Only 40% of a Sales Rep’s time is spent selling
It takes 10 months to get a new Sales Rep’s to be fully productive
55% of Sales Force lack drive or sales skills
79% of Sales Executives say main driver for hitting new targets is improving Sales Rep’s productivity
CRM Systems can boost productivity by 34% and sales by 29%
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Foundation to Corporate Success
The core of a company’s performance is a well rounded combination of a Great Vision, Incentive Management and Execution. It is the role of the Sales Operations and Enablement teams to collaborate with partners in Sales, Finance, HR, Marketing and IT to translate the Organization’s Strategic Goals into Sales Strategies, Motivating Plans and Actionable Processes for the Sales Force.
Agility, Shared Values and Lean Processes across the teams need to be developed in order to drive Sales Productivity and optimize Sales Performance. With the help of the right technology, pin-point analytics and tailored visualizations, Sales Management will have the tools to improve Top Line (productivity) and Bottom Line (efficiency) performance, optimize the Health of the Pipeline and increase the Sales Teams’ ROI.
This website highlights all areas Executives should consider in order to take all sales related processes to the next level and drive the performance of the Sales Organization.
Strategic Elements
WHO ARE WE SELLING TO: Customer Management
Most companies don’t care where the sales are coming from. They think 1$ = 1$ and they disregard wether it is coming from new or repeat customers. In many cases companies actually favor business from new customers. “Acquisition Addiction” is very common and happens when companies set their goal to grow their customer base in an uncontrolled manner.
⊗ One of the most important things in order to optimize your Sales Strategy is to thoroughly analyze who your customers are. A detailed map of your existing or prospecting customer base will help forecasting sales and the company value. The most important knowledge you should expect from good customer insights analysis are:
1. How many customers will we acquire?
2. How long are they going to stay?
3. How many transactions will they make over time?
4. How valuable will these transactions be?
The best tool for analyzing the Customer base is Segmentation and Cohort Analysis, which is the segregation of the market into subunits in order to determine what groups best to serve and where to grow.
In general you need to distinguish between Good vs So-So Customers to determine your Acquisition and Retention strategies. Both strategies originate from the identification of the Good Customer profile and determine how much recourses you spend to acquire new customers and to keep existing customers happy. New customer acquisition strategies should solely focus on finding more of the Good Customers.
Good Customers generally have a high LTV’s (Lifetime Value) or CLV (Customer Lifetime Value). Good Customers are highly profitable because they are more likely to stay, more likely to adopt new products, easier to maintain and cheaper to serve.
New Customers on the other hand have a lower LTV and are generally less profitable because it is more difficult and expensive to turn them into Good Customers. The problem is that most companies are too responsive and careful with EVERY customer because they fear negative consequences if they are not defensive enough. In order to maximize profits however, companies need to become a little bolder with So-So customers e.g. not giving discounts right away. Most of the time Senior Management should focus on the high end and not on the low end.1. Market Segmentation
The Goal is to determine the Segment or Customer group for which the product is most likely to succeed (esp. important for Start-Ups)
For a comprehensive Segmentation (B-B and B-C) you should ask
- Who are the customers?
- Why do they buy?
- How do they make purchasing decisions?
- Where do they purchase the product?
- When do they buy?
Possible Features for the Segmentation
Strategy:
Identify your target segment(s) in which you have a competitive advantage and which project highest (expected) profit margins.
2. Customers: Cohort Analysis
The Goal is to identify the cohort with the Best Customer Profile
Look at Cohorts or groups of customers that show similar acquisition features, using the feature list. Identify what makes customers different and how to find more of the Best Customer profile kind.
The Best Customers are loyal, make purchases, decided to stay with the company and have the highest LTV’s. This group needs to be of highest priority to the company as it represents the highest profit potential in the future. Use the inter and intra cohort Behavioral Analysis to create Good Customer profiles, test the groups and learn how to double down on acquiring Good Customers rather than trying to make So-So Customers into Good ones. It is very expensive and inefficient to “blindly” grow the customer base. Focus rather on quality and on high Customer LTV’s.
Behavioral Analysis
- Sales frequency
- Drop outs
- Move to different vendors / competition
- No longer in need for the product / category
- Move to a different geography
- etc.
- Life Time Value (LTV)
- Generational changes
- Regional changes
- Cultural changes
- Social changes
- etc.
Strategy:
1. Determine the Good Customer Profile (highest LTV) and how they differ from other customers
2. Prioritize all resources to acquire only customers who fall into the Good Customer Profile
3. Be obsessed about keeping Good Customers happy and over focus on this group (c. 20% of the customer base)
4. Provide basic operational efficiency for the remaining 80% of the customer base
Main Take Aways
- Understand New vs Repeat buying on an aggregate and Cohort by Cohort bases
- Know the health of your ongoing Customer base (LTV map over different groups)
- Ramp up acquisition spend to find more of your best LTV Customers
- Keep Best Customers happy and play defense with them
- Be bold and take a little risk with So-So Customers to completely focus on Good Customers
- Build a Culture that tolerates and appreciates Customer Metrics
WHAT ARE WE SELLING: Products & Services
To determine your core selling points and a successful GTM strategy you need to understand what your product / service is to your stakeholders.
A good product analysis is critical in order make the sales efforts more efficient.
In order to define a good GTM strategy you need to know where your product stands in the industry. The Product Life Cycle (PLC) captures how the industry evolves over time and illustrates long term demand vs short term fads.
Pricing
It should be the main goal for the Sales Operations or Marketing group to know what the Customers’ Willingness to Pay (WTP) is. The WTP is the maximum price a customer is willing to spend for the offered product or service and is dependent on multiple factors. It is both, an art and science to derive the right WTP.
Price strategies should be centered around the value of the product in combination with prevailing market conditions.
Identifying the products’ perceived value for the customer is essential to use the right pricing strategy otherwise the incorrect pricing could drive customers away or leave money on the table.
Pricing is all about knowing your customer!
Identifying the right Price
Pricing Strategy should be:
- Centered around the value of the Product
- Considering prevailing market conditions
- Company strengths and weaknesses
- Not dependent on the Product Life Cycle
Get the right Price:
Step1
Classic Customer Survey
a) Identify main product attributes to the customer
b) Derive a perceived value map in relation to the competition
Step 2
Conjoint Analysis
a) Design a Conjoint Survey based on the top 3 – 5 attributes from Step 1
b) Identify optimal Price and Willingness to Purchase (WTP)
Inputs for Pricing Decision
Pricing decisions should be made based on Company Goals, which could be short or long term and could be based on specific products, brands or the firm level.
Profits (Airlines Pricing)
Max Capacity (Services Pricing)
Max Market Share (Credit Card, Transaction Pricing)
Sales (Retail Pricing)
Number of Accounts (Social Media Pricing)
Share Value
ROI (Pharma Pricing)
Survive
Reduce competitive pressure (Wholesale Pricing)
Protect against Retaliation (Amazon Wholefoods Pricing)
Power of Buyer/Supplyer (Retailers, Pravite Lable Pricing)
Exit / Entry cost (Automotive Pricing)
Information oriented – Signal an image e.g. “Made in Germany”
Action oriented – Reduce demand (cigarets), Stabilize demand (Happy Hours), Change patterns (Seasonal Pricing)
Environment aspects (clean water, organic)
Society
Government
Main Take Aways
- Understand the Core Value of your product, which you can analyze from your customer's, complanies or competitor point of view.
- Project the Product Life Cycle of your products to optimize GTM strategies and keep the product as profitable for as long as possible.
- Create perceived product value mappings for your customers and derive their WTP to define the optimal pricing strategy.
HOW ARE WE SELLING: Sales Operations
Its main task is to provide Sales Strategies and enablement of roles, processes and activities within the sales organization to drive both, top line revenue and bottom line performance.
The team manages all Sales Operational fundamentals including:
- Strategic Functions - definition of sales strategies
- Sales Process Planning - sales enablement
- Sales Performance Management - KPI, sales analytics, reporting
- Sales Forecasting - budget and quota setting
- Incentive Management - incentive design and compensation management
- Territory Planning
- Training
- System Management - BI, CRM Management
Who is Selling?
Sales Structure
The right Sales Structure is dependent on the interaction between Goals, Teams, Processes, Location, Strategy and Products of the Company.
Setting up the right Sales Team Structure is integral for the success of the company and to a big extend dependent on the Product Life Cycle (PLC).
1. Sales Teams
Responsibilities:
- Handle one or more Accounts to maximize account profitability
- Can be a combination of Inside, Field and other Sales person
Responsibilities:
- Provides sales execution and support within the Region/ Territory
- Collaborate with National or Corporate Accounts if outside of the Territory
- Good team work between Corporate and Regional groups to support National Account growth
Responsibilities:
- Handle more complex situations and orchestrate cross functional tasks to satisfy customer needs
- Team leader skills rather than individual
- People skills are very important
- Facilitates cross channel unifications (e-commerce, wholesale, retail,…)
- Higher level authority for tough decisions
Responsibilities:
- Generally selling but not responsible to maintain relationship
- Very targeted sales objectives
- Support other sales teams through research, technical, financial or product specific knowledge
2. Team Roles
Responsibilities:
- Maintaining and strengthen existing client relationships.
- Retaining business
- Main contact point for active clients
- Very effective with inbound marketing strategies
Responsibilities:
- Direct, face-to-face interactions
- Self motivator and goal oriented to medet customers and own deadlines (limited supervision)
- Uncover new client relationships and new opportunities
Responsibilities:
- Support the Sales Teams. Primarily Field teams to close business faster
- No or limited customer Interaction
- Investigating leads
- Creating customer Profiles
- Analyzing sales opportunities, trends, KPI’s
Responsibilities:
- Nurture and strengthen existing business relationships
- Ensuring customer satisfaction
Responsibilities:
- Networking and conducting research to identify new business contacts
- Discover new sales opportunities
- Assessing sales potential and priority
- Forecast sales potential results
Responsibilities:
- Focus on specific existing clients
- Finds creative solutions and opportunities to upsell
- Main goal is to foster client retention
Responsibilities:
- Trains sales processes to new sales force
- Trains updated processes to existing sales force
3. Sales Process
Features:
- Separates consecutive steps of the sales process
- Each step is an individualized job/task
- Usually in established and large companies
- Example: Lead Generation -> Sales Development -> Sales Account (closing) -> Client Services (relationship management)
Features:
- Each Sales person is responsible for each step of the sale
- Usually in Startups and small private companies
Features:
- Small specialized groups fulfill specific tasks together
- Works well in enormous sales teams
4. Sales Locations
Features:
- Sales teams and decision making is in one place
- More control over sales teams
- Reduce costs through economies of scale
Risk:
- No ground presence at specific locations
- Less adaption on local customer characteristics
Features:
- Sales teams at various strategic locations (State, Regional, National or International wide)
- Adaption on local characteristics (Culture, Language, Laws, Habits, Times,…)
- Focus on specific strategic areas
- Boost reach on the ground
- Reduction of travel costs
- Less control of HQ
- Fewer economies of scale
5. Sales Strategy
Features:
- Defensive
- Catering sales strategy to Buyers Actions
- Focus on customer goal, needs and interests (incl. training and nurturing of cusotmers)
- Customer relationship is key
- Prioritize existing / retaining customers
- Development of personal sales approaches
- Seamless processes through integration of Marketing and Sales processes
- Find ways to automatically capture as much sellers and buyers data as possible
Tip:
- Focus on customers with high LTV
Features:
- Catering sales process to Sellers Actions
- Tactics to push for new products incl. email, cold calls, visits
- Targeted outreach rather than waiting to be approached
- Focus on new prospects
- Manually capturing customer data and updating the pipeline
- As soon you know how targeted customer segment looks like, repeat the process
Strategy:
Best Practice is a mix of In- and Outbound strategies to reach the goal
Sales Incentive Management
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Analytics
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KPI's
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CRM Systems
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Forecasting
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Visualization & Reporting
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