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Published: April 24, 2007

 
 

Is Your Sales Force Adaptable?

by Edward Landry, Thomas Ripsam, and Bart Sayer

It’s equally critical to identify the current crop of key decision makers within customers’ companies, a group that may change as customers alter purchasing and decision-making processes. For instance, CIOs are now often involved in decisions about investments in new technologies, whereas decision making used to be less centralized and middle management may have been authorized to make such investments. When a company fails to follow through on this, its sales force often spends too much time with the wrong people.

Step 2: Define the sales approach and sales representative specialization. The information gathered in Step 1 can also be used to answer the questions: “What sales approach works best on each customer?” and “What level of expertise does the sales force need?” The answers to these questions ultimately determine how to equip the sales force to engage in productive interactions with customers. For instance, a company purchasing expensive technology products, like ERP systems, will likely require considerable advice and attention throughout the sale. A retail customer, by contrast, may want some basic “block-and-tackle” merchandising help, for example, in setting up a point-of-sale display or moving inventory onto the floor.

The choice of sales approach then dictates which skills sales reps must have — that is, expertise in the product line (useful for complex items); expertise in customer need (for example, financial-services sales reps may need to be fluent in the distinct concerns of a socioeconomic segment); or expertise in a particular function (for managing a certain aspect of the sales process, such as generating leads or closing the sale). However, specializations are not mutually exclusive and reps may require more than one set of skills to satisfy customers. In addition, like all responses to customer preferences, adjusting the sales approach is a continuous process, one that must evolve as customers’ needs change, companies go after new customers, and companies introduce new products and services.

Step 3: Establish the structure and management model. To successfully implement these adaptive sales force initiatives, companies must decide which “organizational axes” the internal structure should be designed around. For example, if it were decided that sales reps should focus on a product line, then it is likely that sales reps would report to a product manager. Of course, complications arise when there are multiple specializations and therefore multiple axes. In those cases, a “matrix structure” comes into play, in which each sales rep would report to more than one boss — say, a regional manager and a product manager.

Once the basic structure is determined, the number of management levels and direct reports per manager should be chosen. More management levels permit increased specialization and enhanced managerial supervision, but also generate greater organizational complexity and increased costs. Similarly, although a higher number of direct reports per manager keeps overhead low, it also makes it more difficult for managers to give individual salespeople the attention they need.

Finally, in determining how to optimize the sales function, management must also define the working relationships between the sales force and other functions, such as marketing, supply chain, finance, and R&D. The sales function will operate more smoothly if these interdependencies are built into the system rather than dealt with on an ad hoc basis.

Step 4: Create detailed call standards and strategies. Determining which tasks sales reps are expected to perform and how much time should be allotted to each one is often a stumbling block in developing an adaptive sales force. One consumer goods company realized during the implementation of this step that sales reps were spending just 41 percent of their time actually selling, well short of the industry standard. By initiating a series of corrective measures, including drafting marketing templates to cut back sales pitch preparation time and offloading low-value tasks to temporary workers, the company was able to boost actual selling time to 60 percent, well in keeping with best-in-class benchmarks, and generate significant incremental revenue.

 
 
 
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Resources

  1. Johannes Bussmann, Gregor Harter, Evan Hirsh, Ivan de Souza, and Vanessa Wallace, “Winning the Multi-Channel Challenge: Customers, Channels, and Marketing Management,” Booz Allen Hamilton white paper, February 2007: There are three basic principles common to all successful multi-channel management practices across industries. PDF Download.
  2. René Y. Darmon, Leading the Sales Force: A Dynamic Management Process (Cambridge University Press, 2007): Demonstrates how to dynamically manage the sales function via an analysis of the key players throughout the process and a description of the tools available to sales force managers. Click here.
  3. Frank Galioto, Jason Kerins, Steffen Lauster, and Deanna Mitchell, “The Matrix Reloaded: The Multi-Axis Organization as Key to Competitive Advantage,” Booz Allen Hamilton white paper, December 2006: Discusses the benefits of a multi-axis organization (i.e., product/category, geography, function) and demonstrates how to manage this type of organization for success. PDF Download.
  4. Edward Landry, Wendy Millan, Thomas Ripsam, and Bart Sayer, “The Adaptive Sales Force: Five Steps for Staying Aligned with Customers,” Booz Allen Hamilton white paper, February 2007: The piece on which this article is based goes into more detail for industry leaders. PDF Download.
  5. Rosann Spiro, Greg A. Rich, and William J. Stanton, Management of a Sales Force (McGraw-Hill/Irwin, 2007): A soup-to-nuts textbook on sales force management. Click here.
  6. Andris A. Zoltners, Prabhakant Sinha, and Sally Lorimer, Sales Force Design for Strategic Advantage (Palgrave Macmillan, 2004): Discusses the changing role of sales forces and describes how to optimally design them. Click here.
  7. Booz Allen Hamilton’s Organizational DNA Web site: An online resource with further information on effective organizational structure. Click here.
  8. Forum Web site: An online management resource with numerous short articles on sales force effectiveness. Click here.