sales force effectiveness determining where to start€¦ · sales force effectiveness determining...

Sales Force EffectivenessDetermining Where to StartOctober 24, 2013

ZS Associates | 847.492.3600 | www.zsassociates.com

© 2013 ZS Associates − 2 −

Mike MoormanManaging Principal, B2B Sales & Marketing, ZS [email protected]

Sales Force Strategy, Effectiveness and Transformation expertiseConsulted with more than 40 companies in 10 industries across the Americas, Europe & AsiaNamed “2007 Consultant of the Year” by Consulting MagazineLectures on sales topics at the Kellogg Executive Education Program

Gerhard GschwandtnerFounder & CEO, Selling Power [email protected]

Host of the Sales 2.0 Conference seriesTrained more than 10,000 salespeople around the world and is theauthor of 17 sales management booksRecipient of the Sales & Marketing Executives International, Inc. 2010 Ambassador of Free Enterprise AwardFounder of Selling Power, the largest publication serving the sales management audience, www.SellingPower.com


Organic Growth Priority


New Buyer … New Seller


New Analytics


Elevating the Sales Function


Quick Poll

Which forces are creating the greatest need or opportunity to invest in your sales force?

1.Organic growth is an executive priority

2.Customer needs and buying processes have changed

3.Data & analytics create an opportunity to better optimize our sales decisions

4.All of the above

5.We do not intend to invest in our sales force in the near-term


“Let’s invest in training and change the compensation plan …..”

“Let’s invest in training and change the compensation plan …..”


Six basic conditions are required for sales force effectiveness

SALES FORCE DESIGN

Effective & efficient coverage of the full target

account universe with a structure & deployment that best fit the value

proposition & sales process strategies

SALES STRATEGY

Customer-focused strategy targeting the best growth

opportunities with differentiated &

mutually valuable offerings

CUSTOMER ENGAGEMENT

PROCESS

Customer-focused & expertly

executed sales processes &

planning that maximize mutual value &

trust

PEOPLE & SKILLS

Sales managers & salespeople with the knowledge,

skills & attributes required to excel at their respective

roles & responsibilities

MOTIVATION

Highly motivated, performance-

focused & accountable sales force committed to “getting it done” &

“doing it right”

SALES OPERATIONS

Highly efficient support capability that provides the sales force with the information, expertise, speed-to-market & efficiency needed to achieve superior performance

Sales Force Effectiveness


SALES OPERATIONS

Drivers

SFE Navigator™

SALES FORCE DESIGN

STRUCTURE

ACCOUNT ASSIGNMENTS TO TEAMS

SIZING AND ALLOCATION

TERRITORY DESIGN

SALES STRATEGY

MARKET INSIGHT

SEGMENTATION

GROWTH PRIORITIES

VALUE PROPOSITION

PRICING STRATEGY

SALES AND MARKETING COLLABORATION

LEADERSHIP ALIGNMENT

CUSTOMER ENGAGEMENT

PROCESS

SALES PROCESS

TARGETING, TERRITORY AND PIPELINE MANAGEMENT

ACCOUNT PLANNING

SALES TOOLS AND ENABLERS

PEOPLE AND SKILLS

COMPETENCY MODEL

SELECTION AND HIRING

TRAINING

COACHING

PERFORMANCE REVIEWS AND ACTIONS

MOTIVATION

CULTURE

METRICS AND DASHBOARDS

GOALS

INCENTIVES AND REWARDS

DATA MANAGEMENT LEAD GENERATION AND MANAGEMENT

REPORTING ANDADMINISTRATION

ANALYTICS PRICING AND CONTRACTING SUPPORT

PLATFORMS AND SYSTEMS

Effective & efficient coverage of the full target account universe with a structure

and deployment that best fit the value proposition and sales process strategies

Customer-focused strategy targeting the

best growth opportunities with differentiated

and mutually valuable offerings

Customer-focused and expertly executed sales processes and planning

that maximize mutual value and trust

Sales managers and salespeople with the knowledge, skills and attributes required to

excel at their respective roles and responsibilities

Highly motivated, performance-focused and accountable sales force committed to “getting it

done” and “doing it right”

Highly efficient support capabilities that provide the sales force with the information, expertise, speed-to-market and efficiency needed to

achieve superior performance

Guiding the Way to a Customer-Focused Growth Engine

SFE Navigator™


The path to success is not always the same

Year-over-year continuous improvement

Transformational

Sales strategy &/or larger scale capabilities change

Incremental


Quick Poll

How would you describe your company’s approach to SFE evaluation?

1.We have an annual process and great SFE evaluation methods

2.We are reactive, but have good SFE evaluation methods to use when we need to

3.We conduct SFE assessments, but we may not be addressing the right drivers

4.We always seem to focus on the same drivers (training, compensation, etc.)

5.We haven’t evaluated our SFE for a long time


SFE NavigatorTM provides a comprehensive and rigorous approach to SFE evaluations and planning

Open access: www.sfenavigator.com

Comprehensive

Objective

Flexible

1. SFE Navigator OR SFE Nav-Lite

2. All drivers or a subset

3. Growth priorities and/or pain-points

Repeatable


SALES STRATEGY

VALUE PROPOSITION: Our value propositions are superior to alternatives, can be effectively tailored, communicated & proven by the sales force & result in mutual value for customers & us.

We have documented all product, service & program elements in our market-offering basket. We know the customer value vs. cost-to-deliver & differentiation for each element by segment & region. We have a customer-driven strategy that specifies which market offering elements will be offered to each segment, which will be standard vs. optional & the degree to which customers & sales can pick & choose.Sales force feedback & purposeful experimentation play critical roles in our new product development.We have compelling “30-second elevator pitches” that succinctly summarize our value propositions in terms of benefits & economic worth relative to customer needs & priorities.We have detailed “baseline” solutions & associated value propositions that sales can tailor to specific opportunities. These baselines are industry, account-type, decision-maker & selling-role specific.

Effectiveness Overall

PRICING STRATEGY: We are able to command the prices that ensure differentiated value to our customers while achieving our revenue & profitability objectives.

Our pricing strategy reflects the value our offerings create for our customers relative to next best alternatives & customer willingness to pay. Our pricing appropriately increases & decreases when additions & deletions are made to our solutions.Our pricing guidelines achieve an effective trade-off between expected win rate & margin contribution.Our salespeople clearly understand & adhere to our pricing strategy.


SALES & MARKETING COLLABORATION: Both sales & marketing are committed to a common go-to-market strategy & they operate as customer-focused partners.

Our sales & marketing organizations work closely & collaboratively to develop our segmentation strategies, our market offering & value proposition strategies & our pricing strategies.Marketing & sales work hand-in-hand to develop & support product, segment, region & sales role specific value proposition collateral & tools.There is a high degree of mutual respect & empathy between our sales & marketing groups. Marketing listens well to sales & sales is committed to providing marketing the time & support it needs.


LEADERSHIP ALIGNMENT: We maximize the company’s overall success while also achieving the objectives of individual business functions, product/service groups, business units & regions.

Our leaders visibly support our sales strategy, articulate clear expectations & lead by example.Sales is well respected in the company & recognized as critically important.We have instituted senior leader committee(s) & management processes that ensure support for our sales strategies across business functions, product or service groups, business units & regions.For key accounts, we employ an Executive Sponsorship Program that ensures coordinated executive involvement in the account, as required, for strategic partnerships & internal resource prioritization.


MARKET INSIGHT: The quality of our customer & competitor insight provides us with significant strategic & tactical advantage.We have centrally maintained & deep insight into customer needs & buying processes encompassing all constituents influencing the decision. We know the addressable potential & propensity to buy at the account, segment & region levels on both a one-year & three-year basis.We know & systematically measure key drivers of customer experience, satisfaction & loyalty. We systematically capture the sales force’s insights.We have centrally maintained & deep insight into the strengths & weaknesses of our competitor’s offerings, value propositions & sales force strategies.


SEGMENTATION: Our segmentation strategy & profiles greatly inform & enable our value proposition, pricing, sales force design & sales-process strategies & execution.Our segmentation strategies differentiate accounts based on: (1) needs & buying processes, (2) addressable potential, (3) relationship with our company & (4) other important factors that predict win rate, deal size, margin & sales force effort requirements.We have detailed & documented profiles for each segment that specify: (1) number of accounts, (2) needs & priorities in relation to existing & potential elements of our market offering, (3) potential for each of our offerings, (4) critical aspects of the buying processes.We are able to identify to which segment all accounts belong.Our segmentation strategy is well understood across our organization.


GROWTH PRIORITIES: Our sales force knows exactly what our must-wins are at a granular level, and we are confident that our sales strategies & tactics always align with our most important growthopportunities.We define sales force growth priorities at a granular level around segments, market offerings, regions and growth source—where possible growth sources are delineated as: (1) penetration, (2) up-selling, (3) solution selling, (4) cross-selling, (5) new account acquisition, (6) retention & (7) pricing.When defining growth priorities we systematically & factually consider both the size of the opportunity & relative attractiveness. We limit the priorities to those that are the most important while not precluding growth in other areas.We clearly communicate growth priorities for the sales force on an annual or more frequent basis.


We don’tdo this

element.

We do this element at 50%

proficiency.

We are leading-practice at this

element.

We do some of the elements but not well.

We do all & are near leading-

practice at half.

We are leading-practice at nearly

all elements.

SFE NavigatorTM Version (Detailed)


SALES STRATEGY

MARKET INSIGHT: We have deep and centralized insight on customer needs and buying processes, on competitors and on other environmental forces critical to the success of our business. The quality of our insights provides us with a significant strategic and tactical advantage.

SEGMENTATION: Our segmentation strategy is factually based on important differences in customer potential, needs and buying processes. Our segmentation includes detailed profiles for each segment, is well understood company-wide and is instrumental to our value proposition, structure and sales process strategies and execution.

GROWTH PRIORITIES: We clearly define and communicate sales force growth priorities at a granular level (e.g., by segments, market offerings, regions and growth sources—where growth sources include penetration, up-selling, solution selling, cross-selling, acquisition, retention & pricing). Our granular growth priorities strongly impact our sales strategies and tactics.

VALUE PROPOSITION: We have detailed and summary-level, segment- specific value propositions that are aligned with customer needs, buying preferences and account potential. Our value propositions are superior to alternatives, can be effectively tailored, communicated and proven by the sales force, and result in mutual value for customers and our company.

PRICING STRATEGY: Our pricing is based on the value of our solutions relative to next best alternatives. Our pricing appropriately increases and decreases as we add or remove elements to our offerings, and achieves a profit-maximizing balance between price (margin) and win rate.

SALES & MARKETING COLLABORATION: Our sales and marketing groups collaborate effectively on market insight, segmentation, growth strategy, value proposition, pricing strategy, sales tools and lead generation and tracking. Both sales and marketing are equally committed to our go-to-market strategy and operate as customer-focused partners.

LEADERSHIP ALIGNMENT: Our leaders respect sales, lead by example and effectively participate in the sales process. Our leaders across business units, regions, segments and product groups are well aligned such that we fully capitalize on the value of our company’s complete product/service portfolio and customer relationships.

We don’tdo thisdriver.

We do thisdriver at 50%proficiency.

We are leading-practice at this

driver.

SFE Nav-LiteTM Version(Simplified)


SFE NavigatorTM follows a proven and flexible process

SALES OPERATIONS

Drivers

SFE Navigator™

SALES FORCE DESIGN

STRUCTURE

ACCOUNT ASSIGNMENTS TO TEAMS

SIZING AND ALLOCATION

TERRITORY DESIGN

SALES STRATEGY

MARKET INSIGHT

SEGMENTATION

GROWTH PRIORITIES

VALUE PROPOSITION

PRICING STRATEGY

SALES AND MARKETING COLLABORATION

LEADERSHIP ALIGNMENT

CUSTOMER ENGAGEMENT

PROCESS

SALES PROCESS

TARGETING, TERRITORY AND PIPELINE MANAGEMENT

ACCOUNT PLANNING

SALES TOOLS AND ENABLERS

PEOPLE AND SKILLS

COMPETENCY MODEL

SELECTION AND HIRING

TRAINING

COACHING

PERFORMANCE REVIEWS AND ACTIONS

MOTIVATION

CULTURE

METRICS AND DASHBOARDS

GOALS

INCENTIVES AND REWARDS

DATA MANAGEMENT LEAD GENERATION AND MANAGEMENT

REPORTING ANDADMINISTRATION

ANALYTICS PRICING AND CONTRACTING SUPPORT

PLATFORMS AND SYSTEMS

Effective & efficient coverage of the full target account universe with a structure

and deployment that best fit the value proposition and sales process strategies

Customer-focused strategy targeting the

best growth opportunities with differentiated

and mutually valuable offerings

Customer-focused and expertly executed sales processes and planning that maximize mutual

value and trust

Sales managers and salespeople with the knowledge, skil ls and attributes required to

excel at their respective roles and responsibilities

Highly motivated, performance-focused and accountable sales force committed to “getting it

done” and “doing it right”

Highly efficient support capabilities that provide the sales force with the information, expertise, speed-to-market and efficiency needed to

achieve superior performance

Guiding the Way to a Customer-Focused Growth Engine

Copyright, © 2012 by ZS Associates. All r ights reserved. SFE Navigator™

1 Required. Develop shared & complete view of sales effectiveness drivers

2 Optional. Deep dive evaluation of components underlying select driver(s)

3 Required. Overall effectiveness evaluation for select driver(s)

4 Optional. Growth priorities assumptions against which driver impact can later be assessed.

5 Optional. Pain points against which driver impact can later be assessed.

6 Required. Driver prioritization based on expected impact

7 Optional. Summary document creation.


2 Optional. Driver Sub-Components Effectiveness


3 Required. Driver Effectiveness Overall


4 Optional. Sales Force Growth Priorities


5 Optional. Internal Pain Points


6 Required. Driver Prioritization


7 Optional. Summary Generation

1. Dashboard Summary 2. Driver Priorities Summary 3. Driver Effectiveness Summary

4. Growth Priorities Summary 5. Pain Points Summary


Benchmarking Example

Effectiveness Top 5 US Market

Effectiveness Bottom 5US Market

** Sales Operations has the 3 lowest scoring drivers and has the lowest overall average effectiveness score at 3.3.

**


Benchmarking Example

• The top two driver improvement priorities across the benchmark companies are: (1) Coaching and (2) Targeting, Territory and Pipeline Management

• However, nearly every driver was identified as a top priority for improvement, with little correlation to industry or size of company

• Pharmaceutical, Biotechnology & Life Sciences (4.6) and Health Care Equipment (4.6) are the industries with the highest average effectiveness scores. All other industries have a combined average effectiveness score of 3.8

• Larger sales forces have higher average effectiveness scores than smaller sales forces (4.3 vs. 3.4 respectively)


Different companies are successfully employing SFE NavigatorTM in different ways

Internally run

ZS facilitated

ZS leading-practices education

ZS parallel evaluation

All Drivers vs

Select Drivers

NavigatorTM

vs Nav-LiteTM


Wrap-up

The sales force is arguably one of the most complex business functions.

For many companies, sales force effectiveness is becoming even more important and more challenging.

The best sales organizations evaluate and improve their sales force effectiveness every year (e.g., SFE approached similarly to TQM).

Occasionally a broader-reaching transformation is required.

SFE NavigatorTM provides a comprehensive, objective and flexible set of frameworks and tools to help evaluate and plan SFE investments.

Internal “blind-spots”, politics and experience can hinder SFE evaluation and improvement efforts. Sometimes a 3rd party can help.


Quick Poll

For which area would you most like to see additional webinar(s)?

1.Sales Strategy

2.Sales Force Design

3.Customer Engagement Process

4.People & Skills PLUS Motivation

5.Sales Operations


www.SFENavigator.comwww.SFENavigator.com

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