“Sales is a necessary evil. Sales cannot be trusted.” Have you ever heard these words spoken at your company? That would be a not so subtle sign that your company does not have a strong sales culture. There are several other signs, perhaps less obvious, that sales is considered an afterthought at your company. If you are part of the sales organization, your natural reaction to these statements falls somewhere between annoyance and outrage. But what if you don’t work in sales? What if you are in finance, operations, marketing, or the CEO? Does it matter? Maybe it’s o.k. if sales is just an afterthought.
Competitive Advantage. The reason you might care regardless of what functional area you represent, is because the sales force has the ability to act as a competitive advantage for your company. As many of us have learned from Michael Porter, competitive advantage comes in two main flavors: 1) lower costs and 2) differentiation. Differentiation can take many forms, one of which is a world class sales force. Under the right leadership, the sales force understands customer needs and buying habits which inform market trends and buying behavior, which in turn, inform product innovation. Under the right leadership, the sales force reaches and persuades customer stakeholders with the right messages to transact business that delivers value to the customer and profits the company. Companies that ignore or downplay the significant role the sales organization serves miss out on this form of differentiation. Their success, therefore, must lie in either lower costs or other forms of differentiation.
If your company relies on lower cost as your primary form of competitive advantage, you can ignore the rest of this article. After all, to the extent you have or need a sales force, they are essentially order-taking customer service representatives. If, however, your company relies on some form of differentiation, the basis of which allows your company to earn a decent if not respectable profit margin, you should read on because the sales force can be a key part of your differentiation strategy. Many companies fall down here, failing to recognize the opportunity, or failing to act upon it. Here are five signs that your company may not be leveraging sales as a differentiator, or in other words, that sales in your company may be an afterthought:
- Product silos. If your organization structure is defined first and foremost by product group, sales may be an afterthought. This is exacerbated if the sales personnel report to the different product group General Managers, essentially creating different sales teams by product divisions. Companies with this model struggle to develop company-wide sales culture, to achieve cross-sell opportunities, and to leverage sales best practices across divisions. Organizations structured around customer segments (Enterprise, mid-market, SMB, verticals, partners, etc.) and who create a unified worldwide sales organization or sales teams by customer segment are better positioned to leverage their sales force as a competitive advantage.
- Insular, engineer-driven leadership. Sometimes companies create great products by stroke of luck. Few companies can sustain this without a focus on the customer. Silicon Valley, home to some of the greatest technology companies in the world, also devours dozens if not hundreds of victims every year in the form of failed businesses that designed products nobody wanted to buy. This is certainly true of many start-ups. But established companies are not immune to this syndrome. In fact, success with one product seems to almost breed overconfidence in the development and R&D efforts of other products that seemingly ignore the customer. To create great products you need great engineers. But you also need to heed the voice of the customer, and the sales force can act as a powerful channel in this regard.
- Margin reigns. When push comes to shove, decisions at corporate are made to ensure quarterly margin targets are hit. If this means cuts must be made, so be it. The thought of selling your way out of a slow quarter generally doesn’t arise. Sales forecasts are driven by historical norms. Quarterly margin dollars must be maximized, even at the expense of investments to drive growth. This short-term focus, driven in large part by Wall Street pressures, generally prevents adequate funding for sales. Sales competes for investment dollars with product development, operations and general administrative costs, and typically loses. This behavior, particularly over time, results in an anemic sales function.
- Sales people are second-class citizens. As the Good Book says, “To whom much is given, much is expected.” When the sales function is given little (in terms of investment in headcount and enablement), then little, over time, will be expected. The other function areas receiving higher priority and funding gradually begin to view (or have always viewed) the sales force as a bunch of second-class citizens. It can lead to even more toxic, but all too common views about the sales people as overpaid, undeserving freeloaders. “What do they do all day anyway, play golf?” Sadly, for some organizations, this becomes a self-fulfilling prophecy. After a while, the only sales talent that remains in this environment is the kind you don’t need around. In which case, rather than a form of competitive advantage, the underfunded, undermanaged, uninspired and underperforming sales force acts as a drag on growth.
- No sales career path. When there is limited to no definition of the career path for sales personnel, it’s usually a sign that sales is an afterthought. It usually goes hand in hand with insufficient training, performance management, coaching and development. Sales people with leadership aspirations might make it to first-line manager or regional manager but typically only in player/coach roles that involve a significant portion of their time actually selling as “super closers.” Under this scenario, sales leadership usually lacks a voice at the table of company strategy and direction.
What is the long term outcome of most companies with these signs? In short, poor sales. Top sales talent flees and avoids these company signs. It’s not because top sales talent is not interested in working hard, quite the contrary. They are interested in working where they will be respected, have a voice, be enabled to be successful, and can enjoy the appropriate fruits of their labor.
Does your company show any of these signs? What can you do about it? For help creating a world-class sales organization that can serve as a competitive advantage for your company, contact us at the Alexander Group.
Learn more about AGI’s revenue growth strategy.
Original author: Paul Vinogradov