In the continuous hunt for profitable growth, silver bullets won't fix your sales force. The solutions to most sales force challenges are multi-dimensional. Especially when things are not going well (and sometimes even when they are), sales leaders need to know when evolutionary sales force improvements are enough to drive profitable growth, and when it's necessary to implement a wholesale sales force transformation.
Most evolutionary changes work within the current sales strategy, organizational structure, and sales team. The focus is on getting current sales team members to behave differently. For example, to spend more (or less) time prospecting, to improve customer engagement quality, or to manage the pipeline more effectively. Several operational levers influence sales team activity to help you achieve these ends, including the following.
- Performance management: set expectations and manage against them
- Data and tools: provide salespeople with insights that enable success with customers
- Incentives: motivate high levels of the right sales activity
- Training and coaching: help salespeople develop the competencies they need
Evolutionary improvements can also involve minor adjustments to sales strategy (e.g. focus more effort on specific market segments), tweaks to sales force size or structure (e.g. close a vacant territory in a low growth market) or small modifications to hiring profiles (e.g. start screening candidates on technology skills). But major changes to these more strategic levers require you to graduate your sales force improvement efforts to a more disruptive, transformational change of your sales model and the people on the sales team. Examples include the following.
- Sales process: implement a major change to the sales process, such as a move from a relationship-based to a consultative sales process
- Salesperson profile and recruiting: recruit a different profile of salesperson and eliminate people on the current team who don't fit the new profile
- Sales force structure and scale: specialize (or unspecialize) the sales force or significantly increase or reduce its size, resulting in major realignment of salesperson-customer relationships
Transformational change typically requires a makeover of operational sales force levers as well (e.g. performance management, data and tools, incentives, training and coaching) to keep sales activity aligned within the new sales model.
Sales forces have realized significant performance improvements through evolutionary and transformational change initiatives. Here are two examples.
Evolutionary improvement: Healthcare company Novartis operationalized evolutionary improvement by conducting annual sales force effectiveness reviews. The reviews led to initiatives such as improving customer targeting approaches, and enhancing development programs, coaching tools and performance management processes to reflect the behaviors of top-performing salespeople. These evolutionary improvements contributed to six consecutive years of double-digit top line growth in the U.S., well above the industry average. Many of the improvements were also implemented globally.
Transformational change: Temporary housing provider Oakwood Worldwide implemented a sales force transformation to address changing customer needs that necessitated a move from a relationship-based to a consultative sales approach. It designed a new sales process around the best practices of top-performing salespeople. A large percentage of the sales force did not survive the transformation, but most top performers did. The transformation was supported by changes to operational levers such as sales training programs, coaching processes, and sales enablement tools and metrics. A year after implementation, deal win rates had tripled, sales cycle time had dropped by 50%, and salesperson turnover had declined to under 5%.
Transformational change is usually the best option when customer and company results are seriously threatened, or when an opportunity or environmental factor dictates a drastic rewrite of the sales process. This is easiest to do when you face a crucial event, such as a merger or acquisition, a new company strategy, a major new product launch, a missed financial goal, a change in company leadership, or a major market shift, that acts as a catalyst for change. Transformational change frequently results in a short-term dip in performance, even when done right. You'll get the best results if during the transition you take steps to protect your top customers and your top salespeople who are well-suited to succeed in the new sales model.
The best sales forces make evolutionary improvements all the time.
Copyright (c) 2012 by Harvard Business Publishing. Reprinted with permission.
This blog originally appeared on the Harvard Business Review website: http://blogs.hbr.org/cs/2012/11/improving_your_sales_force_fin.html.