Preview Reengineering Sales Management
As we’ve heard from the Harvard Business Review, the traditional model for sales operations doesn’t work too well anymore. It needs to be re-imagined, redefined, and reengineered to suit the ways buyers want to buy.
But what is that traditional model, and how does it need to change?
Since every business is different, working in different markets, selling different offers to different customers, there is no one way, as we recognise throughout this book. No two businesses, teams, managers or even sales executives, will do exactly the same things, the same way. And we don’t propose they should. We understand that every sale is a complex, multi dimensional, coming together of requirements, people, proposals and prices. Each deal has it’s own One Way and multiple Wrong Ways. In fact, that understanding is right at the core of our reengineering concept.
By traditional model, we’re referring to the most basic skeleton on which the majority of sales functions have built their own version. Like other models for business, it emerged early in the industrial revolution, when markets for everything were infinite, and supply of anything was short.
Increasingly wealthy people were transforming into consumers, and even richer people built factories to supply them with products they wanted. The factory owners needed somebody to tell potential buyers what was available, at what price, and bring back sales orders for the factory to fill. The traveling salesman emerged.
Our, by now, generic salesman figured out the best way for him to do his job. He developed a process (although certainly didn’t call it that at the time), which went something like this:
- Find somebody who would listen to his presentation.
- Show them the product and tell them the price.
- Ask for an order.
- Reduce the price till that person agreed to buy.
- Find somebody else and repeat the process.
That’s when sales people started Kissing Frogs!
(The Kissing Frogs analogy comes from the fairy tale in which a Princess kissed a frog, which then turned into a handsome Prince. Most frogs don’t turn into Princes when kissed – hence the accepted theology You Have to Kiss a Lot of Frogs to Find a Prince, and the sales persons You Have to Pitch a Lot of People to Find a Customer).
As businesses grew and made more products for sale, the owners needed more people selling, and others to manage them. The generic sales manager evolved. Invariably he (and it was exclusively hes at the time) was one of the more successful sales people. He’d worked harder than the others, found more people to listen, made more exciting pitches, closed more deals. Quite naturally he was best placed to recruit, train and manage new guys to do the same job.
The sales manager naturally based his efforts on the Kissing Frogs theology – get out on the street, make more calls, pitch more prospects, close harder. His model was simple, easy to train, and manage. He could even use it for planning, and measuring, and managing. For example, he knew he could make 5 sales each day if he pitched 20 prospects. The business owner was making 100 products everyday, so the manager needed 20 sales people pitching 400 prospects each day to make the 100 sales. That’s when the sales target emerged. Sales people who didn’t make the 5 sales per day were replaced by new ones. The guys who did received a bonus. We got the Hero or Zero mentality. Sales teams got territories, targets, commissions, over riders and Presidents Clubs. Sales managers got Activity Rates and big sticks they used to drive their sales teams.
Some reports suggest the first sales people were employed to sell bibles, door to door. That would explain how they got the reputation for aggressive, pushy, intimidating behaviour, and how a whole industry of motivational mentors evolved. Have faith, convey your confidence to the prospect, don’t ask questions he can answer with No, Close Close Close. The sales industry got it’s own super heroes. While the kids got Superman and Batman, we got the Heavy Hitting, Hard Closing, Won’t Take No For An Answer, 800lb Gorilla. We got Punters (unsuspecting pilgrims ripe to be separated from their money), Elevator Pitches (fast talking sales presentations) and Sales Funnels. We got Cold Calls, Discounts, Specials, Corporate Presentations, Vendor Strategies, Marketing, Internet Marketing and SPAM. And we got unhappy customers, by the boat load.
The bottom line in the story of the traditional sales model is it’s inefficient, expensive, and results in unhappy customers. And it’s both ripe for, and worthy of reengineering. But to what?
The HBR report is both correct, and naive.
“In the realm of selling, it’s the buyer who is newly empowered. Customers no longer need a salesperson to learn about a company’s offering, much less to place an order. As a result, sales has become more about helping customers define the problem they are trying to solve and assemble a complete solution. ”
We agree, but would add “without bankrupting the company in the process”.
The new customer focused, consulting based, flexible, personalized sales approach will be horribly expensive if delivered in the traditional model, and won’t work under the traditional management philosopy and style.
In today’s world, sales people need to evolve from robotic drones into intelligent capable entrepreneurs – business people who can develop value adding and sharing relationships with customers.
Sales managers need to evolve from lion tamers into engineers, with resources, strategies and processes which can be continuously improved. The sales model needs to target the right prospects with a high probability of requirement, define a scope of delivery, ensure compatibility of buyer and seller processes, plan and execute a process through which both buyer and seller agree what will work for both parties, and how that will be achieved and paid for.
Instead of simply making product because they can, businesses need to offer value propositions the customers want, and can be delivered. They need a sales strategy to decide which offers are put to which potential customers, and how. They need a sales process which minimizes the cost of sale, by not selling to those unlikely to buy. They need ‘business people’ sales guys who can collaborate, negotiate and manage. And they need to measure the results, and find ways to improve the efficiency of the process. They need a continuous cycle of improvement – just like the engineers in the factories.
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