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TRANSCRIPT
Welcome!
Vlerick Sales Management Forum – vol. 1
Sales Force Effectiveness: A Qualitative and Quantitative Assessment
Prof. Dr. Deva RANGARAJAN
© Vlerick Leuven Gent Management School
Agenda
Objective
Framework
Methodology
Findings/Insight
Conclusion
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© Vlerick Leuven Gent Management School
Objective
How are organizations managing the performance of
their sales forces?
Identify some general trends in sales force
management
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© Vlerick Leuven Gent Management School
Company
results
Sales force
structure and roles
Customer
resultsActivitiesSalespeople
Definers Shapers Exciters Enlighteners Controllers
The Sales force effectiveness drivers
The Sales System Forces outside the Sales System
Company factors
- R&D
- Operations
- Finance
- Marketing
- Product offering
- Pricing
- Services
- Channel
- Strategy
Environment
- Market growth
- Competition
- Consolidation
- Government
- Technology
- Random Shocks
Sales System
Source: « Sales Force Effectiveness : A Framework for researchers and practitioners » by Andris Zoltners,
Prabhakant Sinha and Sally Lorimer, Journal of Personal Selling and Sales Management, Spring 2008
© Vlerick Leuven Gent Management School
Methodology
Qualitative Study
1. Interviews with sales executives
from over 40 companies
2. 27 Industrial Manufacturers
6 Consumer Good
Manufacturers
6 Apparel Manufacturers
3 others
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Quantitative study
1. Online questionnaire
2. Convenience sample of 97
respondents, over 70
companies
3. Total of 85 usable responses
4. Over 80% of respondents in
sales
© Vlerick Leuven Gent Management School
Findings/Insights
Drivers of Sales Force Effectiveness
1. Definers
2. Shapers
3. Enlighteners
4. Exciters
5. Controllers
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© Vlerick Leuven Gent Management School
Sales Force Effectiveness Drivers
Shapers
- Recruiting
- Training
- Coaching
- Culture formation
- Compensation
Enlighteners
- Customer Research
- Targeting
- Data and tools
- Customer relationship
management systems
Exciters
- Leadership
- Compensation
- Motivation programs
- Meaningful work
Controllers
- Performance Management
- Coordination systems
- Vertical and horizontal
communication
- Compensation
Definers
- Sales strategy
- Customer segmentation
- Customer offering
- Sales process
- Go-to-market strategy
- Sales force design
- Structure and roles
- Size
- Territory alignment
- Skills
- Capabilities
- Values
- Customer insight
- Inspiration
- Motivation
- Expectations
- Success measures
- Roles
- Territories
- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson /
activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Leuven Gent Management School
Mixed feelings around go-to-market strategies
Agree
8%
Completely
Agree
5%Completely
disagree
1%
Disagree
16%
Neither agree
nor disagree
24%
Somewhat
agree
33%
Somewhat
disagree
13%
Agree
15%
Completely
Agree
4%
Completely
disagree
5%
Disagree
7%
Neither
agree nor
disagree
20%
Somewhat
agree
28%
Somewhat
disagree
21%
We have a clear go-to-market process We have a clear, well mapped out key
account management policy
© Vlerick Leuven Gent Management School
Sales force sizing is an issue
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Agree
15%
Completely
Agree
2%
Completely
disagree
4%
Disagree
12%
Neither
agree nor
disagree
17%
Somewhat
agree
22%
Somewhat
disagree
28%
We have the right number of sales
people to implement our strategy
We calculate the amount of people
needed to implement our strategy
Agree
12% Completely
Agree
3%Completely
disagree
14%
Disagree
25%
Neither
agree nor
disagree
10%
Somewhat
agree
11%
Somewhat
disagree
25%
© Vlerick Leuven Gent Management School
Our sales force is structured optimally to implement
our strategy
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Agree
13%Completely Agree
5%
Disagree
12%
Neither agree nor
disagree
27%
Somewhat agree
22%
Somewhat disagree
21%
© Vlerick Leuven Gent Management School
Territory alignment is a contentious issue
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Agree
9%
Completely
Agree
1%
Completely
disagree
14%
Disagree
21%Neither
agree nor
disagree
12%
Somewhat
agree
13%
Somewhat
disagree
30%
We calculate the workload for our
salespeople
We calculate territory potential of our
salespeople
Agree
11%Completely
Agree
2%Completely
disagree
10%
Disagree
15%
Neither
agree nor
disagree
14%
Somewhat
agree
21%
Somewhat
disagree
27%
© Vlerick Leuven Gent Management School
Practices
Transactional customers:
channel partners and e-
commerce initiatives
Key customers:
KAM/RAM/GAM
Structure:
Geographical/Matrix
Issues
E-commerce; no structured policy towards managing channel partners
Cross/Upselling: Silo mentality
Field support for RA/KA including resource allocation/sharing
Cross-border pricing issues
Insights- Definers
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© Vlerick Leuven Gent Management School
Practices
Sales force sizing: Ad-
hoc
Roles: Usual
suspects/new team
selling roles to support
solution sales
Issues
Workload method: Used
only by some companies
to size sales force
Using existing sales force
to fulfill new roles
Insights- Definers
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© Vlerick Leuven Gent Management School
Sales Force Effectiveness Drivers
Shapers
- Recruiting
- Training
- Coaching
- Culture formation
- Compensation
Enlighteners
- Customer Research
- Targeting
- Data and tools
- Customer relationship
management systems
Exciters
- Leadership
- Compensation
- Motivation programs
- Meaningful work
Controllers
- Performance Management
- Coordination systems
- Vertical and horizontal
communication
- Compensation
Definers
-Sales strategy
- Customer segmentation
- Customer offering
- Sales process
- Go-to-market strategy
- Sales force design
- Structure and roles
- Size
- Territory alignment
- Skills
- Capabilities
- Values
- Customer insight
- Inspiration
- Motivation
- Expectations
- Success measures
- Roles
- Territories
- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson /
activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Leuven Gent Management School
Career paths and coaching need more attention
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We have clear documented job descriptions
including career paths for our sales force
We have clear objectives evaluating our
sales managers on the extent to which they
coach their sales people
Agree
20%
Completely
Agree
10%
Completely
disagree
7%Disagree
16%
Neither
agree nor
disagree
19%
Somewhat
agree
15%
Somewhat
disagree
13%Agree
12%Completely
Agree
4%
Completely
disagree
7%
Disagree
12%
Neither
agree nor
disagree
19%
Somewhat
agree
20%
Somewhat
disagree
26%
© Vlerick Leuven Gent Management School
Objective setting and compensation systems are
more in line with sales force expectations
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We set different performance objectives
based on the profile of the salespeople
Our compensation schemes are linked
to our evaluations
Agree
20%
Completely
Agree
11%
Completely
disagree
9%Disagree
14%
Neither
agree nor
disagree
8%
Somewhat
agree
24%
Somewhat
disagree
14% Agree
23%
Completely
Agree
12%
Completely
disagree
4%Disagree
12%
Neither
agree nor
disagree
14%
Somewhat
agree
27%
Somewhat
disagree
8%
© Vlerick Leuven Gent Management School
Practices
Recruit: Customers/Competition/General sales experience/College Graduates with experience
Training: Product/Commercial skills/leadership skills based on IDP/PDP/PDR
Issues
Recruit: Customers/Competition-quick growth, but stagnate
Recruit College Graduates: Lack of university programs with sales curriculum
Training: Lack of specific sales management
Insights: Shapers
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© Vlerick Leuven Gent Management School
Practices
Coaching: Increased
focus/ sales manager
evaluation criteria
Compensation: a lot of
focus paid on this issue
Issues
Coaching: Lack of
time/span of control
issues
Compensation:
Incentives to facilitate
cross-selling.
Insights: Shapers
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© Vlerick Leuven Gent Management School
Sales Force Effectiveness Drivers
Shapers
- Recruiting
- Training
- Coaching
- Culture formation
- Compensation
Enlighteners
- Customer Research
- Targeting
- Data and tools
- Customer relationship
management systems
Exciters
- Leadership
- Compensation
- Motivation programs
- Meaningful work
Controllers
- Performance Management
- Coordination systems
- Vertical and horizontal
communication
- Compensation
Definers
-Sales strategy
- Customer segmentation
- Customer offering
- Sales process
- Go-to-market strategy
- Sales force design
- Structure and roles
- Size
- Territory alignment
- Skills
- Capabilities
- Values
- Customer insight
- Inspiration
- Motivation
- Expectations
- Success measures
- Roles
- Territories
- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson /
activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Leuven Gent Management School
Decision-making process mainly rests with sales
managers and/or headquarters
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© Vlerick Leuven Gent Management School
CRM tools implementation is a mixed bag
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Agree
12% Completely Agree
5%
Completely disagree
7%
Disagree
14%
Neither agree nor
disagree
19%
Somewhat agree
25%
Somewhat disagree
18%
We are quite successful in implementing CRM tools & getting
the buy-in from the salesforce
© Vlerick Leuven Gent Management School
Practices
Customer Research: Increased importance of strategic marketing
Data and Tools: Value propositions, pricing policies, distributor management
CRM: Perceived Benefits/ Ease of use, link to soft KPIs
Issues
Customer Research: Sales vs marketing
Data and Tools: Centrally/Regionally developed
CRM: Value communication, Usage rates, centrally implemented, big brother
Insights: Enlighteners
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© Vlerick Leuven Gent Management School
Sales Force Effectiveness Drivers
Shapers
- Recruiting
- Training
- Coaching
- Culture formation
- Compensation
Enlighteners
- Customer Research
- Targeting
- Data and tools
- Customer relationship
management systems
Exciters
- Leadership
- Compensation
- Motivation programs
- Meaningful work
Controllers
- Performance Management
- Coordination systems
- Vertical and horizontal
communication
- Compensation
Definers
-Sales strategy
- Customer segmentation
- Customer offering
- Sales process
- Go-to-market strategy
- Sales force design
- Structure and roles
- Size
- Territory alignment
- Skills
- Capabilities
- Values
- Customer insight
- Inspiration
- Motivation
- Expectations
- Success measures
- Roles
- Territories
- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson /
activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Leuven Gent Management School
Insights: Exciters
Motivation Programs
1. Sales Competition at local/regional/global level to
highlight talent for salespeople/sales managers
2. Sales Contests
3. Promotions
4. Training programs for high potentials
5. Special career paths
6. Merit Increases
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© Vlerick Leuven Gent Management School
Sales Force Effectiveness Drivers
Shapers
- Recruiting
- Training
- Coaching
- Culture formation
- Compensation
Enlighteners
- Customer Research
- Targeting
- Data and tools
- Customer relationship
management systems
Exciters
- Leadership
- Compensation
- Motivation programs
- Meaningful work
Controllers
- Performance Management
- Coordination systems
- Vertical and horizontal
communication
- Compensation
Definers
-Sales strategy
- Customer segmentation
- Customer offering
- Sales process
- Go-to-market strategy
- Sales force design
- Structure and roles
- Size
- Territory alignment
- Skills
- Capabilities
- Values
- Customer insight
- Inspiration
- Motivation
- Expectations
- Success measures
- Roles
- Territories
- Selling Process
Impact
ImpactThe Sales job The Salesperson
Salesperson /
activity
Source: « The Sales Force as an engine of organic growth » by Bernard Quancard and Andris Zoltners, Velocity 2009
© Vlerick Leuven Gent Management School
Well documented, hard objective measures
seem to be in place
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We are evaluated more on hard, objective
measures than soft, subjective ones
We have clear, well documented
processes for evaluating the sales
force
Agree
29%
Completely
Agree
9%
Completely
disagree
2%Disagree
11%
Neither
agree nor
disagree
12%
Somewhat
agree
24%
Somewhat
disagree
13%Agree
14%
Completely
Agree
10%
Completely
disagree
4%
Disagree
11%Neither
agree nor
disagree
21%
Somewhat
agree
20%
Somewhat
disagree
20%
© Vlerick Leuven Gent Management School
Practices
Performance
management: Central
guidelines, decentrally
implemented
Criteria adjusted for
sales profiles
Focus more on hard
measures than soft ones
Limited number of KPIs
Issues
Performance management: Too many exceptions
Heterogeneity in maturity of sales profiles in different subsidiaries
Move towards solutions/services makes actual margin calculation difficult
Insights: Controllers
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CONCLUSIONS
© Vlerick Leuven Gent Management School
Overall, salesforce is quite satisfied
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Agree
28%
Completely
Agree
1%
Neither agree
nor disagree
23%
Somewhat
agree
29%
Somewhat
disagree
19%
… but would not
recommend the job
to others
© Vlerick Leuven Gent Management School
Company
results
Sales force
structure and roles
Customer
resultsActivitiesSalespeople
Definers Shapers Exciters Enlighteners Controllers
The Sales force effectiveness drivers
The Sales System
Implementation vs. diagnosis
Source: « Sales Force Effectiveness : A Framework for researchers and practitioners » by Andris Zoltners,
Prabhakant Sinha and Sally Lorimer, Journal of Personal Selling and Sales Management, Spring 2008
Implementation
Diagnosis
© Vlerick Leuven Gent Management School
Set up a balance scorecard to prioritize
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Fix it. NOW. High five!
You can afford
to procrastinate
There are bigger
fish to fry
Impact of the
drivers on
performance
Current performance on the drivers
LOW HIGH
LOW
HIGH
© Vlerick Leuven Gent Management School
Suggestions
Over resource the best opportunities
Take opportunity selection out of the hands of the
salespeople
Involve marketing and marketing tools in opportunity
selection
Push transactional opportunities to cheaper channels
Develop clear strategies to manage channels
Upgrade the consultative selling effort
Equip your sales managers to deal with managing the
sales force during this transition
THANK YOU