So far in the 21st century, all eyes are on the results and the Commercial Managers are the main architects and the ones who first measure their ability to achieve them, especially when measuring the direct profitability of the product.
Business managers are going through serious trouble. They have already modified all the cost variables they have been able to, they have modified all the sales charts, they have seen “hunter” and “farmer” vendors pass by, they have created tables and more tables to bring the numbers up to date, minute and second, have increased the number of Clients and still do not obtain the economic advantage that allows them to sleep peacefully. There comes a time that they are reluctant to reexamine all their policies.
After years of reducing costs and applying the "more with less" policies (selling more with less means), growth continues to occupy a central place on the agenda of each manager. The challenge is to achieve profitable revenue growth through improvements in operations.
One of the most accessible and powerful resources is the sales force.
It is true that each side (manager and sales force) have their own conclusions about the things that were done. The managers think that "we have already modified the salary structure, reorganized the team several times, increased training and there is still a lack of productivity", while salesmen argue that "we work more than before, we fill thousands of papers and we are not backed by the quality of the product, order fulfillment or prices ”
Some companies, to group the sides and generate a team among them, hire external advisers, who achieve hegemony and reorganize the structure, but only temporarily, at the time, chaos and concerns reappear, given that these specialists they only manage to increase sales, but not profits and commercial productivity.
The fundamental problem is that the correct diagnosis is not achieved and therefore the specific treatment of productivity problems. The revisions, both of costs, of sales mix, of Clients, of organization and of bonuses are taking place unilaterally and disorderly. The whole problem is never approached globally.
We must also remember what are the most frequent triggers for managers to start reviewing business activities.
1. Stunted growth or loss of market share, wasted opportunities and decreased growth rates.
2. Changes in the Corporate Strategy due to the migration of value to different markets and the need to modify or expand the scope of activities.
3. Change in the commercial approach with the need to focus on the product, the service or the channel.
4. Change in the priorities of the Client with the frequent request for services that are not offered and lost Clients at the hands of the competition (by price, quality, products or services)
5. High or rising cost of sales relative to income and low average productivity per seller
6. Entry of a new competitor due to acquisitions or mergers.
7. Merger or acquisition in the company itself that requires combining sales forces
8. Reduction of personnel and reduction of expenses, both in the sales area or in the company.
9. Change of Leadership with different commercial policies.
An optimization process requires a segmentation into the value of the customer and their priorities and addressing those needs, creating a free sales force with all the time to sell (reducing reports and general meetings) and providing them with the right skills and tools and structure incentives that reward profit generation and new value instead of traditional volume.
Customer Segmentation
Many companies segment based on demographics, but they got caught up in a product-centric approach rather than focusing their segmentation on Customer needs and being able to provide solutions to their problems.
We must be clear about the 80/20 rule, where only 20% of Clients generate the highest income for us, while the rest add very little value to the bottom line. In this way, a gradual increase in sales will be achieved with a sharp reduction in costs.
Another interesting segmentation is according to the Client's needs, since not everyone needs the same approach, some need “consultative” and solution-oriented sellers and others only measure how to get the best price, which is not a disposable Client, but You are a Client with a lower profitability.
In other words, the offer of products, services, prices and preferences should be segmented according to each group of Clients. In this way it would be possible to develop proposals of correct value for each group and thus an appropriate commercial approach. Furthermore, these segments should have continuous controls to be able to perform different mixes in each segment of Clients and their new needs.
Bad Clients are those who do 3 things: they rarely complete an order or delay the purchase decision, they pay late or they do not pay directly and they make irrational demands or decide on a service but they do not want to pay for it. They end up being difficult to handle. How many Clients does your company have under these conditions? This information is a challenge for the company and requires meticulousness, since the value of the Client is not something so obvious.
The answer is not that once these Clients have been identified, it is necessary to stop serving them or offer them products, but to create different service models for them than for the rest, without letting that “special” service model cease to be profitable. In products, many companies create 2nd brands, with cheaper packaging or different presentations, different Skus formats, etc. In services we can do the same, create a differentiation between plots, shorter-term contracts, advance payments with significant discounts, etc.
| Strategies of the | Redesign of | Motivation | |||
| Comercial activity | Commercial process | Sales force | |||
| opportunity | Segmentation | Time management | Organization | Structure and | |
| and comprehension | Productivity | Features | |||
| the client's | Sales | ||||
| Autonomy and | |||||
| Evaluation | Process of | Control | |||
| Of customers | Sales | ||||
| Development of | |||||
| Mix of | Functions of | Capacities | |||
| products | Sales | ||||
| and prices | Recruitment | ||||
| needs | Position | effort planning | Strategies | Motivations | Compensations |
| competitive | Sales | Incentives | |||
| Approach of | Planning | Measurement of | |||
| sales by | Accounts | Performance | |||
| segments | and training | ||||
| Geography, | |||||
| Strategies | coverage and | Support, Coach | |||
| by channels | personal | and alignment |
This segmentation can be done even to approach new clients through free credit and bank information.
Although we know that it is extremely tedious and difficult to classify Clients individually and we tend to convert them into an average (we know how many are going to die of this or that disease, but we do not know who), but we can take groups of clients with similar attitudes and quantify that information with our market and turn it into data mining (analysis of information by searching for trends or anomalies).
Data mining will allow me to differentiate groups of Clients according to their trends or behaviors of purchase, response or payment method. This information should be reviewed periodically to evaluate the stationary behaviors or the change of interest of the Clients.
We must not forget that the group of unprofitable Clients can become profitable if we know how to give them the mix of services they are requiring or, due to the responsibility of the sales force when assuming the transformation of the Client into profitable (it is difficult for a seller to recognize that you have to lose a Client because the company ceased to interest you).
In summary, the segmentation and analysis of Clients should be part of the sales strategies and periodically reviewed to evaluate the relationships that they want to adopt with them. A business must always be for both parties.
Sales Productivity
Sellers often spend much of their time on tasks that contribute little or nothing to the purpose of the sale. For this reason, the redesign of administrative processes or presales can free you from secondary tasks, leaving them time for the attention of Clients.
Standard situation of time management vs. Ideal situation
| Sales 50% | ||||
| Customer Care | Billing 10% | |||
| Other Customer Services 10% | ||||
| Implementation 9% | ||||
| Administrative | Road maps, registration of commissions 6% | Sales 80% | ||
| one% | ||||
| two% | ||||
| Training, reporting, etc. 9% | 3% | |||
| 3% | ||||
| 6% | ||||
| Potential Customer Tracking 6% | ||||
| 5% | ||||
Better use of time can be obtained without adding new resources, it is achieved by reassigning tasks to less productive vendors (if sales increase or times are better distributed, we may need fewer vendors).
In training, there are companies that spend a lot of time and money on sporadic courses and few convincing ones. Sales meetings in many cases focus on administrative activities and goal setting. Both must change and focus on specific and tangible challenges.
A clear example was given in a funeral services company that due to the country's exchange rate policies, passed their dollar rates to the local currency in a ratio of 1 to 1 at the current exchange rate in a market that was no longer attractive.. The talented, well-trained and specialized sales force put a lot of emphasis on business retention and customer service, but the salespeople were not trained to negotiate prices based on the value the customer perceived of the service, and above all because each Client paid a completely different value for the same service, as a result of old Client recruitment policies.
Training based on a pricing model and planning had to be developed to allow sellers to think strategically about each Client and even instill some negotiation skills. The business of pre-sale selling requires consultative sellers and this differs greatly from traditional selling. A consultative vendor must have a thorough understanding of the Client and the application and need for the service offered, but in most cases they do not have the necessary negotiation tool on the service pricing policy.
When the person with both characteristics is not available, the ideal is to rely on the model called "sales team", where each seller fulfills a specific function before the same Client. In this way, each contact with the Client is also professionalized.
Value incentives vs. volume
The most motivated and aggressive sellers are always seeking cash prizes. Traditional systems pay you when you hit revenue or sales volumes, regardless of goals. But the company moves for profitability, which often does not go hand in hand with volumes or income.
A scale of incentives must be created that goes hand in hand with results in terms of more profitable Customers and products. For this, there must be cost analyzes for each service or each step of the service. And that scale of costs must include all stages of contact with the Client (visits, call center, administration, billing, sending newsletters, mail, etc.) since the costs of some general areas should not be distributed equally for all company services.
Summary
Customers today are more sophisticated in purchasing our services, and successful sales efforts are the result of smart moves on a number of fronts: Custom-designed messages, service mix, and pricing for different segments of Clients, development of evaluation tools and training for the seller and alignment of incentives that produce more value than volume.
For this reason, commercial managers, aligned with the needs of the company and based on vendors, must reach profitability levels that could only be achieved based on the information of the Clients that is managed.
The main tool
The most powerful force in human behavior is will power, far more important than motivation or the desire to do something. When the organization learns to use it and decisions are made with determination, projects and improvements are carried out.
Motivation triggered by external stimuli or reward speculation is susceptible to change as more attractive opportunities may arise that make the original reward appear smaller.
Instead, determination implies a deep personal adherence to an intention, an urgent need to produce results. You have to transform ideas into intentions and create a vivid image of the objective to activate emotions. Since the commitment of willpower is intellectual and emotional, it is much richer than the pursuit of a merely rational goal. There is no need to achieve conformities without enthusiasm, and the raw material for forming intentions are attractive opportunities.
It is crucial that sales people have the freedom to choose, and management must help them test their ideas. The best way to create a commitment to specific initiatives and goals is to do it bottom-up.
To act with determination, the right path is to identify opportunities, create an emotional bond, and visualize intention (is it reasonable? What do I gain? Do I really want it?). From there you have to face doubts and anxieties and take personal responsibility without forgetting to control the context, manage emotions and protect self-confidence.
Individual satisfaction and success do not depend on external circumstances, but on personal attitudes, knowledge and skills that allow capitalizing even the most unfortunate situations. Very strong corporate cultures crush the individuality of people, lose the path of organic change and with it the will power that is what will ultimately turn the desired result.
