Abstract
The old sales planning techniques should cede the way to new Sales
Intelligence strategies that optimize the management of sales networks.
Sales activity is basic, vital, and very complex
In any company, but especially in sectors that need and intense
and well-sized sales structure. Sales effectiveness and care in
the company’s image are aspects that are kept very much in mind
when selecting, forming, and organizing a sales team. But it is
imperative to go beyond that. Other aspects such as targeting,
- determination of strategic clients -, channel management – maximizing
the efficiency of each channel, managing it according to the
appropriate client segment -, Sales Force Distribution – optimizing
the placement of the sales network -, Sales Force Sizing – sizing of
the sales network -, or portfolio management – assigning the appropriate
resources to the right clients -, contain the key to the sales team’s job
being fruitful and translating into a constant increase in business volume.
These are the consecutive and obligatory steps,
Which we will elaborate on shortly, in order to make the jump from the
old sales planning techniques, still present in many companies, to
New Sales Intelligence Strategies.
In a study conducted by The Economist Intelligence Unit, 1
out of 178 directors from all over the world reveals that 55% of
sales networks is incapable of satisfactorily analyzing
sales opportunities. For 47%, said
opportunities are not managed appropriately,
while 38% declare that their companies do not generate
a sufficient number of sales initiatives. For the great
majority (95%), sales results are normal, under average
or good, but not outstanding. Las conclusions from this study
show that correct Sales Planning and an appropriate
Sales Intelligence Strategy generate virtuous circle of
opportunities and business.
Creating this “opportunity factory” is
absolutely critical: by means of appropriate information
management, every company must be capable of
establishing alarms that alert them to “hot areas”
for sales, “especially potential” clients and contract renovations
or expansions that are “ready to go”. Knowledge of these
business opportunities must be translated into management of
sales activity by CRMs or sales schedules, capable of
systematizing the sales processes with all clients.
The targeting process, or determination of strategic clients
at the origin of an intelligent sales planning. According to this
aspect, it will be possible to design the sales effort that should
be carried out: how many sales reps to assign, what channels
to use, what actions to undertake, in what period of time and
with what frequency of visits. It is about appropriately sizing
our resources and dedicating those necessary where the effort
is worth it. Upon establishing goals, we usually apply what is
known as the SMART rule: they must be specific,
measurable, accorded, realistic and time-related.
Everything varies according to our “target”: if they are
final clients, if they are other companies, or if they are
prescribers, as in the case of physicians in terms of laboratories, or professors in terms of educational
book publishers... These last ones, who we can
also define as “hidden clients”, are not going to create
any type of revenue for the company, but they hold the
key that allows us to reach the final client.
Spanish banking entities, such as La Caixa or SCH, are
successfully carrying out targeting strategies that are
allowing them to determine what strategic clients they
should focus the most sales effort on, and in which ones
to use different channels that optimize the relationship
between client value and assignment of sales resources,
a key to any Intelligent Sales Strategy.
Once the targeted clients have been decided,
a critical aspect in sales force management should
be resolved, such as the appropriate assignment of
channels. Without falling into reductionism, we can distinguish
two channels: direct and indirect. In the first, the company
sells its products or services directly on the market, but in the
second, they rely on intermediaries, which are less controllable,
but which offer a series of advantages: they are experts in their
sector, they have greater negotiating power because they represent
a high market share, and they have greater ability to sell complete
service packages. The existence of new sales channels in the
last few years (Internet, telephone, SMS…) has given rise to two
parallel phenomena: multi-channels, which mines several companies
with great success (such as the banking entity Bankinter) and, at the same
time, what Philip Kotler calls “de-intermediation”. This concept
implies the progressive elimination of intermediaries in order to
achieve maximum profitability from the sales action.
A few examples of “multi-channels” are: the online bookshop
Amazon.com, which has already surpassed the famous
“physical” bookshop Barnes&Noble in sales, has taken
extraordinary advantage of the Internet, but others have
been faced with a dilemma: can a distribution network
be maintained while still selling directly, without hurting
results? For many airlines, travel agencies represented
their best advanced point of sales, but the moment they
began selling tickets on the Internet, they took away an
important revenue source from this type of company. We
can see an example of this in Iberia. In 2004, that company
took in 206.5 million euros in Internet sales alone, which
shows the significant weight of this channel in the company’s
business. This situation is forcing travel agencies to specialize, and they opt for niche
markets as a way to distinguish themselves.
When the company knows which channels it must assign to each client segment, it faces the challenge of sizing
their Sales Force, which is not the same thing as reducing channels and sales reps to a minimum. Sizing means adapting resources to the potential market. The calculation of the sales force size is, however, not an easy task at all. We can distinguish between several mechanisms:
Once sized, the Sales Force must be appropriately place geographically. The most common Sales Force Distribution or Territory Alignment method is geographical: assign resources according to a specific sales area, whether it be postal codes, bricks, “Nielsen areas”, or others…Territory alignment of sales reps improves efficiency if they are focused on small areas as opposed to very large areas, because it is simpler to assign accounts to a specific area than to an extensive one, such as a country or province. More and more, postal codes are what allow us to specify more homogenous and practical territories, since they identify the potential market not only geographically, but also socio-demographically. Once you establish what is called the basic control unit, you can calculate the sales potential of each one and analyze the workload before assigning resources.
If you opt for a sales organization by product, it is possible to take advantage of the greatest degree of sales agent specialization, but if you don’t apply mixed methods, there will be a duplication of effort and costs. Some companies have opted for organizing their sales force based on the function is carries out. This way, they use a team for client prospect ion, contact, negotiation and closing of sales, and another to give post-sales service.
Many companies, especially in the pharmaceutical sector, are moving to the so-called mirror networks, which substitutes the traditional “one head of each area” for “several heads of each area”. These mirror networks, if we go back to the example of laboratories, divide their sales reps by degree of specialization. That way, in one single area, there will be reps in charge of primary care physicians, as well as reps in charge of specialist physicians, each with a very different product and prescriber knowledge.
Focusing on the client as a starting point allows better resource distribution; the most profitable ones will need the most attention, and they are the ones to which you can apply a proactive sales approach, in which the initiative starts, to the greatest possible extent, on the company’s side. This gives rise to what is known as portfolio clients (if we use banking terminology) or selected clients (if we use pharmaceutical terminology). They represent a small proportion within companies, but they constitute the most profitable “target”. In banking, it is estimated that around 10% of clients are portfolio clients, and therefore they make up the greatest sales effort. However, one important challenge consists of properly managing the 90% of non-portfolio clients, for whom the only intelligent solution is systematizing – sales schedules, CRMs…- in a way to create that virtuous business circle, that “opportunity factory” we referred to earlier.
The portfolio process is another example that reflects the enormous transformation that Sales Force management is undergoing. Under this constant change, there lies an unknown that must be urgently resolved by many companies: Do companies control their reps, or is it they who control the company? Do companies manage their sales network as a crucial aspect of their results, or is it the sales network that ends up managing the results by its own criteria? Sales power has rested too much in the hands of sales reps. It is time for Sales Directors to take the reigns, not confronting the sales reps in any way, but rather helping them to sell more and better, exercising an authentic control over information and management.
Use of technology and business intelligence is playing a more and more important role in the execution of sales strategy. “Sales Force Automation” (SFA) has become, along with CRM or EMTS tools, the answer to many problems inherent in the management of teams and sales networks. Using integrated information systems to organize and analyze the market and client situation allows us to be more practical and efficient in making sales provisions, controlling orders, maintaining constant communication with the entire sales network and analyzing sales performance.
While technology is collaborating in the improvement of sales organization efficiency, it cannot be said with the same certainty that sales representatives have immersed themselves entirely in these new tools. It cannot be forgotten that the accounts rest in the sales rep’s hands, and they are the ones that have their finger on the pulse of the client. Many sales reps are reluctant to “turn over” all of their client’s information – a good sales rep always considers a client to be “his” or “hers”, and not the company’s- to a management software so that information they have taken years to gather can be shared by the entire organization. It makes sense: the best guarantee of survival and promotion for a sales rep in the heart of a company is the knowledge they have of their clients.
The solution becomes information exchange: the sales rep must be allied with Sales Management and Marketing, and vice-versa. The sales rep must share information about “his” or “her” clients, the company must sure clues on how to sell more and better, and so be able to meet or go beyond their objectives. This is only possible if the organization has implemented a Sales Intelligence Strategy.