Manufacturing: taming the international sales model

Chief Sales Executives in Manufacturing have a lot on their plates these days. Consider the following evolving trends we see affecting manufacturing sales:

1. Expanding product portfolios mean each product division or business unit is looking for more sales time from already stretched sales people
2. Customers are demanding more technically complex and integrated products and services
3. The value of age-old partner relationships is in question as companies strive to have more influence over end-customers

Multiply these vexing issues across global regions and countries and the sales management challenges can seem truly overwhelming. Why bother tackling them on a global basis?

Many large, traditional manufacturers have sidestepped the complications of centrally and proactively managing their global sales strategy with decentralized, local coverage and sales teams. Sales leaders reporting into local country or region Business Unit leadership were disconnected from one another and that was that. Headquarters often assumed the benefit of ‘local knowledge’ justified this model: ‘We can’t presume to know what sales model works best from global headquarters, so let each region do what they feel is best.’ But when it comes to managing an ever more complex selling environment, this model, although it has been the norm in the manufacturing space for decades, leaves much to be desired.

Recently we have seen a decided shift away from this laissez faire approach and a concerted effort on the part of leading manufacturers to bring more discipline to local sales models. Insightful leaders have come to the realization that their legacy global models are “broken,” “sub-optimized,” “ridiculously inconsistent,” “unwieldy,” “disjointed” or worse. When we assess the effectiveness of these models, we find the adjectives to be apt and have added a few more to the vocabulary.

Key Changes Affecting Model.  There are several powerful dynamics that are lessening the appeal of a purely decentralized sale model:

1. Customers are demanding seamless global coverage:  Top customers continue to aggressively consolidate and increasingly are making purchasing decisions globally.
2. Companies are driving more consistent global operations strategies:  Manufacturers have created complex global Supply Chains and are looking to maximize returns through a more coordinated, flexible and responsive sale model.
3. Top executives are discovering the ‘science’ of sales:  With the advent of comprehensive and truly sales-oriented CRM systems and other sales support tools, senior executives are beginning to realize the tremendous advantageous, and realistic, potential of standardizing and leveraging best practices globally in the sales function.
4. There is continued cost pressure to reduce inefficiencies:  Having wrung inefficiencies from global operations, companies are now realizing how truly inefficient many of their local sales models are.

How Leading Manufacturers are Responding to the Challenge

Successful manufacturing executives are responding to these dynamics in specific ways. First and foremost, they are establishing at least some global accountability for regional/country sales teams through new hard line- and dotted line- reporting relationships. They are building a broad-based global sales infrastructure through Global Sales Operations and Account Management programs. This is leading to both the introduction and integration of sales support systems to manage customer contact, dashboard metrics and incentive rewards, among other areas.

Some companies are going even further by breaking away from Business Unit, Sales Channel and Product Silos and creating overarching and empowered global sales organizations focused primarily around customer needs and alignment with strategic goals.

Significantly, insightful leaders are also taking great care not to turn the ship too quickly. They continuously and rigorously assess what parts of the sales model to globalize and what parts to keep local.

The challenges associated with deploying a more globally consistent sales model are immense. But the subsequent rewards in improved customer coverage, sales productivity and sales growth are well worth the journey.

The Alexander Group is currently conducting a comprehensive study of evolving sales models in manufacturing, including international challenges. If you would like to learn more about how we can assist your sales organization, or if you would like to participate in our Manufacturing Industry survey, please reach out to one of our Manufacturing practice leaders.