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Economy of force reduction in the sales force
The sluggish economy has taken its toll, even on Google which recently reduced size of its sales force. Other companies such as GlaxoSmithKline, Apple and Sun Microsystems have also reduced their sales forces. Resize the sales force creates a cascading effect on the sales force and customers. My experience shows that when this type of change occurs in the area, turnover and morale of the sales forces are at risk due to the rupture of relations between sales professionals and their clients.
Three important issues must be addressed in scaling of force Sales:
1. Do you have the exact number of sales professionals?
2. Are sales professionals who cover the bills right?
3. Sales professionals are in the right places?
The following tests, the real world process can be used to answer these questions:
1. Create database
The process begins with a data model with elements such as the characteristics of the account, which represents the transfer sales, revenue, margin, volume, potential, account profile and sales visits.
The next step is to complete the data model with the client and perspective. Then, the database should be segmented. There is a wide range of methods for determining reportable segments based on the characteristics account, for example, the definition of industry, products, services and buying behavior. The foundation of the segments have an impact on subsequent stages the implementation process of the sale.
Once the database has been cleaned and segmented, the estimation of potential is the next step. Most companies can charge real income or the level of margin account, but the potential is generally not available. You can hire a sales force estimate the potential at Account, or you can use a "mechanical" process. One route is the specific cost estimate at the national level during industry debate and the level of firm size (or number of employees or annual turnover). Then you can estimate the potential at the account level. Another way to exploit the full potential of the account is more accurate by expenditure at a geographic level, such as costs in Atlanta, which may be different from that of San Francisco. In some sectors such as pharmaceuticals, there are data that can identify the exact level of the expense account. Another option is to build the database of customers. features customers should be included in the database so that the segments of the industry, the number of employees and annual sales at the account level. Based on these characteristics customer, the estimators are established on the basis of the accounts high share of the segment. This estimate is used as an indicator of the possibility for all customers and prospects with similar characteristics.
Once you have the potential to account at a deeper level of understanding of the market can be obtained. For example, analyze market share by product or sector of activity and develop the implications for the deployment of current sales.
The next step is to create profiles user. user profiles are often based on the size and potential customer segments. The profiles can also be based on factors other than the "size" the acquisition process, for example, the range of products, contracts, etc. For example, all accounts that have more potential $ 10 million annually in the profile Jumbo account in the retail segment.
Then, the workload can be defined based profiles into account. The workload is an approach based on the activities and forms the basis for sizing the number of sales missions. Workload is defined as the number of sales calls per period necessary to support current and potential customers. The workload is separated by clients and prospects. There are several sources of information for the design workload structure: a study of automation of the sales force, customer survey, interviews, sales, volume of pre-analysis work and / or process design sales.
Now that the entire database has been integrated and clear, the implementation model can be sold to analyze the gaps, overlaps and gaps.
2. Design sales missions
At this point in the process, the database is complete and validated. The database contains the account customers, potential customers, segments, income, potential, account profiles and workload. Now you are ready to develop scenarios for sales missions. sales assignments are groups of accounts that are aligned to sales representative. You should determine what counts profiles be covered by the sales papers. For example, the accounts are covered by Jumbo Key Account, key accounts and averages are covered by the account administrators, and small accounts are covered by sales representatives in the interior. For each sales function, you need to design specifications based on the load Work in the number of hits per day, many sales are needed. For example, the allocation of time, directors of sales is 60% customer, 20% in the Perspective business and 20% in the no-sale. So we must agree on the number of actual days in the field of trade activities. Continuing the example, there are 150 days available for customer sales calls, and 50 days for the prospects. The design hypothesis is 3 visits per customer per day times 150 days = 600 sales calls, and 50 days on the perspectives of four visits per day amounts to 200 sales calls. In total, 800 have sales calls per year. Now that have the possibility to create missions, one can estimate the number of account managers needed based on the database. In addition, the functions of senior management level Sales can be estimated on the basis of extended supervision. This model of the current and estimated costs (sales representatives and sales managers, first level) is compared with staffing and current costs. In general, the models reveal, is the current deployment of sales is right or, more likely, there are gaps to be taken into account.
3. Creating tasks
Creating tasks is the first step of the sale of application deployment to the field. At this point in the process, most decisions were made centrally. Now, knowledge and domain local buy-in be installed. This is a crucial step in the process which delivered the implementation plan beyond the resources of the center field. An implementation team selected, educated and trained in the work plan. Corporate sponsorship and leadership are aligned with the main field direction. Education and training on the business case for change is developed and offered by the high field direction of levels of sales management. All data are delivered to sales management a higher level.
When the field of sales management are educated and trained, an interactive, hands on sales development allocation period session is ready for operation. Admission for the session design data are classified by sector and geography. A software tool for mapping is used to assist in facilitating the meeting. Participants of the session are adequate resources design and implementation of sales management. A sales manager is chosen to start the process. In addition to the sales manager who reviewed the market, the resources that could be others as a manager or manager of a distribution center located in a previous sales geography. Projected onto a wall chart of accounts is appropriate (based on customers, prospects, segments and / or profiles account.) The sales manager select accounts in the first transfer of sale. Based on the above example, each mission is restricting the sale of 800 visits business year. The sales manager completes the first transfer and sale continues the process until its geography is complete. The process continues until all accounts have been grouped into sales missions. Once the tasks of sales is higher-level tasks sales management are intended. At that time, the model straw (actual costs and estimates) is presented to management for preliminary approval. Final approval of the model can not happen until all areas have been designed. The output of the design session is a list of accounts for the transfer of sales, sales account maps of the mission, organizational structure, summaries income, potential costs and estimates, and the issues and next steps.
4. The role and place
The next step in the implementation process of the sale is for evaluating and selecting the representative incumbents Sales and missions of the first level of sales management. Data should be collected to make decisions concerning the owners meeting in assignments. Some data sources are performance evaluations, self-evaluations, preferences of employees, manager of recommendations, desires relocation, etc. Once you have the sales managers been selected and approved, sales management is called (by geography) to conform to traditional operators in the allocation of the sale. Based on data available, decisions are made to select assignment operators historical sales. Some missions can be left open and can be met from a geography different or foreign. Some operators may not fit the new tasks. In these cases, the roles of others could be an option at times of departure. Some providers not accept the new positions. To prepare for this eventuality, contingency plans must be prepared. Once the preliminary organization is fixed, provided that actual costs are updated in the model.
5. The Risk Transition Plan
When the owners and / or assignments are full open, you can determine the risk of the account to change a sales representative to another. Since the link change key, the sales representative from the accounts and the company, it is necessary to identify and mitigate these risks. The aim is to protect the top-line revenue during this transition. For some, there may be a significant change, for example, "I had the same representative of the last five years. My new representative is now back in business." What if the account is a Jumbo? Other accounts may have the same representative, however we must take into account the risks. The data may show differences in the level of account where changes occur sales representative. At least six major risk factors have been identified: profile of the account, the percentage of revenue as a percentage of sales representative potential change, changing distribution center, change of customer service and quality assessment. All accounts are recorded by the six factors key, and a score calculated. By taking advantage of all these data, a plan can be developed to mitigate risks, for example, accounts with the highest score will risk a face to face with the client and his vice president.
6. One-on-one
We're almost ready to apply to street level. Executive management has approved the organization and staffing costs. The tasks are completed with the lists of accounts and card account. The headlines have been selected. Transition Plan into account the risks is in place. Education and communication have been developed and approved. Step key is a head to head between the sales director and sales representative. The interaction of the application more critical. All work has been done must be presented to sales representative level. And this shall be ensured without fail. Otherwise, all work will be at risk. Thus, the key role of creation application is the first level sales manager. Make sure that the sales of first-level managers are preparing to head to head with education, training, role play activities and tools. Furthermore, the frontline manager of sales experience first hand the design of sales missions and the adjustment process in the allocation of the holders of sale. If any of the sales managers are questionable in the delivery of the communication, his team could one manager to a meeting. Furthermore, since you have identified vendors who are at risk of not accepting the new role, which was scheduled in the early-to-head meetings, and the plan of troops can be deployed if necessary.
Finally, the end of this process real-world proven, you will be able to answer the questions you have the correct number of sales representatives in the right places to cover the right accounts.
About the Author
Bob Malandruccolo is the founder and principal owner of Sales Force Effectiveness Consulting. With over twenty-five years of practical business, management and consulting experience in sales and marketing, Bob has worked with a broad range of clients from Fortune 100 corporations to small, closely-held firms with special emphasis on sales and marketing process implementation. He has worked closely with his clients through hundreds of successful engagements and implementations across multiple industries. Prior to founding Sales Force Effectiveness Consulting, Bob was a Principal in Mercer’s Human Capital Business, specializing in Sales Effectiveness. Based in Chicago, Bob worked with his clients’ sales organizations to achieve improved business impact with special emphasis on sales compensation along with sales coverage design and implementation. He was actively involved in the design of solutions in the areas of sales force sizing, sales force organizational structures, roles, training, automation, forecasting, goal setting and change management. Bob has a BS in chemical engineering from Northwestern University and completed his MBA studies at the Weatherhead School of Management at Case Western Reserve University. He has completed several post-graduate courses in the Business Economics Ph.D. program at the University of Illinois at Chicago. Bob is a frequent speaker, member of World@Work and was recently cited as the “Ask the Expert” in World@Work’s Sales Compensation Quarterly.
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