Building The High-impact Sales Force

BRIEFS

Building the

HIGH-IMPACT Sales Force

The Investment You Can’t Afford Not to Make By Benson P. Shapiro, Adrian J. Slywotzky and Stephen X. Doyle

P

ITY TODAY ’ S SALES force.Oursales

tant group to evolve in a world where

pliers.” They demand lower prices

teams must be on the front line,

success is managed in inches? In fact,

and greater services, meticulous lo-

meeting a hostile, hypercom-

too many of us have neglected our

gistical support, special packaging

petitive world. Since product cycles

sales forces; too frequently we let them

and private labels. Their market pow-

are short, our sales forces must help

operate with an outmoded approach

er enables them to get what they ask

launch new products more frequently

that worked well in the relative ease

for. And our sales forces are supposed

— or deal with commoditization by

of the past but is not up to the chal-

to provide it all.

creating differentiation in the minds

lenge of the harsh environment of to-

of the customers, even when little dif-

day. Consider what we ask of them!

Many commercial customers concentrate their purchases among

ference may be evident. In a nutshell,

Product power has shifted to

a smaller number of vendors so as to

we are asking our sales forces to work

customer power. Key parts of the

dominate these vendors — and it of-

at both ends of the product life cycle

consumer world have consolidated.

ten works. Concentrations in the cus-

curve, where sales quality matters the

Companies like Wal-Mart, Walgreens,

tomer base and worldwide sourcing

most. And, of course, we expect them

Staples and Home Depot dominate

mean that fewer customers have more

to toil profitably in between.

their product categories, able to

suppliers to choose from. Competi-

“break arms” and “muscle their sup-

tion has thus become much more

But who is helping this all-impor-

............................... Benson P. Shapiro was a professor at the Harvard Business School for 27 years, and continues to teach executive education programs there on a part-time basis. Professor Shapiro has an active consulting, public speaking and research practice in Concord, Mass. Adrian J. Slywotzky is the author of “Value Migration” (Harvard Business School Press, 1995) and “The Profit Zone” (Times Business, 1998). Stephen X. Doyle is a sales management consultant based in New York City.

4 Fo u r t h Q u a r t e r ’ 9 8

BRIEFS

intense. The game has shifted from

er significant collection of large ac-

emerged with deep pockets and sig-

hundreds of small transactions with

counts. These changes, coupled with

nificant industry expertise.

hundreds of customers, to fewer, larg-

major logistics innovations, have

Interep responded by emphasiz-

er transactions with fewer, more im-

made selling Campbell products

ing its position as a full-service, added-

portant customers. It has become a

much more effective.

value supplier, clarifying the roles that

block-trading world, with higher re-

The gold standard of sales forces

its salespeople played in delivering

turns and much, much higher risks.

was assembled by I.B.M. in the 1960’s

that added value. The company re-

And our sales forces must deal with

and 70’s, but this stellar group flagged,

aligned its territories to focus on key

this world.

plagued by pride, complacency and

accounts, and key account executives

The profitability across various

company-wide bureaucracy. Yet the

were trained to develop relationships

accounts has become more dis-

sales force was completely reconfig-

that served advertisers’ needs with

persed. Many customers used to pur-

ured in the 90’s, contributing to the

tightly focused, highly integrated mul-

chase at “list price.” Now hardly any-

company’s turnaround.

timillion-dollar media campaigns.

one does. Heretofore sacrosanct

Compensation, for example, be-

offerings like pharmaceuticals and le-

came based on customer satisfaction

gal services now feel the hot breath of

and account profitability; relation-

In essence, we are describing the

competitive intensity and commoditi-

ships between product lines and

evolution of a “Willy Loman”-type

zation. These are not temporary cycli-

salespeople were tightened even with-

sales force to a high-impact sales

cal changes — they appear to be long-

in the context of a complexity of prod-

team. “Selling is dead — there was re-

term, secular developments. And we

ucts and a diversity of markets. Tradi-

spect, and courtship, gratitude in it.

ask our sales teams to succeed here

tional concepts of “account control”

Today it’s all cut and dried...,” said Lo-

as well.

bent toward “shared commitment,”

man, the protagonist of Arthur Miller’s

New measurement and compensation programs reinforced the changes.

Clearly, the sales force is not the

with multiple parts of the organization

“Death of a Salesman.” He was wrong.

only element of competitive advan-

coordinating efforts to contribute sig-

Selling is far from dead. And Loman’s

tage or the only area requiring change.

nificantly to customer success.

wife, Linda, put it right: “It’s changing,

But some companies have rethought

This stuff doesn’t apply only to

how their sales forces can meet the

big companies. Look at the Interep

challenges they confront. Significant-

Radio Store, an entrepreneurial com-

ly, this has meant rethinking how the

mission sales agency providing radio

company, and its products and ser-

spots to advertisers and large adver-

vices, “interacts” with key customers.

tising agencies. Interep thrived ini-

The Campbell Soup Company

tially. Its selling was focused and

had fielded a typical consumer pack-

responsive, it countered competition

Think of your sales force as Smart mis-

aged goods sales force, segmented by

through acquisitions and it encour-

siles with extremely sophisticated

product category; each strategic busi-

aged employee ownership by forming

target selection and locking mecha-

ness unit (e.g., for soups, pickles)

multiple internal companies.

nisms. Here are the four things your

Willy, I can feel it changing.” Here is how you can help your sales force change: Clarify the sales task and answer your sales force’s No. 1 question: What do you want me to do?

selling organization needs to know:

dealt separately with increasingly

As long as radio advertising

powerful major retailers. But then

grew at double-digit rates, general-

Campbell boldly established 12 na-

purpose selling worked. But the busi-

tional retailer teams dedicated to 12

ness environment changed, the in-

major accounts, developing regional

dustry matured, media growth slowed

products, services and orders?

major account teams and shared ma-

and formidable competition arose —

3. Specifically, which accounts — and

jor account teams to deal with anoth-

in particular, a major contender

which people within the accounts

5 Issue 13

1. What are your strategic thrusts, marketing plans and tactics? 2. Howprofitablearevariousaccounts’

BRIEFS

— should they call on? 4. Which products and services should they sell to whom? Develop a winning sales force architecture aligned with customer and profit opportunities.

dependent upon the “want to” factor

training, including the ability to man-

— i.e., motivation. Nothing increases

age multiple, cross-functional account

motivation more than success, when

teams that operate close to the

accurately, promptly and equitably

customer.

measured against an agreed-upon

Those who consistently don’t

target. Today’s market requires the

meet the demanding performance

design and implementation of sales

standards — despite generous train-

Today’s business needs are frequent-

information systems that help sales-

ing, coaching and support — should

ly served by specialized sales and oth-

people understand and track their

be removed as soon as possible for

er functional experts working as an ac-

performance:

the benefit of all.

count team. Realistically, “tidiness”

1. Product sales goals for a customer

and simplicity are not possible when your sales force is big, your customer base large and diverse and your product offerings broad. The organizational architecture must support seamless coordination among sales specialists and other functional experts.

or group of customers. 2. Customer satisfaction and reten-

leagues, develop skills within one’s

your sales force.

Finally, the sales force must be an

tion rates. 3. Account penetration rates and

integral part of your corporate team. If you believe in customer orientation,

profitability. 4. Creation of value and differentiation from the competition.

your connector to the customer has to be connected to the company. As sales forces become increasingly

Specialization provides the opportunity to practice, learn from col-

Manage, motivate and support

Hire selectively, train generously and cull deliberately.

strategic, they will need a higher share of senior management’s attention. It is

functional expertise and do a better

More than five million people in the

a high-investment, high-return propo-

job for the customer. Integration, on

United States are now actively em-

sition. The alternative is neglect, loss

the other hand, is equally important

ployed in sales. But a far smaller num-

of relevance and the conversion of the

because customer satisfaction and

ber have the overall competency and

sales force from competitive advan-

account retention are directly related

skills essential in today’s tightly

tage to cost burden.

to the level of integration among

focused, highly competitive selling

various units serving the customer.

environments.

It is hard to change a sales force, to modernize it to keep up with chang-

Integrate the units with a clear,

For that reason, set strategic

ing customers and to get a step ahead

explicit business strategy; formal

specifications and hire consistently to

of the competition. It takes money, an

management processes such as a

those demands. Focused, customer-

accurate understanding of the nature

coordinated goal-setting and budget-

relevant and persistent training is the

and rate of customer and competitor

ing system; shared incentives, and a

most highly leveraged investment you

change and a significant share of se-

linked information system. Also use

can make in the process of creating

nior management attention. Yet, it is

informal social channels, such as of-

and constantly sharpening the high-

doable (companies, large and small,

fice co-location.

impact sales force.

have done it), and it is invaluable (it in-

In the new selling environment,

creases revenue, profit and the flow of

Measure your salespeople against

the field sales manager plays an in-

vital customer information). It is one

creasingly central role, building ac-

of those rare investments that the

count teams with power and respon-

leaders of tomorrow cannot afford to

Analysis of the most successful cor-

sibility. The manager’s role of coach,

overlook.

porations demonstrates that individ-

teacher, mentor and team builder re-

ual and team effectiveness is highly

quires a significant investment in

the clear goals specified in the sales task.

6 Fo u r t h Q u a r t e r ’ 9 8

Reprint No. 98401