Not long ago I was speaking at a national sales meeting for a large regional distributor. The regional vice president for the company’s primary manufacturer was at the meeting, supporting the efforts of his big distributor. At the coffee break, we struck up a conversation.
“Three years ago, I was the regional vice-president of sales for my company,” he told me. “At the time, I had 56 people in my organization – nine sales managers and the balance outside salespeople. Today, I’m still the regional VP. My sales are up and my gross margins are up. But, I have only 11 outside salespeople reporting to me.”
“There has to be a story there,” I replied.
“Yes,” he said. “We worked very closely with this distributor to turn over much more of the sales function to them. Since the distributor is doing more of the sales job, I didn’t need a duplicate sales force. We’ve increased our sales for both organizations, and taken sales cost out of the channel. It’s a win/win for everyone.”
What a great example of one of the benefits of thinking differently and transforming your sales systems – for both manufacturers as well as distributors. It’s clear that both the manufacturer as well as the distributor involved in this situation had to change the way they thought about their sales forces, and had to transform the way their salespeople went about their jobs.
It’s also clear that an essential component of this win/win situation was both companies’ ability to field a directable sales force.
Definition:
Let’s define the term. The key word here is directable. It means that your sales force can be counted on to quickly, thoroughly, and positively carry out your directions.
Such a sales force is both rare and incredibly valuable to the company. In fact, a directable sales force is one of the greatest strategic advantages your company can have.
Why is it important?
Here are three reasons.
1. It’s a means of distinguishing your company in a competitive marketplace.
There once was a time, not so long ago, that you could distinguish yourself by providing good service, competitive prices, and good quality. Unfortunately, in recent years the bar has been raised, and those are no longer sufficient. They are necessary, but no longer enough to distinguish yourself from anyone. It’s likely that your customer thinks of your competitors as just as capable of providing good service, quality products, and competitive prices as you. I understand that you think you’re better, but, frankly, that doesn’t count. What is important is what your customer thinks. And, the tendency to blur the differences between products and suppliers is a growing trend in the New Normal economy.
Consider for a moment why you want to distinguish yourself in the first place. Isn’t it to build your business? To acquire new customers and to expand the business with your current customers? If you can no longer count on attracting business through the old principles, what can you use to acquire good customers, expand the business with them, and solidify relationships with key channel partners? A directable sales force.
2. A directable sales force can be your primary means of implementing your strategy.
In our competitive environment, an environment that is moving faster than images on an MTV music video, you need to be able to create effective strategic plans and then implement them. As your strategy shifts in response to the changes in your environment, you need to harness and focus the energy of your entire organization on constantly changing strategic goals and initiatives. Today it’s “grow market share,” tomorrow it’s “increase GP percentage,” next year it’s “penetrate key accounts.” Your ability to survive and prosper in the new environment will depend on your ability to get your company to do what you want them to do – to carry out these new directions. And who are the primary group of people charged with implementing company directives? The sales force.
3. A directable sales force is the primary means of implementing key partners’ strategies.
Carrying out your own strategic initiatives is only one part of this issue. If you’re a distributor, you need to have the ability to carry out your key vendors’ strategy. For example, if one of your key manufacturers decides to focus on increasing a certain product line, or penetrating a certain market segment, you need to be able to respond to that initiative and be a reliable means of implementing those initiatives. In the example I discussed above, it was the distributor’s ability to implement the manufacturer’s strategy that gave rise to the opportunity for both companies.
A rare and precious commodity
Unfortunately, a directable sales force is the exception, not the rule. Particularly among distributors, salespeople often give lip service to directions from above, and then go out and produce only minimum results. You can make all the commitments to key vendors you want, but if your sales force doesn’t do it, you’re not viewed as a reliable partner. Your relationship is in jeopardy. You can engage in strategic planning meetings and retreats monthly, but if your sales force doesn’t carry out the directions bubbling up through those meetings, you’re wasting your time.
Too often, salespeople are stuck in the ruts of outmoded images of their jobs, reinforced by deeply ingrained habits. Many salespeople see themselves as “route salespeople,” making the same sales calls over and over again for years. Ask them to view their jobs differently and you’re liable to be frustrated with the lack of results. The habit is just too deeply ingrained to change overnight.
Of course, you are often part of the problem. It’s likely that you’ve relied on hands-off, laisse faire sales management. “Go forth and sell a lot!” may have been the extent of your direction to them. Coupled with a compensation program heavily weighted to sales or gross margin incentives, that sales management approach is a vestige of days gone by. Ask your sales force to do something differently, and they’ll go out and do what your pay plan rewards them for doing, regardless of your request. In that case, the problem is your system. You ask them to do one thing, but pay them to do something else.
If you’re going to rise above the pack and survive and prosper in this economy, you need to overcome these issues and field a directable sales force.
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On Fielding a Directable Sales Force Questionnaire
Do you have a directable sales force? Take this short five-question self-test to help find out. Select an answer to each question, and then refer to the results section to interpret your score.
1. To what extent do you provide measurable goals and expectations for your sales force?
a. we do an annual sales and/or gross margin goal.
b. we provide annual measurable goals for a number of specific performances.
c. we sometimes have temporary contests.
d. we did that once.
e. never.
2. How often do you measure each salesperson’s performance on those goals?
a. since we don’t have any goals, we don’t measure anything.
b. monthly.
c. quarterly.
d. weekly.
e. annually.
3. How often have you heard your channel partners (distributors – if you’re a manufacturer, manufacturers – if you’re a distributor) praising the effectiveness of your sales force?
a. you must be kidding.
b. it happens all of the time.
c. I remember once…
d. never.
e. it happens occasionally.
4. To what extent is your sales force’s pay dependent on performance on measurable issues above and beyond just growth in sales or gross profits?
a. say what?
b. since we don’t have any goals, and don’t measure anything, we can’t possibly pay them for doing anything.
c. less than 20% of their annual W-2 is dependent on their performance on issues above and beyond sales and gross margin.
d. between 20 – 50% of their annual W-2.
e. more than 50%.
5. If an opportunity was presented to you that required every one of your salespeople to make a persuasive presentation of a new product in every one of their good accounts within the next three months, what is the likelihood that they’ll all actually do it? Be honest.
a. we’d get greater than 80% compliance.
b. 100%.
c. 50 – 80%.
d. less than 50%.
e. you must be kidding.
b = 10 b = 8 b = 10 b = 0 b = 10
c = 6 c = 6 c = 4 c = 8 c = 6
d = 0 d = 10 d = 0 d = 10 d = 4
e = 0 e = 4 e = 6 e = 10 e = 0
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Free download: Portrait of a Professional Sales Manager.
Good to read
Great strategic information.
I am planning to test my theory on Presentations to Key accounts by challenging my team with just that! I have a great objective for the next 3 months!