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Chartered Sales Force Analyst Advanced Reading Compendium 2014

This subject guide is offered as part of the material forthe Level 2 curriculum of CSFA. For more informationabout the program please visit our websitewww.mercadeoedu.org

Contents

Foreword from academia 5Foreword from industry 6Introduction 7

Aims and Objectives of the course 8Learning Outcomes 9Structure of the guide 10How to use this subject guide 11Essential reading 11Online study resources 12Journals and other resources 13Examination advice 13

Part 1 Strategy 14New age sales model complexity vs impact 15

Building a new sales regime 16Staging the new model 22

B2B Sales new frontier 23Changing Customer and their behaviour 23

The end of the road warrior 25Making the most of data 26

Reaching Out to the New B2B Buyer 26Rule of engagement #1 publish deep and wide 26Rule of engagement #2 efficient self-service 27Rule of engagement #3 measure, model and move 28Rule of engagement #4 lifecycle marketing 29Rule of engagement #5 consultative selling 30Rule of engagement #6 trust 31

Sales Force Management 32Developing a sales strategy 33

Segment customers and prospects 34Articulating Sources of Value 34Crafting a Sales Process 35

Strategic Sales Force Management 36Sales force dimensioning 40Sales territories are aligned based on sales effort and sales targets 44

Adapting a sales strategy to challenges 48How to Know When a Sales Strategy Upgrade Is Needed 48Implementing a Sales Strategy Upgrade 51A process for identifying needed sales strategy changes 52

Is your sales force ready to transition? 53Trials and tribulations of transformation 53Foundations of a Successful sales force 54

Part 2 - Structure 56Sales Coverage Model 57

Re-thinking sales coverage models in adverse times 60Go-To-Market Models 60Account Coverage 61Use of Overlays 62Product and Customer Mix 63Operational Support 64

Territory Planning for maximising (what else!) sales 65Well-Designed Sales Territories Enhance Customer Coverage 66Well-designed sales territories improve morale and enhance the power of reward systems 67Well-designed sales territories keep travel time and costs under control 68The key steps in constructing a territory sales plan 68Insights for Overcoming Implementation Challenges 71Manage Disruption of Account-Salesperson Relationships 72

Resource Allocation 74Assess how salespeople currently spend their time 77Seek to change sales effort allocation by adjusting the sales effectiveness drivers 78

Structuring a salesforce 78How specialized should a sales force be? 79What is the bandwidth of the sales force? 80

Insights for better sales force structures 86Match the sales force structure to the companys business life cycle 86Focus on Implementation 87Strategies for implementing successful change in sales force structure 87

Part 3 Process 89Demand Chain Optimization 90

The primary principles of DCO 92DCO is also rife with pitfalls. 94

How leaders get the most out of their sales force 99Customer sweet spot: Zero in on your highest-value customers 100Coverage and capacity: Match the right customers and channels 100Compensation and incentives: Align individual success with growth 101Revenue acceleration 101Metrics and tracking 102Tools and support 102

Sales Execution Support 104Position your solution advantageously 105Set and communicate high targets 105Manage the two-way flow of information intentionally 106

Assess and exert power effectively during the sales process 106Uncover and satisfy underlying customer needs 107Exchange value strategically throughout the sales process 107

Part 4 Systems 110Integration with IT systems 111

Giving salespeople insights 112Improved planning 113Value-added sales processes 114

Providing Insight to Sales Managers 116Use an evolving design with rapid prototyping and implementation 117Make sure that the system adds value to the people who use it 117Caselet: Leveraging information for estimating account potential 118

Perfecting Sales Execution 121Getting it right 121The need for a cultural shift 123Keeping the salesforce focused on what matters 123Enter a store thats perfect 124Typical execution journey 125

How to conduct a diagnostic 127Framework and sample diagnosis 127Do salespeople have appropriate expectations? 129Do salespeople have the information they need to do their jobs? 130Do salespeople have the skills and knowledge needed to be successful? 130Are salespeople motivated to do what the company wants? 131Do we have the right salespeople in the job? 132Do salespeople have the time and the bandwidth to do what the company asks? 133

Sample Caselets 135Thank You 140Contact us 141

Foreword from academia Customers are becoming more sophisticated. The Internet has made so much information available, such that when a company is buying a product or solution, they expect that you're going to give them something more than the basics. They expect that you're going to have industry context and understand their business processes.

And so companies that use to, for example, sell medical devices now not only have to sell the medical device but also have to talk about improving outcomes for patients. Utilities companies that used to sell oil, gas and electric now have to talk about managing energy footprint and what the return is going to be of bringing those commodities and additional solutions to a customer. So the hurdle is much higher than what it used to be before.

To have a successful model, companies have to start by identifying their target customers' sweet spots and the specific offerings they want to bring to those customers. You have to then have to get the right people and the right channelno more, no lessin front of the customer at the right time. If your sellerswhether its your direct salesforce or your indirect salesforcedoesn't know precisely what to bring to whomand what not to bring to whomthen you wont begin to get to your organizations full potential.

When you're thinking about any kind of sales transformationone that isn't going to move the needle 5% productivity, really thinking about 10%, 15%, 20% productivity for performance improvementit's going to take some time. As you think about upscaling some of the roles in your organization, as you think about tuning compensation, you have to do those things aggressively but responsibly, because, after all, the sales organization is driving your top line. So you want to be quite thoughtful and deliberate about where you force change and discomfort and where you ensure that you do that at a pace that allows your organization to flourish and grow along the way

Foreword from industry For a couple of decades now, scale economies have worked like clockwork in the world of sales. Firms like GSK, nestle, ITC and others have grown at a rate of 20% y-o-y in their revenues and the stock markets have taken this as a given rate of growth. God forbid, how can these firms sustain this growth rate? More importantly, how do firms sustain their profitability? A basic analysis of the P&L statements of publicly traded firms seems to indicate that their SG&A expenses are growing as a proportion of revenues. The sales models for many large companies have become more complex and less efficient, putting pressure on profit margin.

In our experience, a few key factors account for this trend, starting with how the shape of demand has changed in many industries

Customer needs have grown more sophisticated. Buyers increasingly demand a tailored solution anchored in expertise about their industry or a specific function

Customers expect providers to help solve their business problems and measure value based on outcomes, not necessarily the lowest price. Medical device firms that previously sold stents and defibrillators now are being asked by customers to improve patients health outcomes. Sellers of oil and gas are being asked to reduce customers energy footprint

Customers have become more experienced with competitive, disciplined bid processes. Buyers can readily gather basic information about products online. Then, in the vendor selection stage, total cost of ownership and return on investment trump relationships. Purchase decisions that were previously controlled by one manager now involve a web of stakeholder. As a result of these shifts, the day of the pure generalist relationship manager is over

Customers are less loyal because theyre wary of being locked into a vendors products. Customer loyalty has become increasingly important to a suppliers long-term health. Sales performance thus depends on the ability to retain high-value customers, to up-sell at the point of sale and to expand the customer relationship through cross-selling

In turn, these shifts in demand have caused companies to dramatically change what they sell. First, offerings have shifted from single-product to multi-product portfolios, with the products ranging from cutting-edge to mature. Second, product-based sales have been supplemented or replaced by sales of solutions that knit together disparate products or services into an integrated offering. Finally, transactional selling based on knowledge of product features, functionality and cost has become less relevant than consultative selling thats tailored to the customers industry or business situation and must meet a customers threshold for return on investment.

New age sales model complexity vs impact For decades, scale economies ran like clockwork in the world of sales. Companies in business-to-

business (B2B) markets consistently grew their revenues faster than their sales and marketing expenses.

But for nearly 12 years, that trend has stalled and in some cases reversed. The sales models for many

large companies have become more complex and less efficient, putting pressure on profit margins. How

big is the problem? If we analyze the 10 yr income statements of roughly 200 large US-based companies

in healthcare, technology and financial services, we can notice that more than half of these companies had

increasing sales and marketing expenses as a percentage of revenues over the period, or they failed to

demonstrate the scale benefits that one would expect from their growing size

The shape of demand has changed in many industries. Customers expect providers to help solve their business problems and measure value based on outcomes, not necessarily the lowest price. Medical device firms that previously sold stents and defibrillators now are being asked by customers to improve patients health outcomes. Sellers of oil and gas are being asked to reduce customers energy footprint.

Customers have become more experienced with competitive, disciplined bid processes. Buyers can readily gather basic information about products online. Then, in the vendor selection stage, total cost of ownership and return on investment trump relationships. Purchase decisions that were previously controlled by one manager now involve a web of stakeholders. As a result of these shifts, the day of the pure generalist relationship manager is over.

Customers are less loyal because theyre wary of being locked into a vendors products. Customer loyalty has become increasingly important to a suppliers long- term health. Sales performance thus depends on the ability to retain high-value customers, to up-sell at the point of sale and to expand the customer relationship through cross-selling

In turn, these shifts in demand have caused companies to dramatically change what they sell. First, offerings have shifted from single-product to multi-product port- folios, with the products ranging from cutting-edge to mature. Second, product-based sales have been supplemented or replaced by sales of solutions that knit together disparate products or services into an integrated offering. Finally, transactional selling based on knowledge of product features, functionality and cost has become less relevant than consultative selling thats tailored to the customers industry or business situation and must meet a customers threshold for return on investment. Simply put, most current sales models are not keeping pace with the shifts in demand, as many companies struggle with factors that contribute to higher costs.

Account managers may realize too late that they need additional expertise, and then frantically call specialists to join a sales effort at the last minute. In other cases, companies deploy specialists before thorough qualification of a prospect, or to help with contract negotiations. Each situation results in overused, misapplied sales resources or missed business opportunities. Companies also are finding they have loaded up on variants of solutions, sales teams and sales coveragea creeping complexity that raises costs and ironically can stifle the growth that an expanded offering set is intended to provide.

B2B Sales new frontier The way businesses buy from and sell to each other is changing. While some trends were emerging

before the recession, the downturn has accelerated their adoption to create a very different business-to-

business (B2B) sales environment. To find out how the B2B sales world has changed, we went directly to

interviewing senior sales executives who are collectively responsible for more than $150 billion in sales, as

well as buyers, at leading global companies across a range of industries. They identified three primary

trends rapidly dominating the B2B landscape as both customers and vendors seek to maximize returns

and minimize costs. First, customers have become more demanding, insisting on both off-the-shelf

products and more complex, customized solutionswith different levels of sales support. Companies

accustomed to selling products and walking away are being forced to prove how they add real value.

Second, companies servicing larger managed accounts are exploring lower-cost ways to make clients

happier and to generate sales growth. Finally, organizations large and small are following the lead of

business-to-consumer (B2C) retailers such as Amazon by making smarter use of customer data to predict

behavior, drive sales, and deepen relationships.

Customer needs are becoming more diverse and often change from day to day, putting tremendous strain on the resources and capabilities of sales organizations. Most of them rely on low-cost sales channels, such as online and telesales, for smaller customers and on high-cost channels, such as face-to-face sales, for key accounts. Yet customers increasingly want simple, fast, and inexpensive transactions, on the one hand, and highly complex solutions designed by experienced (and often global) teams, on the other. The result is that B2B companies are simultaneously overinvesting or under delivering for customers as these changing needs outpace their capabilities

ChangingCustomerandtheirbehaviour

Todays business buyers are awash in a deluge of online information. Virtually every business problem, process, product, and service, no matter how obscure, seems to have garnered at least one blog post or forum comment. One could debate the quality of this information, but not the quantity. Most business searches turn up thousands if not millions of results that include product descriptions, news articles, videos, podcasts, images, books, white papers, free trials, presentations, Wikipedia entries, rankings, blog posts, comments, tweets, and so forth. Whatever your question, chances are someone online already has some answer.

The instant gratification of the internet is so engrossing that it overshadows the long term changes it has fostered in the people that use it. People have not sat idly by as the Internet has evolved; their online knowledge, skills, attitudes and behaviors have evolved alongside it. As one of the most serious of Internet users, the B2B buyer has been transformed through adaptation to the new online environment. A new breed of B2B buyer has arisen, a species that is more connected, more impatient, more elusive, more impulsive, and more informed than its pre-millennium ancestors

The Internet has changed the B2B buying process so radically that its difficult to recollect exactly how the pre-Internet B2B buyer used to go about the business of making a purchase: paper, phone and people mostly. The process went something like this: ask the analysts about the next big thing, collect

Sales Coverage Model A well-thought-out coverage strategy is often overlooked as a competitive advantage. But forward-thinking CSOs know that it is the foundation for effectively supporting their customers, adding value, and improving the companys bottom line. A successful strategy for how your selling organization covers your customers is solid and resilient, able to withstand changes in customer preferences, product lines, and economic conditions. Do we know which accounts we need to focus on?, Are we deploying our resources in the most efficient way?, Are our non-sales resources aligned effectively to support the sales effort? - These are some of the common questions we receive from members on the topic of sales coverage. And while there isnt a best-in-class organizational structure (your organizations size and structure depends on your sales strategy), there are best practices to ensure that whatever organizational structure you currently have is set up optimally

Staying ahead of the competition is the goal of any successful sales organization, and to reach it is to make sure your company is better than the competitor in areas important to the client. Many businesses have reached parity on features, production costs, and other areas of cost efficiencies; this also brings less differentiation. What is often overlooked as a competitive advantage is the sales coverage model. Are you covering your market as effectively and efficiently as possible? If not, your coverage model may be designed to meet internal needs, not the customers. For instance, in todays environment, using a single sales channel is risky. No one channel can give you total flexibility, which begs the question: How does our customer want to do business? Having a sales coverage model in place that meets clients needs can be your differentiating factor. Here are four ways to determine if you are on the right track:

Analyze Your Customers Buying Preferences - A company we worked with surveyed customers to find out how they like to be contacted. To its surprise, the number-one preference for sales-rep contact was by phone, not a face-to-face meeting, and this phone preference existed within all its market segments. Do your customers feel phone calls are the fastest and most convenient way to handle business needs, or do they prefer the Web or face-to-face contact?

Benchmark Others - Benchmarking helps you determine who sets the standard in an area of your business and what that standard is. It helps you to better understand what customers are experiencing in the marketplace. After the preference analysis in step one, we conducted a benchmarking exercise where we discovered we were not maximizing the use of telesales the way other companies were. Ask yourself the following questions when doing a comparison: Do you need your field sales force to focus on strategic, complex solutions, but find that they spend too much time on less complex products with lower margins? Is there a benefit to having a less costly channel that could generate good leads for the field and sell the less complex, higher frequency orders via phone and Web? Are you contacting customers in the most effective way that meets their needsand meets your sales objectives?

Develop A Contact Strategy - How frequently should your customers be touched? On average, for global and national accounts, we found it to be weekly; for midlevel accounts, monthly; and for small-business customers, every four to six months. Its important, however, to remain flexible, as companies will have a different standard based upon their service or product offering. Frequency is also dependent upon the product life expectancy, how frequently accessories or supplies may be needed, or new client offerings, among other things. By reviewing buying habits, you gain a

time on crediting and claiming activities. The incentive for account managers to maximize the compensation by devoting their resources to crediting and claiming in this environment may be even greater. Therefore, it is critical that the crediting and claiming process is as automated, accurate, and transparent as possible. Factors that support a more effective process include end-to-end sales cycle visibility from opportunity to commission payout, clear named account and territory definitions, clear crediting rules and sales split information, and high quality transaction and customer data. While it may not be feasible for a company to overhaul its sales crediting processes in this environment, any improvement can have a positive impact on sales costs and performance

End-to-End Sales Cycle Visibility In addition to playing a key role in sales crediting, sales cycle visibility also is critical in the allocation of sales resources. Sales managers utilize sales forecasts to make decisions on how to allocate their sales resources. Forecasts in turn, are largely based on opportunity data. In addition, sales managers rely on accurate linkages between opportunities and booking data to measure the performance of their team. Therefore, it is imperative that the sales organization implements processes and controls to ensure that accurate opportunity data is entered into the CRM system and accurate data linkages exist between opportunities and sales orders

As with all organizational change, territory changes can create confusion for customers. Following a proven change management process and implementing an effective communication and transition strategy will allow customers to understand the rationale and also embrace the changes. Balanced territories usually translate to better service from sales representatives, and therefore, happier customers. By providing better service, a sales organization can expect to increase business with current customers and more easily win new customers

TerritoryPlanningformaximising(whatelse!)sales

Sales leaders assign responsibility for customers and prospects, along with the associated selling activities, to salespeople and teams when they design sales territories. When these territories are well designed, the workload and opportunity in every territory are well matched to the capacity of the salesperson or team assigned to cover that territory. But sales leaders can overlook the power of sales territory design as a sales effectiveness tool, and they often misdiagnose symptoms of poor territory design, focusing instead on other sales effectiveness concerns. Some typical cases of concern in territory planning

Targeting Problem? Why cant our sales force learn to target more effectively? wonders a marketing manager. The salespeople in Dallas have visited only 10 percent of the good leads that we passed on. No wonder our market share in Dallas is so low! And in Atlanta, salespeople are spending too much time with low potential prospects that arent even on the target list.

Hiring and Retention Problem? The Detroit territory is vacant again, says a frustrated Midwest regional director. This is the fifth vacancy in just two years. In their exit interviews, the people who left implied that they were not given enough opportunity to succeed.

Compensation Problem? I cant make any money with this incentive compensation program, complains an office products salesperson that has just completed his first year on the job. Im working twice as hard as veteran salespeople who are milking their well-established books of business, yet I earned just a small fraction of what they made this year.

Award Trip Criteria Problem? This is the same group of salespeople who went on the award trip last year, observes a vice president of sales. I wonder why several of the salespeople who I thought worked really hard this year didnt make the cut.

Rank-Ordering Problem? Why do they insist on publishing these district market share rankings? complains a pharmaceutical district sales manager in Denver. My district has so much potential spread out across a huge geography, and I dont have enough salespeople to possibly cover it all. The rankings are unfair.

Quota-Setting Problem? I had a good year, and now Im rewarded with a huge quota for next year, complains a medical supply sales rep. Ill never achieve that quota. Why cant my manager understand that the potential in my territory has been maxed out?

A smart sales leader can at least partially remedy all of these situations through better territory design. In Example 1, targeting may improve if salespeople are redeployed from Atlanta (where low potential prospects are being over covered) to Dallas (where good leads are being neglected because the salespeople are too busy to follow up). In Example 2, the Detroit salesperson may stay on the job if her territory is enlarged so that she has more opportunity to generate sales. In the other examples, better territory design can lead to fairer recognition and rewards for the salespeople. If sales leaders have not evaluated the territory design and adapted it to current business needs within the last year or two, it is likely that sales territory misalignments are keeping the sales force from achieving its maximum effectiveness. Poor territory design makes it impossible for the sales force to give all valuable customers the attention they deserve and, at the same time, underutilizes many talented salespeople. Poor territory design also makes it extremely difficult to identify and reward the true top performers and thus affects sales force morale and motivation. Poor territory design can also result in high travel costs.

WellDesignedSalesTerritoriesEnhanceCustomerCoverage

Well-designed territories lead to increased sales because they allow salespeople to improve their customer and prospect coverage. A salesperson in a territory with too much work or travel cannot possibly cover all the customers and prospects assigned to him. He probably spends his time travelling to and calling on accounts hes comfortable with, ignoring other, more challenging, but potentially more profitable, accounts. As a result, the company misses out on important sales opportunities. Likewise, a salesperson in a territory with too little work will spend a disproportionate amount of time on non-productive activities, such as calls on low-potential customers, despite the fact that the sales generated from those customers are likely to be much less than the potential sales from the accounts that are not covered in high-workload territories. When sales leaders redesign territories, they can assign under covered profitable accounts from high-workload territories to salespeople who have time to call on them; this increases sales force effectiveness, which leads directly to higher sales and profitswithout increasing sales force headcount. Figure below charts the results of a sales territory design assessment that shows the extent to which customer coverage needs and sales force capacity can be mismatched. The cosmetics company sales force in the example performs merchandising duties at retail storesstocking shelves, setting up displays, and taking inventory. The companys intention was to design each territorys store workload to approximately match the capacity of a full-time salesperson

Demand Chain Optimization Managing the demand chain, from manufacturers through wholesalers, distributors and retailers, and onto

consumers, is a daunting task. The numbers of Stock-Keeping Units, outlets, supply sources, seasons and

product characteristics are huge, and the degree of complexity in the supply chain is challenging. Creating

efficiency in the demand chain requires a combination of art and science. We need sound, scientifically

based replenishment methodologies, which incorporate statistical and operations research techniques, to

analyze the richness of contemporary databases and to deduce patterns, trends, variabilities and the

dynamics of customer demands. Such scientific techniques enable us to balance the various costs -

inventory, transportation, handling, warehousing and other direct and indirect labourwhile

simultaneously providing optimal services for customers. This balancing act requires timely and accurate

data coupled with the appropriate analytical techniques. At the same time, we must consider the delicate

industrial practices associated with specific cultures and organizational behaviors, the constraints created

by environmental factors, the impact of external factors and the influence of specific individuals in different

industry sectors

Supply Chain Management has been widely practiced and has delivered significant efficiencies in the market. Demand Chain Management will take this further by providing strategies to maximize revenue and hence margins. The problem lies in lacking the right product, at the right place, at the right time to service customers.

While demand chain as a concept has been used primarily from the marketing viewpoint, its major repercussions (as with all marketing viewpoints!), has been felt in sales. A demand chain is a network of trading partners that extends from manufacturers to end consumers. The partners exchange information, and finished goods flow through the networks physical infrastructure. The physical facilities include manufacturers warehouses, wholesalers distribution centres, retail chains warehouses and retail outlets. A demand chain can include multiple business enterprises. As product flows through the network, the partners incur costsbut they also enjoy revenue, as product changes ownership between business enterprises. The relevant qns at each stage of the demand chain would be

Figure 23 : Relevant qns at each stage of demand chain

The effects of Demand Chain Optimization are broad, influencing the overall financial health of the enterprise; however, the business decisions that drive DCO are ultimately made at the Stock- Keeping Unit (SKU) level. A SKU is a specific product at a specific location. SKU management requires many decisions, such as: When should you replenish the SKU? What quantity should you order? What customer service objective is appropriate for this SKU? Who do you order from? Could you better utilize the inventory for this SKU at another location? Should you even stock this SKU? What will happen to demand if you change the SKUs price? And there are many more questions. Finding the right answers is not trivial. This complexity is due to the many sources of uncertainty and the large number of decision alternatives. These many alternatives partly stem from the variety of approaches that you may want to consider. SKU demands are highly stochastic, and may vary because of seasonal, day-of-week and other special-event effects. Product availability and supplier lead times may also play a role.

Figure 24 : Stages of DCO and the relevant frameworks

Perfecting Sales Execution Most companies treat sales like an art, but they are discovering that the sales process needs to become

more of a science. Along the bustling streets of Delhis Connaught Place as well along the Bandra

bandstand, the neighborhoods are similar, a vibrant mix of old and new, with similar customer

demographics. So why does a pan India coffee house sell significantly more of a certain snack - a high

margin item - in one market than the other (compared in the same city)? The store with stronger sales is

an example of what is called Perfect Sales Execution. The Perfect Sales Execution model is rooted in the

belief that consumer products makers can use a scientific methodology to increase market share and

profits by targeting the right stores and the right products and taking a disciplined approach to supporting

sales execution. The approach is unique to each firm. Perfect Sales Execution provides the flexibility for

companies to maintain centralized control and empower local operations. Creating the best of both worlds,

companies use a simple globally standardized metric for measuring sales performance and growing sales

in targeted regions and outlets while giving country managers the power to locally define such important

factors as product assortment and positioning

Such concerns are top of mind for many consumer products CEOs. When we recently surveyed 120 consumer products executives, 90 percent ranked sales execution as one of their top five business priorities, but fewer than half of the respondents felt their salesforces were operating at full potential. More than half of all respondents ranked investments in salesforce capabilities and channel strategy as one of their most important issues for addressing salesforce effectiveness. Our work with clients has shown that many companies lack a clearly defined way to increase sales, and they are unable to mobilize their salesforces to meet growth objectives. That creates high variability in sales rep performance within a market and across country markets in a region. Through its Perfect Sales Execution program, one Asia-based fast-moving consumer goods (FMCG) company was able to identify where certain markets had capabilities ahead of others, and draw on the experiences of Vietnam and Singapore, for example, to raise the competency level in other markets like China and Indonesia.

While important in developed markets, creating such a perfect store is even more urgent in emerging markets, where consumer products makers are looking for much of their growth. In emerging markets, where traditional trade still dominates, achieving Perfect Sales Execution is more difficult since mom and pop shops are not homogenous and typically dont use a standardized format for tracking sales and enhancing performance. That said, companies that are able to create a solution in emerging markets reap significant benefits in terms of growth, market share gains and securing and maintaining leadership positions. But consumer products companies selling to developed markets are also finding huge value in using the Perfect Sales Execution approach to help them focus on segments that matter and make the most of shopper insights

Gettingitright

Consumer goods makers often simply lack the capabilities for determining which outlets are most valuable in a region, which products to target within those stores, how to position targeted products on the shelves, how to motivate sales teams to sell more of those items and how to measure execution with a few simple

How to conduct a diagnostic How do you measure the effectiveness of a sales force? Most companies agree that revenue and margins

are key indicators of health. At the individual level we can examine gap-to-goal. But those metrics are

lagging indicators. They also dont tell us much about the quality or effectiveness of those results. How do

we really know were getting the most out of our sales organization? Its a complex question, with many

variables. Further, the answer will change over time and will vary from company to company. However,

there are ways to compartmentalize it and break it down. At the highest level, think through coverage and

segmentation models. Do we have time to serve all our customers equally? Do we want to serve all

customers equally? One facet of this is to first assess if were spending the right time with the right

accounts. When it comes to individual sales reps and how they spend their time, companies often

compare time spend to sales performance (called a time/productivity analysis) to identify and differentiate

between high value activities and low value activities. You can eliminate/offload/automate the low value

activities, and redirect reps toward the high value activities. Lastly, you can examine the deals that reps

pursue and how they pursue them. This has implications on opportunity qualification, stakeholder

identification, engagement strategies, and the sales process

Frameworkandsamplediagnosis

You can discover solutions to any sales effort allocation challenge through a diagnostic process guided by the simple framework below. Consider one very common allocation challenge - Salespeople are not devoting enough time to developing new business.

Figure 30 : Salesforce diagnostic framework

Start by identifying its underlying causes, which typically originate in one or more of five impact categories:

Roles and responsibilities. Salespeople do not have the time or the bandwidth to develop new business.