development strategy did several things for these companies that helped them overcome classic pitfalls:

• It enabled the speedy development of required functionality that was swiftly deployed to the field
• It inspired end-user adoption of the technology, since the functionality was a relevant and timely response to a stated need
• It minimized the disruption to both the sales force and larger organization, since the software development and training efforts were meted out in more manageable chunks

At least for these world-class companies, more rapid and more iterative software development was the key to a more enabled sales force.

Sometimes It’s Messy

Reading this storyline will, of course, make many people cringe in horror. Quick fixes... Multiple IT platforms... Disparate databases. This is the kind of stuff that gives most CIO’s nightmares. In an ideal world, things would always be elegant and seamless – especially IT infrastructure. However, elegance and seamlessness need not always be the priorities, particularly when they demand an epic investment of time and money.

As the enlightened CIO stated above, the top priority for sales-focused leadership is to respond to the needs of its salespeople and customers, not to architect the most elegant solution. Information systems in the sales function exist to support the selling effort. And if the details get a little messy? Well, that’s just the nature of details.

So before embarking on your own IT odyssey that could exhaust your organization and overwhelm your sales force, our research suggests that you should ask yourself two important questions:

1. What do my salespeople and customers really need from my information systems?
2. How quickly and painlessly can I possibly get it to them?

Jason Jordan is a Vice President of Vantage Point Performance, a sales management training and consulting firm. 

Counting mainly on the top reps can be a very risky game, however. Some may miss their marks or even leave for better opportunities. It’s also much harder to achieve an ideal mix of product and services or new and existing customers if sales are concentrated in a few hands. The lesser performers will likely focus on the offerings that are easiest to sell and the customers that they know. These are not necessarily the offerings or customers with greatest potential for profit or competitive advantage.  

Long-term sales success thus depends on engaging the entire team -- throughout the sales cycle and throughout the year.  

An Early Warning System 

Imagine you’re the sales manager of a successful high tech company, where sales have been steadily rising for many years. Here and there, though, there are signs that you’re about to lose market share. Your competition is getting stronger and more proactive, the products that used to set you apart have been commoditized, and a few high-performing reps have been carrying the rest of your sales team.  

What you may not notice is that the team is not reaching enough new customers or selling the products that are your new differentiators. You suspect that you need an overhaul of your sales methods to keep things from falling apart. But you need to make the new methods accessible to your sales team and prove that they will work. 

If you had an early warning indicator, you could immediately see potential trouble spots and fix them before they became real problems. You could proactively help sales reps fully understand their customer pipelines and identify the deals with the greatest impact. You could develop incentives for selling new products or acquiring new customers. 

With the right tools you could also create territories that maximize contributions from each member of the sales team and highlight hidden sales opportunities. You could connect reps with subject matter experts throughout the sales cycle. 

If you could view your KPIs on an easy-to-use dashboard each day, you’d find it easier to meet your revenue and profitability projections. You could set customer and product goals for your reps, watch how the reps perform, and determine whether they’re reaching the most productive customers with the optimum product mix.  

Having this type of information throughout the quarter would help you make adjustments before the quarter ends – thereby avoiding surprises. Showing reps how their performance affects their incentives can motivate them to work harder and meet their goals. 

The right analytics could also help you integrate best practices into your sales methods. This might include, for example, a weekly review of the customer pipeline -- that could help reps make the most of their deals.  

Staying Ahead 

Engaging the entire sales team requires reliable information on how your reps are performing against their goals, clear visibility into customer needs, and analytics that help the whole team get the right products to the right customers at the right time. While KPIs like “percentage of reps making plan” or “composition of pipeline” might not directly affect your job today they can definitely enhance your career over time by helping you align sales strategy with sales execution. When everyone works toward the same end, revenue and profitability can grow for years to come.

Dietmar Bohn is Vice President Solution Management at SAP AG. He runs SAP’s Solution Management for the Line of Business Sales. Dietmar brings more than 10 years of CRM experience from both outside and inside SAP and more than 20 years of industry experience. Dietmar has held different management roles spanning CRM strategy projects, CRM implementation projects, CRM development and CRM product management.

The role of a salesperson has always been fundamentally the same – to create value for customers. The nature of that value has changed over time, from a distribution channel in the 1800’s, to a source of information in the 1900’s, to a problem-solver in the 2000’s. And no matter where the profession of selling goes from 2010, a salesperson ‘s role will always be to provide some unique value to their customer, else the buyer will go to a catalog, retail store, or web site to transact at a lower cost.

Communicator of Value?

It was therefore no surprise in our study of world-class sales forces to find that their salespeople were creating a tremendous amount of value for their customers. What did strike us, though, was the sales forces’ diligence in communicating value to their customers. No, they were not communicating the value of their products and services to their customers – that task has been largely overtaken by the Internet. These world-class salespeople were extremely adept at communicating their own value as a seller.

Lest you think that these were sales forces populated by braggarts and blowhards, they were in fact salespeople who were able to express in concrete financial terms the value they had created for their customers. They were essentially business consultants who were able to uncover opportunities, bring them to life, then measure and (most importantly) report the customer’s realized return on investment. They made real monetary improvements and were not afraid to point it out.

Three Conversations of Varying Impact

Many salespeople mistakenly assume that prospects will connect the dots from buying their company’s products to realizing future financial returns. They say things like, “This product has been proven to save money for all of our customers who use it.” However, prospects are not experts at taking your generic claim and applying it to their specific situation. All they hear is, “The product you are selling has saved money for some other people.”

Better salespeople will actually do the math for the prospect and make a more tactile statements such as, “Based on your historical usage, switching to our product will save your organization $213,432 each year in reduced re-work.” In this instance, the prospect hears, “There’s a chance that, if I trust this salesperson, I might actually save two hundred grand and beat my cost projections for the year.” A better sales approach indeed.

But the top sales forces we studied had conversations like this: “Last year we projected that using our products would save you $213,432. But in fact we saved you $343,238 according to your plant managers whom we recently interviewed.” In this case, the customer has no choice but to see what the salesperson has done for them – created value that they would have not realized without their help.

Which of these three salespeople would gain your loyalty?

One Process Worth $1 Billion

It is important to note the sales forces we studied were not staffed with CPA’s and PhD’s – their salespeople were math mortals like the rest of us. However, sales leadership had equipped their sellers with sophisticated processes and tools that helped them calculate and communicate the financial returns that their customers were receiving. They left no chance that the first two conversations were taking place in the field – They implemented systems to ensure that it was the third.

One of the sales forces has even trademarked a process called Documented Value Added® to help them demonstrate the impact they have on their manufacturing customers’ bottom lines. Their salespeople use a PC-based system to calculate the value they create for their customers through reduced maintenance costs, increased productivity, and other means. They work with local plant managers to identify the specific sources of improvement and to quantify the economic impact of the changes. They then document the impact and obtain sign-off from the plant managers as proof that the value was realized.

Their vice president of strategic accounts described the system’s impact on its customer relationships in this way:

“Too often customers simply do not remember all the good things that you do. Through this process we have documented over a billion dollars worth of savings for our customers. It is fun to go into a customer and say, ‘You bought $200,000 last year from us, but we saved you $85,000 in Documented Value Added® savings in your process and your procedures in your plant.’ That takes the sting off of a 3% or 4% price increase or a competitive offer that might be a few points better than you are. It allows us to clearly convey to the customer, in terms the customer understands, what we are doing for them.”

The Takeaway for Sales Leaders

The lesson from our study of these world-class sales forces is this: It is not enough to promise or even to create value for your customers – You must demonstrate to the customer that your salespeople are creating explicit economic value that demands their patronage and loyalty. It’s one thing to say you offer value. It’s slightly more convincing to quantify the value you offer. Yet, the most powerful sales pitch you will ever make is to point backward in time and prove that you actually delivered it.

Jason Jordan is a Vice President of Vantage Point Performance, a sales management training and consulting firm.

Differentiate with Meaning

Differentiation can come in many forms, even when the product itself is largely undifferentiated from competitive offerings. So we attempt to differentiate ourselves through superior service, bigger selection, stronger personal relationships, loyalty programs, and other means. Frequently, though, these kinds of differentiation are used by all competitors and are seen through the buyer’s eyes as rhetorical, rather than meaningful.

Differentiation serves two roles, depending on whether you are an incumbent supplier or a meddling competitor. The competitor wants differentiation to be so great that the buyer will give up the relationship they have with their current supplier and move over the business. For the incumbent, differentiation is designed to make the switching costs for a customer high enough that they will stay with the current vendor, even if they can get a slightly better deal from a competitor. But in most cases, competitors can match whatever competitive advantage a current supplier may hold. Products can be improved. Relationships can be built. Value can be added.

Recent research suggests that one way to raise switching costs is to create ties that transcend the product or service alone. Researchers Kapil R. Tuli, Sundar G. Baradwaj and Ajay K. Kohli explored the impact of multiple, extra-sales relationships with a customer on their incumbent supplier’s sales growth and volatility. In their paper Ties that Bind: The Impact of Multiple Types of Ties with a Customer on Sales Growth and Sales Volatility,¹ they posit that the more non-sales ties a company can forge with a key customer, the less likely it is that the customer will defect. Moreover, it is highly likely that more product or services will be sold, purchase levels will likely remain steady, and pricing pressure from that customer will ease. The researchers call this ‘relationship multiplexity,’ and they claim that it can be used as a market-based asset by analysts to assess the potential growth and volatility in the sales of a firm.²

The Research and Findings

Using SEC filings and business ratio databases, the researchers explored the connections between multiple, non-sales relationships with a customer (number of different types of relationships between a supplier company and a customer company) and sales growth and volatility (variability of purchasing and pricing pressure). They found that there is a positive correlation between sales growth and the number of multiplex relationships between a seller and buyer, and they found a negative correlation between the number of such relationships and sales volatility. In other words:

More connections = more sales growth + less sales volatility 

Fewer connections = less sales growth + more sales volatility

One reason for this is perhaps that these multiplex relationships help the supplier gain access to private information about the customer, which in turn enables it to serve the customer better. Another possibility is that the rich relationship helps the supplier develop offerings that meet the customer’s unique requirements, which provides an economic incentive for the customer to buy more from the supplier.

In short, a portfolio of diverse ties between a seller and a buyer creates a competitive advantage that is difficult or impossible to substitute. This therefore makes it difficult or impossible for a new entrant to the market to dislodge the incumbent supplier.

Lessons We Can Use

Selling products to a key customer is not enough to ensure that sales will continue to increase or that sales to that customer will be less volatile. Companies are discovering that a more in-depth and varied set of relationships will help on both fronts. These multiplex relationships can take the form of joint research and development projects, cross-equity stakes in each other, cross-membership on boards of directors, and other areas. 

In order to increase the barriers for competitors, seek out and develop multiple relationships with top customers to strengthen the ties between you. Offer a board seat to a key customer’s chairman or president. Suggest joint R&D projects to provide both you and your customer a competitive leg-up. Put a customer service facility or distribution operation in unused space at a key customer’s site. Tie in data systems to allow for better communications and to drive costs out of doing business together. 

The list can go on and on, limited only by your imagination. Start small and gradually ratchet up the multiplexity of the relationship, and you will secure a competitive advantage that will be very difficult for another supplier to beat.

Pete Peterson is Managing Partner of SaleMetrix, LLC, and an Advisory Board Member of the University Sales Education Foundation.

Notes:

¹Tuli, Kapil R., Bharadwaj, Sundar G., Kohli, Ajay K., 2010, Ties that Bind: The Impact of Multiple Types of Ties with a Customer on Sales Growth and Sales Volatility, Journal of Marketing Research, Vol. XLVII (February 2010) 36 - 50.

²Srivastava, R., Shervani, T., and Fahey, L. 1998, Market-Based Assets and Shareholder Value: A Framework for Analysis, Journal of Marketing 62, (January), 2 – 18.

For many sales organizations, training their salespeople is one of the largest investments they make in performance improvement. From the onboarding of new hires to annual training events for the rank and file, billions of dollars are spent each year in the U.S. alone to improve the skills of our salespeople.

Unfortunately, sales training is also one of the most perishable investments a company can make. Estimates vary, but it is generally accepted that between 60% - 90% of the skills imparted to a salesperson during a training event are lost within 30 days if the learning is not immediately and consistently reinforced. Given that grim forecast, you would think that companies would make certain that quality reinforcement is taking place, but at least two factors conspire against the stickiness of most sales training.

Too Much, Too Soon

First, the sheer volume of content that is included in many training programs is overwhelming to salespeople. It is expensive to take a sales force out of the field, so sales leaders are motivated to jam all of the years’ learning into a single, large event. In order to ‘make the most’ of the investment, it is not uncommon to see 3, 4, or even 5-day sales conferences where training is the primary activity.

With such a vast amount of information being poured onto the salespeople, it would be literally impossible for sales managers to reinforce all of this content when they return to the field. A sales manager could spend much of their time reinforcing a single new behavior, such as call planning or questioning techniques, so it would take a team of full-time coaches to address the content of a 5-day training event. As the training agenda deepens, the chances of it sticking quickly diminishes.

Second, training is typically done when it is convenient for the calendar, not necessarily when it is the best time to learn. If the annual sales meeting is in September, then the annual training will probably be in September, too – even if you are teaching your salespeople to complete account plans that they will not need to do until their territories are realigned four months later.

Unfortunately, if a new skill is not immediately reinforced, whether through coaching or by actually putting the skill into practice, it begins to erode with frightening speed. Ideally, the training would be held in close proximity to the need for the skill, not just when it is can be squeezed into the calendar. When a vast amount of information is given to a salesperson who does not immediately use it, the knowledge literally goes into hiding... perhaps never to return.

A Just-In-Time Approach

In our study of world-class sales forces, we discovered that their approach to training was dramatically different than what we described above. These companies had adopted what could be considered an innovative ‘Just-In-Time’ approach to sales training.

Rather than holding comprehensive training events where a year’s worth of content is dumped onto the sales force, they opted for smaller, more focused sessions where very specific skills were taught. This allowed the salespeople to concentrate on mastering one or two skills before moving on to others.

Also, the training took place in close proximity to when the salespeople would need to use the skills. By providing the learning experience immediately before sales force was expected to demonstrate the skills, these organizations improved the likelihood that the learning would stick. Train today, use tomorrow, allowing no time to forget.

One of the company’s executives explained how they used this approach to redesign their new-hire onboarding program: “A key element of designing the new curriculum was to reconsider the timing of when salespeople received the training. If we fire-hosed them all in the first part of the program, the chances they were going to retain everything they learned and start applying it was probably very small.

“So we designed the timing of when they received the training to correlate with when they would actually need to start using these skills and knowledge. For example, you are not going to train a new rep on selling very advanced systems, because the chances that they will get into that situation in the first few months of their employment are very small. The same with reporting. They have not yet generated any revenue, so there is nothing to report. So we strategically placed that training later in the curriculum so that the timing made more sense.”

Lose the Fire Hose

Training should be a large investment for every sales force, but the investment must be protected. A clever approach to avoiding post-training atrophy is to rethink how the training itself is delivered. Specifically, avoid at all costs a fire-hose training event that takes place when the calendar happens to allow for a good dousing.

Instead, deliver bite-sized training to your sales force when the skills are actually needed. If relevant and timely training is provided in easily digestible chunks, salespeople are more able to focus on the new skills and reinforce them through immediate usage. Usage leads to adoption, and adoption leads to improved capabilities. And that leads to a wiser training investment with better sales results.

Jason Jordan is a Vice President of Vantage Point Performance, a sales management training and consulting firm. He may be reached at JJordan@VantagePointPerformance.com.

We're looking forward to David's keynote at the MIT Sloan Sales Conference next week.

Slides on Building a Sales and Marketing Machine.

I am passionate about fusing innovative business processes with technology. I have to be: that’s the only way the sales warriors of the 21st century can win.

Think about it: Sales has become a very complex activity in the 21st century. More competitors, both local and foreign, are battling for the same deals. Buying centers are enlarging; decision makers and influencers are spread across geographies. Increasingly, your sales teams are pitching an ever-expanding range of products and services to a customer base that is more well-informed than at any time in history. 

All this complexity translates into huge volumes of information that your sales representatives need to consume—about products, about customer needs, about the strengths and weaknesses of competitive offerings, and more. There’s information on LinkedIn, in notes on a smartphone, in a CRM system halfway around the world, in half a dozen blogs, and more. Always more.

Assuming you want your sales warriors to have a life outside of work (or, at least, to sleep), how can you empower them to win in this environment?

From my point of view, which is that of a sales executive who started in sales back when we used to rely on this stuff called paper (maybe you’ve heard of it), the answer has two parts:

One: the sales warrior who expects to go it alone and succeed solely on personal connections will win big deals with decreasing frequency. That’s simply no longer a model for success. There’s too much information and too little time. You need a team of warriors, a team that can interact in complementary ways to meet the customer’s needs faster, better, and more effectively than the other teams that are trying to do the same thing.

Two: you need to fuse innovative business processes with technology to give your teams a competitive advantage. They need ways to distill these huge volumes of information, access the critical bits quickly, collaborate effectively, and move with agility to create the impact that will make the difference. Poorly designed business processes that interact with a patchwork of poorly integrated CRM systems, sales methodologies, and enablement tools just won’t cut it. Sales teams need business processes that are well designed and innovative, that deliver an integrated view of the customer and align with a unified sales management strategy.

Is this easy? No. But it can be done, and it must be done if you want to win in the 21st century. You just need to know how to do it—or to know who to call who can help you.

Enabling Competitive Advantage in the 21st Century

The point of fusing business processes and technology is to create competitive advantage in four key areas. Today, I’m just going to summarize these. Over the next few weeks, though, I’ll be writing more detailed posts about each area. So don’t despair that I don’t say more today. Stay tuned instead.

Insight. Who are your most profitable customers? What is the most profitable deal in your pipeline? In my experience, few sales executives can answer either question instantly. You and your sales teams need a greater understanding of your customers and the industry trends that affect them. It can help your sales teams craft a compelling story about how your products and services can resolve your customer’s most important business challenges.

Collaboration. As noted, there’s too much information and too little time for a sales warrior to do battle alone. Today, sales representatives need to work together. And to help them work effectively, you need to understand what kinds of knowledge and information—from inside and outside the company—they need share. You also need to understand how that knowledge and information is created, captured, stored, and manipulated. Business processes and technologies that can increase the effectiveness of everyone they touch are key to meeting a customer’s needs more effectively.

Agility. Today, the idea of working exclusively from an office or exclusively during “business hours” is as antiquated as the printed business directories I used in the ‘90s. Business hours are whenever you do business; the office is wherever you happen to be. While smartphones or wireless tablets can keep us connected wherever we are, agility requires more than mere connectivity. Agility requires the ability to work more effectively at any time and from any place. Sales representatives need innovative applications and up-to-date information at their fingertips. They need tools that can that can help them compete with better information and better responses, delivered with better timing.

Impact. Unless your sales teams deliver an experience that wows your customers, they will not stand out from the crowd. They need tools that can foster agility, collaboration, and insight; they also need to understand a customer’s past, current, and future needs. CRM tools are critical here, but to be most effective they need to be fused with the tools that foster insight, collaboration, and agility. That combination can maximize the customer experience and help you win the field.

Fusing business processes with technologies to enable insight, collaboration, agility, and impact is the key to empowering the sales warriors of the 21st century. Your teams become more productive and effective. They can achieve their sales goals and have time to celebrate those successes with their families at the end of the day. 

A key part of effective sales deployment is territory alignment, or optimizing assignments for salespeople. Get territory alignment right and more opportunity gets covered, less sales capacity is wasted, selling expense is minimized, and sales results increase. It’s especially true for large sales organizations.

Two of SMA’s underwriters, Varicent Software and TerrAlign Group provide solutions that assist their clients with sales deployment and territory alignment. TerrAlign’s core business is territory alignment; Varicent provides Sales Performance Management solutions and recently began incorporating TerrAlign’s solution into their own. The two firms recently announced an extended partnership and reseller agreement, and they’ve been producing some nice content related to the topic of territory alignment. We’ve provided a quick round up of their recent podcasts below.

We’ve also cooked up a spreadsheet-based modeling tool based on TerrAlign’s recent SMA webcast. It calculates the impact of optimized territories, handy for modeling the business case impact of territory realignment. It’s posted for members in the Resource Library, but available here to non-members for the next 10 days.

SMA Sales Territory Alignment Modeling Tool (Excel)

Podcast: Territory Management - Challenges Sales Operations Face Audio | Transcript

Podcast: Territory Management - Finding the Right Balance to Maximize Capacity Audio | Transcript

Podcast: Territory Management - Best Ways to Optimize Your Territory Podcast Audio | Transcript

Stevens’s responsibilities at Eli Lilly included distilling information from sales to help determine compensation for pharmaceutical representatives…

We’d like to officially declare ourselves Butler fans. 

Some might argue that this disconnect – between top B-schools’ focus on sales and the market demand for capable sales resources – wont last forever, since even the academy responds eventually to market forces. A more compelling question might be: Who is stepping into the breach left unaddressed by top B-schools in sales education? Here are two answers we’ve learned about recently, one impacing undergraduate education, the other at the graduate level.

National Collegiate Sales Competition (NCSC)

The National Collegiate Sales Competition (NCSC) is a 12-year old event featuring student role-play competition staged by Kennesaw State University’s Cole College of Business. The 2011 annual competition concluded just a week ago. Within spitting distance of Civil War battlefields outside of Atlanta, the event brings together a ragtag confederacy of business schools billed as the “most elite University Sales Programs in North America.” Judging by the roster of schools few of these “most elite” will be troubling the top-tier business schools’ place atop the annual rankings. The roster’s 60-plus institutions include the heretofore-unknown-to-the-author Aurora, Bloomsberg, Bryant, Campbellsville, Nicholls State, Plymouth State, Salisbury, and Widener Universities, but also some much larger schools including Florida State University, whose excellent Sales Institute is an SMA partner. Only a third of the NCSC schools are ranked in Business Week’s top 100 undergraduate business schools, including just two top 20 schools – Indiana University (#18), and Babson College (#20).

You’d never know it based on the roster of blue chip corporations queued as NCSC sponsors: 3M, ADP, Aflac, Fedex, HP, State Farm, Verizon, Xerox, and many others who provide financial support to the NCSC or its participating schools. They get front row seats for the competition and first crack at potential sales recruits. Spend even a few minutes with recruiters, student participants, or faculty from participating schools, and it’s clear to see why this event is growing. I attended a qualifying competition at Florida State earlier this year, and was stunned by the commitment of sponsoring firms, the enthusiasm, competitiveness, and quality of the student participants, and the overall seriousness of the endeavor. Clearly, sponsoring firms get a strong ROI from their involvement; recruiters from these firms actually gush about the quality of new sales hires from undergraduate programs with sales centers like those that compete at NCSC. Students are making out like bandits too (compared to their peers) – 70% of competition participants get job offers.

Should sales training have a place in the larger context of undergraduate education? It’s a question sure to raise the hackles of some traditionalists. Our opinion is that business schools, including undergraduate schools, ignore sales at their own peril given the sales function’s importance to the constituencies they serve. But we wouldn’t suggest replacing the Classics department with sales training, even if it might keep a few Classics majors from going Baroque in the post-graduate job market.

Sales Education in Graduate Schools: The Kids Are All Right

If top business schools are indifferent toward undergraduate sales education, their interest actually diminishes at the graduate level. Those top MBA programs that address sales at all provide an emphasis a la carte, with elective offerings sure not to distract from Marketing’s center-of-the-plate status. Like a drunken uncle at a Baptist reception,the graduate student hoping to indulge an enthusiasm for sales management will not find much to slake their interest, and will raise more than a few eyebrows in the process.

Which is just what MIT Sloan’s students seem to be doing, by staging a sales conference. That’s right, I said students. Unencumbered by parental supervision or faculty involvement, MIT’s graduate B-School Sales Club is running what appears to be an excellent conference on the topic “Selling in a New Normal” (6 May, Cambridge, MA). Entirely student run, the conference will raise money to support a student sales competition called the Bold Sell Competition, at which gradute students from other top-tier global B-schools (including Harvard and INSEAD) engage in a role play based selling competition. We think this event is remarkable; in fact, we were excited enough by the whole shebang that we signed on as a conference sponsor, and will moderate a panel discussion there on the topic of Sales Management ROI. Perhaps MIT’s pluky B-schoolers have engineered a way to put sales and sales management on the agenda at top graduate business schools, where it belongs. With or without adult supervision.

Grab a pdf of the article here (SMA members may bypass the registration form by logging in to the member Resource Library). It's reprinted with permission from World at Work.

Sales management is poorly understood, haphazardly served by business schools, and woefully under-trained by most firms. Given the magnitude of sales investments, sales management’s potential to influence sales effectiveness, and the generally lousy state of professional resources available to sales management, we think there is a conspicuous void to fill in management development for the sales force. Here’s why.

Big Bets

American firms make enormous bets on their sales organizations. How big? About US$800 billion in annual sales force expense, twice what is spent on advertising. US firms deploy five million full-time salespeople (four times that number if you include B2C and retail sales jobs). It may be a reach - if you consider all 20 million salespeople "white collar" - but as many as one in four US white-collar workers is a salesperson. Who’s managing them? About 350,000 front-line sales managers, their senior leadership, and assorted colleagues in sales operations and sales support functions. 

Big Upside

These managers and the workforces they direct represent both great corporate expense and great upside for the firms that invest in them. To wit: a recent academic “meta-study,” or study of studies, measures sales investments’ elasticity, the percentage change in output based on a ratio-scaled measure of input. The study pegs sales force investments’ elasticity at .32 or more, compared to advertising elasticities of .1 to .2. (University of Kansas Marketing Professor Murali Mantrala, one of the study’s authors, spoke about the findings at this year’s excellent KU Sales Productivity Conference.)

The authors point out that return on sales investments vary widely, however, because of differences in market settings, product life cycle, and many other factors; which means that…

…sales managers have to become more adept in finding ways to maintain and enhance sales force productivity. One obvious option is to redeploy their sales force efforts to more elastic settings – where personal selling makes a difference. …[I]mproved allocations of selling efforts across product portfolios and geographic areas can often deliver higher profits at lower than current investment levels.

Which firms will find success “redeploying sales force efforts into more elastic settings?” Those most invested in management development and professional standards for sales leadership.

A Place to Start

Eighteen months ago we opened for business at The Sales Management Association with a modest aim: create an objective, credible, and comprehensive resource for sales and sales operations leaders interested in improving their craft. We’re proud of the modest progress we’ve made in growing the SMA, and launching this blog is an important step in extending our reach to the professional community we serve. We hope you’ll feel the same, and become a regular at our new blog.

We launch Dec 30!