Subscribe to the E-ZineView all E-Zines
by Mike Evans
The recent financial unpleasantness has had a very different impact on each firm that is a customer for IT solutions. This has particularly impacted one group of ICT employees: those sales representatives who must get profitable revenue from a number of different accounts. They face even more challenges than usual when they try to allocate their time between the different opportunities.
It has also made their sales managerís life more difficult. The downturn meant they had to make drastic changes to the number of direct sales representatives they employ and which accounts to allocate to them. At first sight, selecting which sales representatives to retain is business as usual for a sales manager. However, the dramatic rate of change made this task much harder in a much shorter time frame. When a particular sales representativeís revenue dries up, does that imply they were order takers unable to articulate the value of the offer? Or is it that their portfolio of accounts is focused where the rate of ICT spending has declined dramatically?
In some cases, top management demands for tranche after tranche of sales force reductions and changes in the value added distribution channel have meant that changes were piecemeal and opportunistic rather than part of a thought out long-term plan.
Cambashiís market forecasts suggest that we are now going to see a period of albeit slow growth in demand. Future growth will be uneven. For example, some retailers whose business models are changed by secular trends such as the growth in Internet sales will perform well, others will be unable to take advantage or even be disadvantaged by that change. We feel that it is a good time to have a complete rethink of sales channels based on coverage analysis.
Usually a lot of tacit knowledge goes into a good coverage scheme allocating accounts to different sales channels and sales representatives. However, this can be informed by a more statistical approach. Data on industry sector ICT spending trends by customer size by region can be combined with data on individual firmís employment and occupation data and customer sales records to introduce a more rational approach. A case study explains one Cambashi customerís experience with this approach.
This e-Zine article concentrates on territory sales representatives but we would recommend extending coverage analysis to think again both about those accounts with a dedicated sales team and those who are encouraged to buy through indirect, retail and on-line channels. The downturn changed margins and customersí service and risk expectations. As a consequence, the revenue per account that justifies a direct sales representative has changed.
Of course, the result of any reallocation is a loss of continuity and knowledge about accounts. In the short term this can mean that opportunities are missed, as relationships can rarely be passed on intact to a successor sales representative. Typically, the initial time allocation of the new sales representative is not very effective. Also, typically, the time allocation of an incumbent sales representative becomes less effective after a few years as they revisit existing contacts in their comfort zone rather than pursue new contacts. Yet agile time allocation is the key success criteria for any territory sales representative!
New sales representatives spend time learning about the accounts and building relationships rather than selling. Our experience suggests that sales representatives feel pressured to make calls and attend meetings at once. They think their managers measure them by activity in these early days. Training, when it is provided, tends to be focused on product and service line knowledge rather than industry knowledge. Time for research into the business issues in the new accounts is limited. That means that, in initial contacts, the prospective customer can get frustrated that they are teaching the sales representative things that they should already know. Sales managers can fill the gap with coaching, if they have the time. Marketing teams can fill this gap, if they have the material.
It is not as if this information is not available, albeit sometimes well hidden. Certainly the accountís business strategy, organisation and lines of business will be publicly stated. In the first contact with a prospect or customer they can reasonably expect the sales representative to have a good understanding of these. It is setting those into a prospectís industry context that is often more challenging. Who are their competitors? Where are their regional strengths? How do they differentiate? What investments are they making? When these issues are understood it is much easier to build a relationship and move forward to matching the prospectís business need to the providerís solutions.
This is the area where a well-staffed marketing department with the right connections can help sales representatives be much more agile. Potentially they can cover more accounts per territory if they are better informed. By synchronizing their sales calls with the times when business initiatives are current in their target accounts they can increase the return on their time.
An external agency can also help. For example, Cambashi provides workshops and training to its customers to help identify the opportunity in accounts. Often acting as domain experts, we work with clientís account teams to help identify account opportunities. In some cases we integrate our knowledge to support established solution selling processes.
When prior contact with the account was restricted to the sales representativeís comfort zone - perhaps the IT department rather than the line of business management, perhaps the user rather than the decision maker - change can improve performance. A change of sales representative can mean that a fresh, more business-oriented, approach to the account is adopted. In this case, the loss of momentum from changing the sales representative will be outweighed by the effectiveness of future contacts.
Feature Article: How can we help our Sales Representatives be more Effective?
"I come to praise resellers, not to bury them"
Book Review: Shift - How to Change Things When Change is Hard
Connect with Cambashi
If you have an issue or project you'd like to discuss, or want to set up a briefing, please let us know so we can set up a phone, web or in-person meeting.
Cambashi in the PressRead our recently published articles and blogs.
Read the Cambashi Blog
An entire archive of Cambashi insight on exploiting software applications for competitive advantage in the new economy.