How effective is your sales team these days? Last week I was speaking with a prospective client facing challenges with motivation between his “hunters & farmers”. As synchonicty would have it, the very next day McKinsey Quarterly popped into my “inbox” with the most relevant article entitled “Using your sales force to jump-start growth“.
Here’s the highlights of four innovative steps companies can use their sales reps to drive growth;
Step 1; Look over the horizon
Create a team of “speculative market analysts” to better identify the emergence of disruptive technologies and to predict their business implications. The team helps the company to position itself as a supplier that’s ahead of the curve and to enjoy superior sales growth while competitors scramble to catch up.
The full-time team cuts across all business units and draws on a variety of internal and external sources: the sales force provides insights into the technology initiatives of the company’s customers while continually pressing them for feedback about its shortcomings and the efforts of competitors.
Step 2; Hunt and farm
Designating one day a month as a “hunting day,” when all reps exclusively chase new prospects. The rest of the time they focus largely on existing customers. The result is astounding: in a single day, a company can sign up as many new customers as it normally does in two months. Setting aside one day a month for hunting new business is now an ingrained part of many company’s sales practices.
Step 3; Motivate with more than money
The basic remuneration model for sales reps is simple: a base salary offers security; commissions and bonuses provide incentives to perform. Most companies work endlessly to optimize the balance. Yet what if money isn’t the thing that actually matters most?
The most successful sales teams often speak passionately about the sense of fulfillment that comes from helping clients realize their dreams, goals & objectives. Look for the fundamental reason people have joined your company and make sure that it’s coherent with your Core Ideology.
Money will always remain critical to a sales team, but you must recognize the benefits of identifying other, deeper motivations. When done, attrition rates fall sharply, and sales teams not only become more successful at winning business, but also have found that clients are entrusting more of their needs to the respective companies. These goals are also met with no increase in compensation.
Step 4; Boost sales without slashing prices
Companies experiencing flat or declining sales often elect to cut prices to spur demand. If price guidelines are set without taking into account the competitive dynamics of each specific market segment, only a fragment of your sales force will recoup the cost of the price cuts with higher volumes. When this happens, your overall competitive position deteriorates.
Set new price and volume targets based on each segment’s characteristics. These targets should incorporate metrics such as the economic growth rate in geographies where particular industries were heavy users of your company’s services, the strength of your company’s operational assets relative to those of its competitors, and whether your company is losing or gaining customers at accelerating or decelerating rates.
This granular view of each sales territory leads to new sales approaches. This market-by-market roadmap allowed a case-study company not only to reverse several years of declining market share but also to secure an overall average price increase of 3 percent.