Eight principles of sales force reinvention (part 1 of 4)

In Part 1, Alexander Group identifies eight principles that top companies and their sales leaders used to reinvent their approach to customer coverage.

PRINCIPLE 1: You serve diverse buyer segments … act like it
PRINCIPLE 2: Serve different segments with different sales motions
PRINCIPLE 3: Deliver sales messages that matter
PRINCIPLE 4: Focus scarce investment dollars for maximum return
PRINCIPLE 5: Position your sellers to deliver impact
PRINCIPLE 6: Ask sellers what they need
PRINCIPLE 7: De-isolate the sales function
PRINCIPLE 8: Always be learning

In this article, Alexander Group will discuss details on the first two principles of reinvention.

Revenue growth ambitions are building as companies expect big numbers in 2015. Consider the following:

The numbers in 2015 are expected to show improvement over a solid 2014. At the 2014 Chief Sales Executive Forum (CSE) 15 speakers, from tech, to medical devices to heavy industry, described critical aspects of their growth strategies, from launching new products to opening new markets. Of particular interest were observations on the critical role of Sales in providing the energy and the know-how to power these strategies by focusing less on what products do and more on what products enable customers to do.

There was a hitch. According to a Harvard Business Review article in September 2014, research shows that only 10 percent of business strategies are effectively implemented. Research pinned the blame on the fact that …

“Management embarks on a strategy without considering the realities facing the people who must execute it with paying customers.”

The speakers and companies featured at the 2014 Forum took the opposite approach. They considered the realities facing their sellers and “reinvented” key elements of the sales function to emphasize value over discounts.

Principle 1 – You Serve Diverse Buyer Segments … Act Like It

Alexander Group’s 2015 Sales Pulse Survey found that buyers are broken into three roughly equal categories: Price Seekers, Product Seekers and Insight Seekers.

While about equal in size, these “customer segments” make buying decisions in unique ways:

1. Price seekers; procurement types dominate and focus primarily on price
2. Product seekers; mid-level functional management, in search of superior products and features that meet their specific needs, have a strong say
3. Insight seekers; upper level executives, looking for insight into how products/services can be used to help run their portion of the business better, enter the buying equation

Note that these segments are not defined by what or how much is bought. They are defined by how products are evaluated. Given the size of each segment, savvy sales executives realize they must competently cover all three. As a rule our speakers attempted this by:

• Shifting more expensive talent to cover Insight Seekers, where the ability to deliver value and insight offers critical differentiation
• Pivoting to lower cost coverage of Price Seekers (inside sales, internet, partners) where the focus is on the deal not what the products enable

These two actions are linked; money saved through efficient coverage of Price Seekers can be invested in deeper coverage of Insight Seekers. For example:

• Johnson Controls created three account tiers to more effectively target teams of experts on the very top tier where they would have the most impact.
• Pitney Bowes replaced 75 percent of field capacity with inside sales and partners, while targeting the remaining highly skilled and provisioned account managers on the largest and/or highest potential accounts. Savings in one segment enabled investment in the other.
• Oracle starts virtually every seller in an Inside Sales position where they learn products, customers and solutions. The best are moved into different positions and geographies, and ultimately earn an opportunity to manage accounts in the field. Oracle expects to double the size of its current sales team, maintaining a balance of inside and field resources in the process.

Top sales organizations cover different segments with different resources, aiming for efficiency when covering “price seekers” and effectiveness when covering “insight seekers.” Efficiency in lower margin segments is converted to both cost saving and skill building to ratchet up the level of coverage effectiveness in other segments. Coverage dexterity helps top sales organizations serve all markets well.

Principle 2 – Serve Different Segments with Different Sales Motions

A sales motion is the combination of messages, activities and resources that, taken together, forge the ideal coverage pattern for a particular buyer segment. The ideal motion is the one that delivers the necessary value to the customer at the least cost to the seller. Innovation buyers expect value-laden insights from “experts” to describe and help execute a better way of doing business.

That kind of coverage is expensive and comes with a price premium. Price-oriented buyers, on the other hand, expect timely and efficient delivery of deal terms. A simple sales motion, perhaps delivered via the Internet, is sufficient. As one keynote put it, “Delivering insight on how to improve a business process is a whole lot different than delivering purchase terms.”

Different buyers, different needs, different motions. There are three basic motions that attach to the identified segments:

Note that the Innovation and Product Advocacy motions require understanding of both what is important to customers and how your products connect to this value. Many companies are not poised to execute these motions successfully. CSE Forum Speakers identified two critical questions to assess the degree of “customer centricity”:

1.    Are you fundamentally focused on serving customers or promoting products? Silos of marketing and sales resource dedicated to promoting slices of the product line based on features independent of how customers make buying decisions is a sure sign of “product centricity.” Examples of how companies have pivoted away from such product centricity to align more closely with how customers make buying decisions were offered:

• Oracle organizes its sales and marketing around functional customers, like the CFO or the VP of HR and provisions them with the tools and skills to solve their unique functional problems.
• GE BioProcess went from training account managers on products to teaching them, with the help of Marketing, about what they call “an industry point of view” enabling sellers to bring their clients “perspective and opinions.”
• Accuray began measuring sellers on customer loyalty and satisfaction, working with Marketing to enable deeper pre-sale discovery and post-sale service activities.

2.    Do you have a Sales Operations organization capable of supporting customer-centric coverage? Forum speakers described three important services that their powerful sales ops functions provide:

• TARGET. Sales Ops helps determine what sales motions to deliver to which accounts. Dave Clark, VP of Sales Systems, Service and Solutions at Johnson Controls, offered the following advice, “Organize your effort around customers, not products.” That means understanding what the account and individual buyer needs are, how much they need of it and then deploying the sales resources that will best influence the outcome.
• ARTICULATE. Sales Ops builds out the details of each sales motion to make sure everyone knows who is responsible for what. Sellers and support resources also need guidance on their specific roles and responsibilities in the motion they are implementing. Said Joanne Olsen, SVP at Oracle, sales resources “need a structured process — which really means having a methodology.”
• POPULATE. Sales Ops makes sure each step of each motion is assigned to a customer coverage resource. Bill LePage, SVP of Sales Enablement for Cisco, had to collapse 180 separate roles into 6 (Account Owner, Sales Specialist, Inside Sales, Partner, Sales Engineer, Technical Management) to clearly articulate who was responsible for what in each stage of the sales process. Make it simple, make it doable and hold them accountable.

Great plans get implemented only when jobs are populated, measured and goaled. That is what leading sales operations functions do to make customer-centric coverage possible.

Read Part 2 of this series.