Executive Insights

Insight

The ROI of a Successful Sales Organization

As progressive companies try to navigate through profound world-wide challenges including digital transformation, new technologies, competition, international conflicts, and recently, a world-wide pandemic, one very easy mistake that corporations make is to take their sales organization for granted.  Too often sales are thought of as a necessary evil.  When sales leaders and sales teams are given corporate support and recognized as the drivers of the corporate mission, the ROI can be extraordinary.  

When engineering builds the perfect product, of course the clients will fall in line to buy. One company even developed an acronym for this “TPTSI” or The Product That Sells Itself.  However, there is nothing farther from the truth.  Corporations need strong professional salespeople, as their front line to customers, new technologies, and new market opportunities.  It is the sales organization that can gain the trust of end users, demonstrate the strength of the product by combining the features and values of the product to the customers need, communicate the needs of the client to product management and engineering, and help the product continue to evolve in the direction that end users are requesting.  

The professional sales organization is the life blood of the organization and the compliment to strong engineering, strong financial management, strong marketing, and strong corporate leadership.  It is the external face of the company.  It is the organization within the company that gains the trust of the client and helps guide its own organization to growth and success. 

Insight

Vice President of Sales, Must Be All Things to All People

One of the most complex positions in any corporation is the VP of Sales.  The person that occupies this role needs to be able to perform many different functions in the organization.  They need to be a strong coach for their sales team.  They need to be able to show the sales team that they add value at many levels, this can come in the form of coaching, strategizing, or face to face calls.  They represent the company as an executive sponsor, but they should also have the skill to be the best salesperson in the room when called into client meetings.  The need to deliver for both their team, and the client.  Internally they need to be able to communicate with all levels of upper management.  To be able to carry on a technical conversation with engineering and product management, a financial discussion with the VP of Finance, and most importantly, a deep business discussions with the President, The CEO and the Board. 

Insight

Forecasting, Combining the Art & Science of Sales

 One of the most critical roles that any VP of Sales must master is the ability to accurately forecast sales.  Based on the reporting cadence of the corporation, forecasts happen on either a monthly or quarterly basis.  They are critical for end of year planning. The ability to provide accurate forecasts has an impact on the whole organization.  A poor sales forecast can lead to either an excess or shortage of inventory, which either means tying up critical dollars in inventory, or upsetting customers when the company cannot fulfill orders.  It has a direct impact when managing the financial position of the company, when the company is providing guidance to their investors.  It has direct impact on either upsizing or downsizing of a company.  Accurate forecast relies on equal parts of art and science.  There are very good CRM tools in the market today, most all of them with a forecasting module.  These modules are only as good as the assumptions and algorithms that go into them.   To provide the best forecast for the corporation, the numbers provided by the tool should only be used as a guide.  The art of sales management is when the manager takes the guidance that is provided by the tool and applies the logic they have gained from analyzing the market, speaking with customers, and conducting detailed reviews with their sales team.  All of these factors must come into play to be able to consistently build accurate forecast that the company can rely on to make the critical business decisions.

Insight

The Challenge of International Sales

As many US organization look to expand their sales operations internationally, they quickly find out there are many challenges in doing so.  There are several common mistakes that are made when embarking on this process.  One of the most common is to put a single salesperson in place, without the necessary support to help make the person successful.  The common thinking is, get me the revenue, and we will get you the support.  This is usually a failing argument.  To be successful, there must be support for the salesperson, which usually means a technical partner that can demo the product and go deep into technical specifications and workflows.  It also means that the client must have access to 24/7 technical support if requested.  

Additionally, there should be a minimal level of investment in localizing the marketing collateral.  In many cultures, the client will not even think about a demonstration until they have studied the collateral.  If the collateral is not translated to a local language the company is missing the opportunity to communicate the value of their product to a potential client.     Without this minimum level of investment, the international expansion is doomed to fail.  Another critical mistake that is made by many US companies expanding overseas is not understanding the business customs of the area where they are trying to do business.  So often, the company will try and use the exact same tactics overseas, only to later find they have lost a sale and insulted a client, without even knowing they have done it.  It is critical to understand the culture in which they are operating in order to thrive in an international market.

Insight

The Value of Inside Sales

 One of the best ways for a company to enhance the value of its sales organization is to build a strong inside sales team.  This can provide many benefits for the organization without adding a huge amount of cost.  Initially, they can free up the outside team to focus their efforts on higher value activities, by either spending more face to face time with their existing clients or freeing them up to see new prospects.  The inside team can help with the day to day, of helping update the CRM, building simple quotes, and managing schedules, all of which are tools that will increase the productivity of the outside team.  

One of the hidden benefits of building and investing in an inside team is that this allows the organization to hire and train their next generation of sales people.  By bringing some in early in their career, it allows the organization to train people in their culture, products, and people.  It provides a growth path within the organization, and in the end produces a more loyal, better trained team.  A benefit for the individual and the organization.

Insight

The Compensation Plan: A Tool to Influence Behavior

The compensation plan is one of the most powerful tools that a company has to influence the behavior of their sales organization.  A good compensation plan should be easy to understand. When a salesperson is managing their territory, they should be easily able to translate their efforts into their paycheck outcome.  When built properly, it should be designed to allow the salesperson to maximize their income and provide the structure for the company to hit their objectives.  

Another common mistake is to make the plan too complex.  Companies overanalyze the plan, and it makes it impossible for the salesperson to understand what they will earn on each sale.  This becomes demotivating for the salesperson and does not drive behavior.  A good plan will have the right balance of making it simple enough to understand to drive behavior, hard enough to achieve, so the team has to work to accomplish their goals and provide what the company requires to achieve the corporate objectives.