Part 1 : Planing
Chapter 1: The Changing World of Sales Management
Overview
Don’t fight forces; use them. —FULLER SHELTER (1032 A.D.)
What a world of shifting business currents we live in! How can you be expected to meet your sales management goals when the tides of change have become a constant condition? Sometimes these tides move in steadily, and other times they surprise us as they suddenly surge up from unknown waters. For some reason, though, they never seem to pause and rest. When these tides of change do occur, it can often be a challenge just to keep from getting swept away by their momentum. It may be hard to visualize their direction or predict where they will carry you and your team, even for a transient period. You hope, with a sense of desperation, that the tide is moving predictably toward a new reality, but that may not be the case. All this uncertainty has placed a new burden on sales managers. We can resist these forces of change or we can leverage them for greater gain. But we first have to know where they are and where they are going.
One of the first driving forces of change is technology. Not very long ago, your customers knew about the products or services your organization offered through trade shows, promotions, or personal contacts with sales professionals. Now, however, technology has given customers the ability to search out providers from anywhere on the globe. With such an enlarged supplier pool, customers are demanding multiple channels of access to your corporation and multiple tiers of support. This has led to vendor reduction plans, strategic supplier alliances, and meet-me-in-the-middle selection processes. Customers want to know less about the features and functions of your offering and more about what your entire organization can do to solve their perceived business problems.
The next driving force is the pace of business. It has sped up so quickly that there is little, if any, time to rest on your laurels. A new idea or a new approach to your customer base quickly becomes outdated by the changing demands of the addressable marketplace. If you can’t, or won’t, meet the changing expectations of those who buy from you, they will switch to another provider of similar value before you know what’s happening. This switchability means that companies and organizations must be in a state of continual reinvention just to stay even.
You can also add in such factors as globalization, evolving competition that looks very different from traditional competitors, shifting lifestyles and demographics, increasing mobility of employees and customers, mass customization and markets of one, addressable markets that are getting segmented and fragmented, etc. And let’s not forget the migration to virtual or home-office-based selling.
While all this has been occurring, changes in the economy, along with environmental realities, have led organizations to rethink their bureaucratic structure and start paring away at perceived excesses. The result has been the elimination of many layers of management that were considered ‘‘translation layers.’’ These critical personnel spent the majority of their time messaging information coming to them from above or below and translating the language into a format that would allow it to be understood by those next in line to receive it. The result of the elimination of these layers has been a flattening of the pyramid model for most businesses. Many large corporations went from as many as sixteen layers of management down to four or five. But without these translation layers, the surviving managers have been called upon to fill the communications or analysis vacuum and do the translations themselves—sometimes in functional areas of the business they knew little or nothing about.
The end result is that today’s sales managers spend less time improving the selling skills of their salespeople or becoming personally involved in the sales process than they did in the past. Today, the effective sales manager is the one who thinks and acts like a member of the organization’s management team. He or she provides critical situational realities to strategists and decision makers while structuring the organization’s requirements into a format that will be adaptable by those at the point of customer interface.
To meet this challenge, the effective sales manager must competently assume many roles and, at times, even think up new ones that will lead to greater success. Past personal sales success is of less importance to the organization than the ability to analyze, conceptualize, and strategize. The sales manager of today must understand the changing marketplace, the competition, the general business environment, suppliers, unique characteristics of all team members, cross-organizational support mechanisms, and, most important, the mission and vision of the organization as set out by the leadership team. In other words, to be a successful sales manager, you must be ‘‘the smartest kid on the block.’’
So let’s find out what it is that will make us smart.
Overview
Don’t fight forces; use them. —FULLER SHELTER (1032 A.D.)
What a world of shifting business currents we live in! How can you be expected to meet your sales management goals when the tides of change have become a constant condition? Sometimes these tides move in steadily, and other times they surprise us as they suddenly surge up from unknown waters. For some reason, though, they never seem to pause and rest. When these tides of change do occur, it can often be a challenge just to keep from getting swept away by their momentum. It may be hard to visualize their direction or predict where they will carry you and your team, even for a transient period. You hope, with a sense of desperation, that the tide is moving predictably toward a new reality, but that may not be the case. All this uncertainty has placed a new burden on sales managers. We can resist these forces of change or we can leverage them for greater gain. But we first have to know where they are and where they are going.
One of the first driving forces of change is technology. Not very long ago, your customers knew about the products or services your organization offered through trade shows, promotions, or personal contacts with sales professionals. Now, however, technology has given customers the ability to search out providers from anywhere on the globe. With such an enlarged supplier pool, customers are demanding multiple channels of access to your corporation and multiple tiers of support. This has led to vendor reduction plans, strategic supplier alliances, and meet-me-in-the-middle selection processes. Customers want to know less about the features and functions of your offering and more about what your entire organization can do to solve their perceived business problems.
The next driving force is the pace of business. It has sped up so quickly that there is little, if any, time to rest on your laurels. A new idea or a new approach to your customer base quickly becomes outdated by the changing demands of the addressable marketplace. If you can’t, or won’t, meet the changing expectations of those who buy from you, they will switch to another provider of similar value before you know what’s happening. This switchability means that companies and organizations must be in a state of continual reinvention just to stay even.
You can also add in such factors as globalization, evolving competition that looks very different from traditional competitors, shifting lifestyles and demographics, increasing mobility of employees and customers, mass customization and markets of one, addressable markets that are getting segmented and fragmented, etc. And let’s not forget the migration to virtual or home-office-based selling.
While all this has been occurring, changes in the economy, along with environmental realities, have led organizations to rethink their bureaucratic structure and start paring away at perceived excesses. The result has been the elimination of many layers of management that were considered ‘‘translation layers.’’ These critical personnel spent the majority of their time messaging information coming to them from above or below and translating the language into a format that would allow it to be understood by those next in line to receive it. The result of the elimination of these layers has been a flattening of the pyramid model for most businesses. Many large corporations went from as many as sixteen layers of management down to four or five. But without these translation layers, the surviving managers have been called upon to fill the communications or analysis vacuum and do the translations themselves—sometimes in functional areas of the business they knew little or nothing about.
The end result is that today’s sales managers spend less time improving the selling skills of their salespeople or becoming personally involved in the sales process than they did in the past. Today, the effective sales manager is the one who thinks and acts like a member of the organization’s management team. He or she provides critical situational realities to strategists and decision makers while structuring the organization’s requirements into a format that will be adaptable by those at the point of customer interface.
To meet this challenge, the effective sales manager must competently assume many roles and, at times, even think up new ones that will lead to greater success. Past personal sales success is of less importance to the organization than the ability to analyze, conceptualize, and strategize. The sales manager of today must understand the changing marketplace, the competition, the general business environment, suppliers, unique characteristics of all team members, cross-organizational support mechanisms, and, most important, the mission and vision of the organization as set out by the leadership team. In other words, to be a successful sales manager, you must be ‘‘the smartest kid on the block.’’
So let’s find out what it is that will make us smart.
What’s Expected of You?
What a sense of personal accomplishment you must feel, having been chosen to lead a sales team. All those years of hard work, long hours, and extracurricular activities have paid off in career advancement, greater financial rewards, and increased power to influence decisions and directions. In all likelihood you have been selected not simply because of your sales skills, although they might have played an important part. In fact, it was most likely that you stood out to the leadership team because of your ability to make sound decisions that were in alignment with the goals of the greater organization. But what does that mean when you attempt to define the expectations that management has of you in the new role?
In most cases, management would like to see you grow the revenue. That’s pretty much a given. But what else? Your organization’s leaders probably would like to see you achieve some additional goals besides increased sales. Some other expectations might be:
Increased profitability per sale
Increased sophistication of the organization’s sales professionals
Shortened sales cycles
Improved forecasting and trend analysis
Expanded geographic markets
Deeper or broader market penetration
Client relationship building
Expanded brand recognition
Reduction of perceived sales chaos
Goals and vision alignment
Long-range planning for stability
Market interpretation
Dealing with problem personnel
Cross-organizational partnering
Improved competitiveness
What else?
What a sense of personal accomplishment you must feel, having been chosen to lead a sales team. All those years of hard work, long hours, and extracurricular activities have paid off in career advancement, greater financial rewards, and increased power to influence decisions and directions. In all likelihood you have been selected not simply because of your sales skills, although they might have played an important part. In fact, it was most likely that you stood out to the leadership team because of your ability to make sound decisions that were in alignment with the goals of the greater organization. But what does that mean when you attempt to define the expectations that management has of you in the new role?
In most cases, management would like to see you grow the revenue. That’s pretty much a given. But what else? Your organization’s leaders probably would like to see you achieve some additional goals besides increased sales. Some other expectations might be:
Increased profitability per sale
Increased sophistication of the organization’s sales professionals
Shortened sales cycles
Improved forecasting and trend analysis
Expanded geographic markets
Deeper or broader market penetration
Client relationship building
Expanded brand recognition
Reduction of perceived sales chaos
Goals and vision alignment
Long-range planning for stability
Market interpretation
Dealing with problem personnel
Cross-organizational partnering
Improved competitiveness
What else?
Knowing the Business Realities: Situational Analysis
Situational analysis is simply what it says: analyzing the situation. Before leaping into any action, the sales manager must analyze the business realities to determine what the best action would be. Additionally, after the action has been completed, another analysis must be done to determine the impact of the action on all concerned stakeholders and what, if any, further action must be taken. What situations do you as a sales manager need to collect data on and analyze? Here are a few:
Your industry
Your corporation or organization
Your unit, subsidiary, strategic business unit, division, etc.
Your sales team
Your sales individuals
Your products and/or services
Your distribution channels
Your marketing department
The cross-organizational resources required to meet your objectives
Your addressable market(s) and its industry
The targeted markets of your primary addressable customers
Your primary competitors
The primary competitors of your primary customers
The general environment (the context in which all business must operate)Perhaps the simplest and most effective tool for analyzing the business realities is the S.W.O.T. The letters stand for Strengths, Weaknesses, Opportunities, and Threats. This approach provides clarity, albeit not perfect clarity, to many of the key realities around which you build your plans. You cannot make a sales management decision without knowing these realities. In addition, the answers are not carved in stone, but fluid and continuously changing. As you are going through change, so are your customers, competitors, suppliers, and the general environment. Plan to review regularly and make adjustments based on changed or new information.Let’s take a look at a few of the most important S.W.O.T.s:
Your organization or unit/division/subsidiary (any or all)
Your sales team
Your products and/or services
Your primary competitor
Your primary customer(s) or addressable market (your choice)
Description of S.W.O.T. letters:
S: Strengths of whatever you are reviewing. This is internal to the target being analyzed. It tends to be controllable and focuses on the current or present situation. Here and now, what is strong about the target? Does it have a large and loyal customer base? Are its finances good? Perhaps the company has a copyright or technology that gives it strength.
W: Weaknesses of whatever you are reviewing. This is also internal to the target being analyzed. It tends to be controllable and current, too. An example here might be that the company has a poor distribution model, aging product portfolio, or lack of brand identity.
O: Opportunities consider what might occur in the future for the target of your analysis to gain greater success, particularly if it fixes its weaknesses and leverages its strengths. This is external, less controllable, and future-focused, and might include global expansion, brand dominance, and acquisition of competitors or desired niche product providers that could expand the overall product portfolio. Remember, the company can’t achieve these conditions unless it corrects its weaknesses.
T: Threats to this target’s current and future success, particularly if it does not fix its weaknesses and leverage its strengths. This, too, is external, less controllable, and future-focused. Here we find such undesirable situations as hostile takeovers, bankruptcies, and loss of market share.
Note
Approach this analysis as if you were an outside consultant. Be independent in your thinking, and try not to link any of the states or conditions to any other business or conditional event. If you are reviewing your own company or sales team, do not complete the S.W.O.T. as you compare to other competitors. Why? Because you could easily become self-satisfied that you are better than a competitor, but in the customer’s eyes, you are both failing. In other words, you end up measuring the target against the wrong benchmark. Complete your S.W.O.T. on an individual evaluation only!
S.W.O.T. Example
Your Primary Customer or Addressable Market
Strengths
Weaknesses
Product portfolio
Aging customer base
Cash reserves
Old technology
Management team
Fragmented distribution network
Stable, long-term reputation
Perceived poor customer service
Strong brand identity
Decreasing margins
Defined market position perception
Global infrastructure
Etc.
Etc.
Opportunities
Threats
Diversified product line
Market elimination
New acquisitions
Competition with newer technology
Newer, younger markets
Zero margins due to too many competitors
International markets
International competitors with low labor costs.
Strategic alliances
Pull-through sales by customer service
Etc.
Etc.
To add value to your S.W.O.T.s, circle items on the lists of your Weaknesses and Threats on the right. This is where you’ll need to concentrate your plan.
Situational analysis is simply what it says: analyzing the situation. Before leaping into any action, the sales manager must analyze the business realities to determine what the best action would be. Additionally, after the action has been completed, another analysis must be done to determine the impact of the action on all concerned stakeholders and what, if any, further action must be taken. What situations do you as a sales manager need to collect data on and analyze? Here are a few:
Your industry
Your corporation or organization
Your unit, subsidiary, strategic business unit, division, etc.
Your sales team
Your sales individuals
Your products and/or services
Your distribution channels
Your marketing department
The cross-organizational resources required to meet your objectives
Your addressable market(s) and its industry
The targeted markets of your primary addressable customers
Your primary competitors
The primary competitors of your primary customers
The general environment (the context in which all business must operate)Perhaps the simplest and most effective tool for analyzing the business realities is the S.W.O.T. The letters stand for Strengths, Weaknesses, Opportunities, and Threats. This approach provides clarity, albeit not perfect clarity, to many of the key realities around which you build your plans. You cannot make a sales management decision without knowing these realities. In addition, the answers are not carved in stone, but fluid and continuously changing. As you are going through change, so are your customers, competitors, suppliers, and the general environment. Plan to review regularly and make adjustments based on changed or new information.Let’s take a look at a few of the most important S.W.O.T.s:
Your organization or unit/division/subsidiary (any or all)
Your sales team
Your products and/or services
Your primary competitor
Your primary customer(s) or addressable market (your choice)
Description of S.W.O.T. letters:
S: Strengths of whatever you are reviewing. This is internal to the target being analyzed. It tends to be controllable and focuses on the current or present situation. Here and now, what is strong about the target? Does it have a large and loyal customer base? Are its finances good? Perhaps the company has a copyright or technology that gives it strength.
W: Weaknesses of whatever you are reviewing. This is also internal to the target being analyzed. It tends to be controllable and current, too. An example here might be that the company has a poor distribution model, aging product portfolio, or lack of brand identity.
O: Opportunities consider what might occur in the future for the target of your analysis to gain greater success, particularly if it fixes its weaknesses and leverages its strengths. This is external, less controllable, and future-focused, and might include global expansion, brand dominance, and acquisition of competitors or desired niche product providers that could expand the overall product portfolio. Remember, the company can’t achieve these conditions unless it corrects its weaknesses.
T: Threats to this target’s current and future success, particularly if it does not fix its weaknesses and leverage its strengths. This, too, is external, less controllable, and future-focused. Here we find such undesirable situations as hostile takeovers, bankruptcies, and loss of market share.
Note
Approach this analysis as if you were an outside consultant. Be independent in your thinking, and try not to link any of the states or conditions to any other business or conditional event. If you are reviewing your own company or sales team, do not complete the S.W.O.T. as you compare to other competitors. Why? Because you could easily become self-satisfied that you are better than a competitor, but in the customer’s eyes, you are both failing. In other words, you end up measuring the target against the wrong benchmark. Complete your S.W.O.T. on an individual evaluation only!
S.W.O.T. Example
Your Primary Customer or Addressable Market
Strengths
Weaknesses
Product portfolio
Aging customer base
Cash reserves
Old technology
Management team
Fragmented distribution network
Stable, long-term reputation
Perceived poor customer service
Strong brand identity
Decreasing margins
Defined market position perception
Global infrastructure
Etc.
Etc.
Opportunities
Threats
Diversified product line
Market elimination
New acquisitions
Competition with newer technology
Newer, younger markets
Zero margins due to too many competitors
International markets
International competitors with low labor costs.
Strategic alliances
Pull-through sales by customer service
Etc.
Etc.
To add value to your S.W.O.T.s, circle items on the lists of your Weaknesses and Threats on the right. This is where you’ll need to concentrate your plan.
Customer Values Benchmarking
To continue your never-ending exploration of the business realities, you must now apply some of the results of your S.W.O.T. Please do not think this is the only method you need to apply. Work closely with the members of your marketing department to integrate their macro view of the market with your sales-oriented micro view of the customers. Marketing may be deploying surveys, focus groups, consultants, market research, and other analysis tools to mine for critical information you need to be successful. The marketing staff members can be your best partners.
Let’s take a look at the last S.W.O.T. you completed, the one called ‘‘Your Primary Customer(s) or Addressable Market.’’ If you have a small number of very large, important customers, you probably did the primary customer choice. If you have many smaller customers, you probably chose the addressable market option. Either way, let’s take a look at the Weaknesses and Threats that you’ve circled in red. This is what the decision maker’s mind is locked onto!
Your target customer or market is focused on solving its weaknesses so the threats diminish. This is the very future of the organization and of people’s careers. Remember, your customers are less concerned with how great your products or services are than with what you can do to solve their business problems. In other words, they want help fixing the things in your red circle. Until you, as the sales manager, understand how to capture the mindset of your marketplace, you cannot convey this information to your leadership or construct a viable and competitive plan of action.When you understand the mind of your market, you can benchmark your organization’s competencies against those of your primary competitors in the areas that are most important to your customers. This allows you to determine specific actions you must take in a prioritized manner. Let’s take a look at how you can compare your previous results with the issues that are most important to the customers.
Step 1: Based on the last S.W.O.T. you did, and looking specifically at the Weaknesses and Threats, what do you think your addressable market or primary customer(s) would value most from a supplier/partner? Remember, do not think in terms of your products or services. That comes later. Imagine from the customer’s perspective what business solutions he would need and want to correct his greatest challenges. List even those that you know your organization can’t, or won’t, provide.
Step 2: Now let’s do a little benchmarking. How does your organization stack up in supporting these most important issues to your most important customers ( or )? Remember, don’t rate yourself in comparison to a competitor. If you do, you may become satisfied with your competitive position when the customer is not happy with either (or all) of you. Simply, how do you rate on these issues? It might look like this:
Example
Weakness: Lack of integrated technology
Threats: Loss of market share to Internet-based competitors
Solution: Web-based product ordering system for access by their key clients.
What is needed to fix this weakness?
Rate your organization
Rate your primary competitor(s)
Technology-literate vendors
+/-
+/-
Shared research
+/-
+/-
Technology education forums
+/-
+/-
Etc.
What is needed to counterthis threat?
Creation of a Web site
+/-
+/-
New market position
+/-
+/-
Global alliances
+/-
+/-
Etc.
Developing Critical Objectives
Your analysis may not be perfect, but you certainly can now begin to define the most important critical objectives that you, as the sales manager, must address to be successful. Try to relate your customer’s solutions to sales behaviors. For example, your results may have shown that you are deficient in meeting the needs of your customer’s challenges on one or more of the following:
General response time
New or existing product development
Sales professionalism
Industry, product, services, or applications knowledge
Technology interchange
Safety or quality
Pricing or terms and conditions
Packaging or delivery
Co-marketing support
Distribution model
Value-added resources
Technology transfer
Integration capabilities
What else can you think of?
As we discussed at the beginning of this chapter, the world of sales management has changed. You must now address all of the above factors and address them in a manner that will allow you to prioritize your actions based on the issues that will have the greatest impact on sales and organizational success.
Based on what you have determined is most important to your targeted customer base and comparing your performance against your primary competitor(s), what objectives must you set for your organization, yourself, and your sales team to achieve superior results? Remember, you are now a part of the management team, and it is your responsibility to identify what needs to be fixed and to convey a plan of action in a prioritized management form of communications. No whining and no vague complaints. You need to present clear, concise, and measurable actions that have to be taken based on situational realities.
To continue your never-ending exploration of the business realities, you must now apply some of the results of your S.W.O.T. Please do not think this is the only method you need to apply. Work closely with the members of your marketing department to integrate their macro view of the market with your sales-oriented micro view of the customers. Marketing may be deploying surveys, focus groups, consultants, market research, and other analysis tools to mine for critical information you need to be successful. The marketing staff members can be your best partners.
Let’s take a look at the last S.W.O.T. you completed, the one called ‘‘Your Primary Customer(s) or Addressable Market.’’ If you have a small number of very large, important customers, you probably did the primary customer choice. If you have many smaller customers, you probably chose the addressable market option. Either way, let’s take a look at the Weaknesses and Threats that you’ve circled in red. This is what the decision maker’s mind is locked onto!
Your target customer or market is focused on solving its weaknesses so the threats diminish. This is the very future of the organization and of people’s careers. Remember, your customers are less concerned with how great your products or services are than with what you can do to solve their business problems. In other words, they want help fixing the things in your red circle. Until you, as the sales manager, understand how to capture the mindset of your marketplace, you cannot convey this information to your leadership or construct a viable and competitive plan of action.When you understand the mind of your market, you can benchmark your organization’s competencies against those of your primary competitors in the areas that are most important to your customers. This allows you to determine specific actions you must take in a prioritized manner. Let’s take a look at how you can compare your previous results with the issues that are most important to the customers.
Step 1: Based on the last S.W.O.T. you did, and looking specifically at the Weaknesses and Threats, what do you think your addressable market or primary customer(s) would value most from a supplier/partner? Remember, do not think in terms of your products or services. That comes later. Imagine from the customer’s perspective what business solutions he would need and want to correct his greatest challenges. List even those that you know your organization can’t, or won’t, provide.
Step 2: Now let’s do a little benchmarking. How does your organization stack up in supporting these most important issues to your most important customers ( or )? Remember, don’t rate yourself in comparison to a competitor. If you do, you may become satisfied with your competitive position when the customer is not happy with either (or all) of you. Simply, how do you rate on these issues? It might look like this:
Example
Weakness: Lack of integrated technology
Threats: Loss of market share to Internet-based competitors
Solution: Web-based product ordering system for access by their key clients.
What is needed to fix this weakness?
Rate your organization
Rate your primary competitor(s)
Technology-literate vendors
+/-
+/-
Shared research
+/-
+/-
Technology education forums
+/-
+/-
Etc.
What is needed to counterthis threat?
Creation of a Web site
+/-
+/-
New market position
+/-
+/-
Global alliances
+/-
+/-
Etc.
Developing Critical Objectives
Your analysis may not be perfect, but you certainly can now begin to define the most important critical objectives that you, as the sales manager, must address to be successful. Try to relate your customer’s solutions to sales behaviors. For example, your results may have shown that you are deficient in meeting the needs of your customer’s challenges on one or more of the following:
General response time
New or existing product development
Sales professionalism
Industry, product, services, or applications knowledge
Technology interchange
Safety or quality
Pricing or terms and conditions
Packaging or delivery
Co-marketing support
Distribution model
Value-added resources
Technology transfer
Integration capabilities
What else can you think of?
As we discussed at the beginning of this chapter, the world of sales management has changed. You must now address all of the above factors and address them in a manner that will allow you to prioritize your actions based on the issues that will have the greatest impact on sales and organizational success.
Based on what you have determined is most important to your targeted customer base and comparing your performance against your primary competitor(s), what objectives must you set for your organization, yourself, and your sales team to achieve superior results? Remember, you are now a part of the management team, and it is your responsibility to identify what needs to be fixed and to convey a plan of action in a prioritized management form of communications. No whining and no vague complaints. You need to present clear, concise, and measurable actions that have to be taken based on situational realities.
Chapter Summary
In this first chapter, we discussed the changing world of sales management and what some of the forces were behind this evolution. Additionally, we began to explore how these changes might be leading to a different set of management expectations for you and your sales team. Next we looked at some of the business realities and concentrated on the S.W.O.T. as an excellent tool for capturing many of the most important issues for your company, your department, your competitors, and your customers. Based on the results of this tool, we narrowed down the issues that were most important to your customers and how you and your competitors benchmarked against them.
Finally, you were able to develop a set of critical objectives that will become the foundation for your strategic sales plan. Now you can begin additional planning, preparing, and producing activities based on your plan of action.
In this first chapter, we discussed the changing world of sales management and what some of the forces were behind this evolution. Additionally, we began to explore how these changes might be leading to a different set of management expectations for you and your sales team. Next we looked at some of the business realities and concentrated on the S.W.O.T. as an excellent tool for capturing many of the most important issues for your company, your department, your competitors, and your customers. Based on the results of this tool, we narrowed down the issues that were most important to your customers and how you and your competitors benchmarked against them.
Finally, you were able to develop a set of critical objectives that will become the foundation for your strategic sales plan. Now you can begin additional planning, preparing, and producing activities based on your plan of action.
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