Mapping the Future of Media Sales (Part 3)–Sales StructureBy: Matt Bartels Media Sales
The changes in media sales continue at a frenetic pace. Media companies must rapidly adapt to new buyer priorities and asks. Competition is fierce. New product introduction is the new status quo. This puts enormous pressure on the entire revenue generation ecosystem (Marketing, Sales, Fulfillment / Service) to adapt and capture growth opportunities. Sales leaders must instill a sales culture of innovation and change – knowing the sales structure of the future does not look like it does today.
Welcome to Mapping the future of media sales! In part one, we explore how sales investments must shift across reps, managers, enablement and infrastructure. In part two, we address sales strategy, including insights from our media study of ten leading digital sales organizations and how they segment and target customers. Here in part three we discuss Sales Structure and ask, “What does an agile sales organization look like?”
An agile sales organization is one that expands coverage in the marketplace, appropriately prioritizes account targeting and account planning activities, has the right seller(s) at the point of persuasion, and can adapt to the evolution of buyers – all within an acceptable cost of sale.
The structure of a sales organization involves the following three elements:
- Channel Coverage
- Organization and Job Design
- Sales Force Sizing and Deployment
Building an agile sales organization begins by evaluating your channels, or routes, to the customer based on your strategy.
Channel Coverage. The ad sales force of the future actively assesses the effectiveness of routes to the customer — direct, inside, channel and online (or self-serve). Using multiple channels in a coordinated fashion helps expand your reach and optimize your cost to cover. But the increasing number of players in the process adds complexity to the situation. You need a clearly articulated strategy to define the channel and rules of engagement for each market or set of target customers.
A recent AGI survey of ~1,000 media advertising B2B buyers shows a willingness to buy through different channels. Notice the sizable percentage of buyers that prefer to make media purchases over the phone or online. Two out of three buyers for internet and mobile media solutions prefer to buy over the phone or through self-service.
It’s imperative for a media sales force to offer effective phone and online channels in order to capture this demand, and do so at a much lower cost of sales. However, just because clients prefer those mediums, that is not what they often get. Many traditional media organizations have been slow to develop these channels. Does this mean the high touch, direct sales model is going away? Definitely not! Sales leaders must proactively determine the channel coverage strategy based on what is best for both the ad sales organization and the client. While self-serve is a valuable low-cost option for many simple transactions (often more commoditized media buys), higher touch methods are critical for more complex and higher stakes solutions. Solutions that include multiple products and solutions that leverage different platforms or mediums need the voice of a direct seller—mostly to ensure that the client clearly understands the value and ROI of the campaign.
Organization and Job Design. Do we have the right organizational model defined?
The three most prominent ways to organize your sales model are by geography, product or customer. Each is appropriate but has its strengths and weaknesses. For example, a geographic organization is suitable for sales teams with limited solutions and little need to provide industry focus; however, it makes it difficult to cover clients that span multiple geographies. Product organized sales forces provide strong domain expertise but can become confusing to the customer when multiple product sellers are pitching individual solutions. Customer-based organizations can really dig deep on customer needs and provide a universal marketing message, but typically they must be supported by a specialist organization because of a lack of multi-product expertise.
The alternative to the single-focused structure is a combination, or a matrixed organization. These structures can create additional complexity, but they also can address the shortcomings of a single-focused structure. The determining factor in the decision-making process is the structure and buying process of the customer, and the value of the customer to the sales department.
From a job definition standpoint, a sales role must clearly be defined across four dimensions:
- The steps in the sales process they are responsible for
- The customers they are responsible for
- The products, services and solutions they are asked to represent
- The sales strategy (new business, retention, hybrid) they are asked to execute
A proper balance of all four elements is key to ensuring a job is tasked with an appropriate workload and ensures the high value sales personnel have the right type and number of accounts with the time necessary to actively work them. When jobs become overloaded, sellers tend to self-select the efforts that they believe will get them the incentive dollars.
To that end, given the rapid change in marketplace dynamics, sales organizations have been wrestling with trying to understand when to use specialists, how support roles can help to maximize seller productivity, and how to deploy inside sales. The number and type of specialist support continues to expand, particularly to help support the articulation of new and cross-product solutions. More and more sales organizations are using “insight teams” that provide information and trends across markets, products and industries. Client Success Managers, Programmatic Buying Specialists, Video Specialists, and Mobile Specialists are all commonplace roles.
Specialists are always a hot topic. Too often, the role of the specialist isn’t clearly defined, and this can lead to sub-optimized customer coverage. When deployed in an overlay fashion, with four-legged call expectation, they will also increase your cost to serve. However, if they aren’t used, and they are needed, it can stall the growth of new product introduction or new market penetrations. The decision criteria to determine the need for specialists revolve around certain considerations.
- The strategic importance of the product/solution. The more important, the more you should consider a specialist.
- Can you afford it? The more efficient your sales org, the more options you have to use specialists.
- Is the buyer the same? When there is only one buyer, adding more cooks in the kitchen can sometimes be unwanted, or overkill.
- Buyer knowledge. The more knowledgeable the buyer, the more comfortable they are purchasing ad solutions.
- Is the product portfolio complexity beyond the capacity of the generalist sales rep? If existing or new products are extremely complex, in order to properly develop value propositions and client solutions, specialists may be needed.
- Agency sophistication. The more sophisticated the agency, the less likely the need for specialists.
A vibrant Inside Sales team can be a secret weapon for the organization. The term “inside sales” can mean different things to many people. There is a place for multiple types of inside sales deployments. Inside sales can act just like an outside multi-product solution seller, just organized over the phone. One of the many advantages to this is it allows for expanded coverage in the market place. They can help keep focus on potential accounts that have a high propensity to churn revenue, due to lack of focus from the outside reps. For example, account level analysis of small accounts for a recent media organization showed a stunning churn rate of 67 percent year over year revenue for accounts that were less than $10,000 of annual spend. These accounts are prime targets for outbound, inside sales channel.
The aggregate year over year revenue of 104 percent in these accounts clearly masked the sales coverage and job design deficit on these accounts. In this example the field organization clearly wasn’t getting the job done, mostly due to lack of focus on the smaller accounts. An account by account churn of 67 percent is unacceptable. It is the job of the sales organization to uncover these job design flaws.
As buyer knowledge continues to increase, those with higher levels of product knowledge and sophistication may prefer to buy over the phone. We have also seen a trend, as buyers become more familiar and comfortable with the solution offerings, that inside sales can sell more and more of the solution suite.
Finally, inside sales can be a valuable enabler for the sales team when asked to perform pre- and post-sales support activities.
Sales Force Sizing and Deployment. Do we have the right number of roles? Are territories well defined and balanced? Do we have the right manager and support ratios?
Each unique buyer segment should have its own account level expectations. Existing revenue, new product penetration, and new business opportunity should be built into the deployment planning process. Based upon the segment profile, each seller within a defined segment should have both a revenue/head and account load range that is acceptable. Too often sales organizations have loosely defined production expectations for a variety of reasons. This can lead to wide ranges of territory size within a given segment. It happens because of the historical evolution of the territory, existing relationships that sales leaders deem too important to reassign, and a lack of focus on a balanced workload.
These factors can lead to territories that are either under productive with revenue per head ranges too low or the opposite, territories that are overloaded that inhibit the ability of the territory to grow.
An agile sales organization defines the appropriate productivity expectations for each segment. It then actively manages and plans for the appropriate headcount based upon existing and project sales expectation. This leads to a multi-year workforce planning projection of headcount needs by segment.
This bottom up approach provides the necessary input for the manager and support ratios for the core sales force. Manager ratios will vary depending on a number of factors. Some considerations:
- Sales Channel. Outside, Inside or Channel. Outside tend to have lower span of control.
- Sales Motion. Fulfillment, Advocacy, Innovation. As you move from fulfillment selling to innovation, the amount of complexity and value added increases. The manager to rep ratio for fulfillment is generally greater than innovation sales motions.
- Experience of hire profile. Those with less experience will require more manager time, yielding a greater manager to rep ratio.
- Sales efficiency and support. The more support and efficient internal process, the more reps a manager can support.
Summary. Designing an agile sales structure is an ongoing process. Getting it right can lead to great gains in market coverage, sales organization efficiency and accelerated growth. Remaining stagnant leads to missed organizational goals, individual seller frustration and stalled growth. The recipe for success has to be clearly defined, proactively coordinated and actively managed.
Up Next: In our next article we will examine Sales Management – how do we optimally manage, enable and execute our strategy? From determining talent standards, managing sales execution, to rewarding for results.
Need help? Have questions about developing an agile sales structure for your media sales force? Learn more about our Media Sales Practice.