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Sales a Strategic Boardroom Issue

Guest post by: Peter Gilbert

Article Overview: Long the corporate stepchild, sales has largely been ignored by academics and many executives. However in increasingly competitive markets and increasingly sophisticated buyers a top notch sales force is no longer a nice to have but a must have. Farsighted executives are taking an increasingly critical look at their sales forces and asking searching questions about the ROI they are receiving from this significant investment.

Sales a Strategic Boardroom Issue

Sales – A Strategic Boardroom Issue

Fundamental changes reshaping business require that management view sales differently from the way that it has for the past four decades. Sales has evolved from a tactical to a strategic issue. This is driven by the changing nature of the sales task, which will force companies to change their sales approach, and probably redesign their sales force. If your company is well established, it probably needs a new type of sales force thinking. Customers have changed. Competition has intensified. Your own economics, strategies, and goals have changed. Is it any surprise that sales must change?

One of the reasons few companies excel in sales, is the lack of sales leadership. Mostly the senior leaders of B-2-B sales organisations are more focused on the sales numbers than on the capabilities of their sales forces. One reason for this lack of focus is that most CEO’s have little or no sales experience. Consequently, they tend to think of sales as what Jeff Thull, CEO of Prime Resources Group, calls a “black box”.

“The black box view of sales is an attitude that we frequently find among senior executives who do not have sales experience. To them, the workings of the sales department are largely a mystery. They can set goals and send them into the black box of the sales force, and they can tell whether the goals have been reached – after the fact. But they can’t effectively manage what happens between the two points”.

Also there are issues competing for the attention of senior executives, especially the fulfillment of their corporate mission statements and strategies. Many leaders are pursuing promises to create total solutions for customers or providing the highest quality product or the most competitive price. But mission statements that declare “We will have the most professional sales force in our industry” are far less common.

Sales effectiveness is typically not seen as a competitive advantage worthy of executive attention. Rather, sales is usually defined as a subset of marketing. When sales results meet or exceed their targets, the credit tends to go to the current strategic focus: “Our drive for greater productivity allowed us to price more aggressively”. When the results fall short, however, sales is blamed.
There is ample evidence that running a top class sales organisation is a great competitive advantage. For example, Sales and Marketing Management’s annual sales rankings are based on peer and customer ratings of companies from a variety of industries on seven key performance criteria: recruiting top sales talent, ability to keep top salespeople, quality of training, opening new accounts, retaining accounts, product knowledge, and reputation among customers. Researchers from Harvard Business School compared sales growth against SM&M rankings. The results are unequivocal – sales effectiveness pays handsomely.

The Changing Role of Sales
The 1970s and 1980s were generally a seller’s market. Suppliers operated in an environment characterised by differentiated products, strong demand, reasonable balance between capacity and demand, and well-defined and protected product category boundaries. Good products were enough to drive success. Companies focused on revenue growth without worrying about profitability because, in most cases, when revenues grew, profitability followed. If costs rose, prices were increased. Sales was tactical. Since those halcyon days, the situation has changed dramatically, customers are sending clear signals about what they expect from suppliers and salespeople.

Why Customers Buy From a Supplier
The most influential factor isn’t competitive pricing. It isn’t your product’s quality, your product’s innovative features or your company’s ability to deliver a total solution. All of these influence your customers’ buying decisions, none of them is the most influential factor in their decisions. This is the calibre of your salespeople – the sales professionals.

This is well researched. Business customers themselves have placed salespeople in the top spot. Since 1998, statistical analysis of purchasing decisions has demonstrated that the sales professional is the most important factor in determining what customers purchase, how much they pay, and how long they continue to buy. In fact, analysis has proved that salesperson effectiveness accounts for 39 percent of customers’ buying decisions .

This development in sales, represents the emergence of a new competitive advantage in the B-2-B sales. Sales professionals have become the dominant influence on their customers’ buying decisions. Consequently the effectiveness of sales professionals becomes an added value to their customers and a competitive advantage for employers. In the business world, the salesperson is the sale.

Translating Customer Wants Into Sales Excellence
Interviews with tens of thousands of executives have yielded valuable insights into the expectations that customers have of truly professional B-2-B salespeople and, incidentally, there are precious few of them around. Hiring sales talent is a critical business issue

1: “Be personally accountable for our desired results”.
The best salespeople, winning most of the business, take personal responsibility for the customer’s results. These salespeople neither do all of the work that is required themselves, nor are they directly employed by their customers. But they do act as the single point of contact for the customer and they ensure that customers buy the best solutions and achieve the value they expected.
2: “Understand our business”
This rule flows logically from the first: in order to personally manage a customer account, salespeople must understand the customer’s business. This means understanding how the customers’ business works – it’s competencies, business strategies and organisational culture. It means understanding the customer’s customer. It means seeing the customer’s business as its CEO sees the business.

3: “Be on our side”
Although customers have little or no control over what happens to their purchases within the seller’s company, the seller’s internal processes can have a tremendous impact on the results they obtain. For this reason, customers expect salespeople to be their representatives within the seller’s organisation. The best salespeople ensure that the solutions that their customers have purchased move through their own companies as required and promised. When necessary, they manipulate their own company’s systems to see that the customer is properly served.

4: “Bring us applications”.
Customers want outcome focused salespeople. They want to know how to use products and services to achieve their goals, and they want to be sure the solutions they buy can be properly implemented in their unique environment. That’s why the best salespeople act as consultants, focused on delivering business value

5: “Be easily accessible”.
The expansion of corporate boundaries has been accompanied by corresponding growth in customer demand for local, accessible sales representation. Today’s best salespeople are travelers spanning geographic, political, and cultural boundaries to instantly relieve customers’ stress.

6: “Solve our problems”.
Once the closing of the sale marked the end of the sales engagement and the salesperson’s responsibilities. Today, the closing of the sale simply marks the end of the beginning. Customers expect salespeople to solve their problems throughout the full term of the business relationship. The best salespeople act as troubleshooters who realise the inevitability of problems and, instead of hiding from them, commit to solving them quickly and effectively.

7: “Be innovative in responding to our needs”.
Because change is the only constant, your customers expect you to respond with proactive, continuous innovation to their spoken and unspoken needs. To meet this demand, the best sales professionals adopt the role of innovator, acting as the point person in this effort and, as the closest customer contact, being the first to recognise and react to new business opportunities.

These are the rules and roles representing your customers’ definitions of world-class selling in business-to-business markets. They are also the quickest route to the only direct source of sales success – the customer’s decision to buy.

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Article Tags: boardroom, ceo, common sales, competitive advantage, corporate mission statements, executive attention, fulfillment, fundamental changes, highest quality, jeff thull, management view, prime resources, professional sales force, promises, quality product, resources group, sales approach, sales effectiveness, sales numbers, senior executives



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